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IoT enabled Supply Chain promises digitally enabled business
- By Rheinhardt Schulze, Oracle Supply Chain Management Solutions Market leader
The Internet of Things (IoT) is no longer just a concept bandied around by technologists, but an increasingly important tool that business in South Africa and the region can adopt in order to gain transparency, improve operational efficiency, cut down on cost, and achieve a competitive advantage.
The common thread in most conversations with CEOs and senior executives is that the acceleration of innovation and the velocity of disruption almost constitute a source of constant surprise and technologies underpin this change.
According to Gartner, with the technology evolution surrounding the IoT, it will become increasingly possible to add IoT features to a product at minimal cost. By 2020, IoT technology will be in 95% of electronics for new product designs.
IoT is currently at the top of the hype cycle, and has firmly established itself as one of the key elements in transforming several areas of business, with supply chain management being a prime example. This is made possible through the interconnected digital thread that improves automation with advanced machine learning and artificial intelligence that make the supply chain more intelligent and responsive.
With new augmented reality, machine vision, digital twin and data science capabilities, Oracle IoT Cloud enables organisations to gain rich insight into the performance of assets, machines, workers, and vehicles so they can optimise their supply chain, manufacturing, and logistics, reduce time to market for new products; and enable new business models.
The advanced monitoring and analytics capabilities of the offering enables organisations to improve efficiency, reduce costs, and identify new sources of revenue through advanced tracking of assets, workers, and vehicles; real-time issue detection; and predictive analytics.
Oracle IoT Cloud lets a supply chain manager view the status of a piece of equipment on a factory floor hundreds or thousands of kilometres away through a digital twin - a virtual representation of the equipment through which the manager can simulate conditions, run what-if scenarios, and pinpoint problems. Supply chain managers can further apply advanced analytics to assess what repairs or updates need to be made to prevent a maintenance issue.
With an estimated 21 billion connected sensors and endpoints by 2020, digital twins will exist for billions of things in the near future, Gartner states that potentially billions of dollars of savings in maintenance repair and operation (MRO) and optimised IoT asset performance are on the table.
One of the biggest challenges for any organisation is having to change, but business decision-makers need to ask themselves what happens if they don’t change. Change is no longer simply about creating a differentiator between one company and the other, it has become vital in order to stay relevant.
While some companies struggle to identify the return from investing in such technology, research shows that 76% of companies using IoT are already using the insights gained to improve their business.
Experience in South Africa and the SADC region shows that an increasing number of companies are open to embracing change by firstly moving to the cloud, in order to benefit from lower total cost of ownership, quicker deployment and access to new innovation. We predict a similar approach toward the adoption of IoT, especially in supply chain focussed companies including in manufacturing, distribution and the retail sectors.
However, the decision to embrace this change cannot be left to the confines of the IT department; it has to be a business decision as to how the organisation can use such emerging technologies to innovate to its advantage. Failing to do so will likely result in the business being left behind by more tech-savvy competitors.