Practical Applications of the Internet of Things (IoT)

In 2012, companies across the world spent approximately $20 billion on technologies linked to the IoT. By 2020, this spending is expected to exceed $500 billion, and it's believed that the IoT could contribute to as much as $14 trillion to the world economy.

As always with technical innovation, particularly at enterprise level, it's the manufacturing sector and its sub-verticals that are leading the practical application of the Internet of Things (IoT). Doug Oberhelman, CEO of Caterpillar declared “we have slightly over 3 million machines running somewhere in the world – what we don’t have is all those machines hooked into a system that can predict failure.” With the IoT they can (Tata Consultancy Service).

The potential for the Internet of Things is that connected machines will help to improve efficiency, productivity and customer service. Helping businesses predict failure long before it happens.

There are other applications purported to be IoT solutions. Hive remotely controls home central heating systems through the web, Life360 allows you to track the whereabouts of your family via a mobile app plus there is the well-publicised Amazon Dash Button. All are excellent, but only scratch the potential of what the IoT will become.

With the almost limitless power of cloud processing coupled with the incredible amount of data collected from 50 billion sensors (Cisco claim by 2020) the IoT creates the possibility that soon we will be able to have sufficient sensors worldwide to analyse and identify seemingly unrelated actions, which have a negative impact on either revenue or the end user experience, and put them right.

I can imagine a new role in every business - the IoT Analyst - tasked with examining data, searching for the business ‘butterfly effect’.

IoT in Distribution and Logistics

Excellent examples of how we can utilise IoT technology are documented in the IoT in Logistics report 2015 by DHL and Cisco.

DHL are confident that “for any organisation with a supply chain or logistics operation, IoT will be have game-changing consequences, from creating more “last mile” delivery options for customers, to more efficient warehousing operations and freight transportation”.

DHL suggest in their Logistics Report a view that “managing threats such as port strikes, airport closures, and highway closures may not seem like an obvious IoT application at first glance, but analytical capabilities are becoming sophisticated enough not only to predict them but to respond. End-to-end supply chain risk management is yet another area in which IoT is becoming increasingly useful. Rising volatility and uncertainty in global supply chains is causing traditional supply chain management models to break down. Natural disasters, socio-political unrest, conflict, economic uncertainty, and market volatility all threaten disruption, often without warning”.

Consider sensors spraying data into the internet that identifies that a truck carrying urgent medical supplies is about to break down or warehouse storing this Christmas’s “must have” toy  has been flooded from a storm – the IoT will allow us to make better business decisions in almost real time.

Undoubtedly, the logistics industry is well placed to make the most out of the IoT, where tracking assets, from containers, to pallets, to individual packages is a necessity to drive efficiencies in the supply chain and provide delivery information to consumers. The next-step change will be to connect IoT data in real-time to improve delivery services. I expect Amazon, always a market leader, to be first with new applications – I can imagine a Find Me Today App – whereby the package “finds” the consumer as they move through a predictable daily routine observed by the IoT over a period of time - at home until 8 am - train and then tube till 9 – office until 5.50 - the gym on a Wednesday and so forth. The parcel will track the recipient down as the predicted activities are clocked into the IoT – home alarm set – car moving – Oyster card used - now a text informs the recipient to pick the parcel from the Doddle locker at the tube station!

Sounds like big brother is watching you? But it would be a great service.

IoT in Distribution should not be limited to sensors on physical assets. The relentless nature of delivery and despatch, 24 hours a day, 7 days a week can place undue stress on warehouse staff (particularly the supermarket chains during the Christmas peak). A method of better managing that workforce, avoiding predictable accidents (hse.gov reports that 3 out of 10 employees in transport and warehousing reported an injury in 2013/2014), and creating efficiencies in the process can be a massive benefit. Time saving initiatives and the avoidance of straining the work force to breaking point can come from IoT solutions. 

We can utilise wearable tech (Fitbit watches) to allow the collection of “health” and movement data. Match that information with transactional information, such as delivery times for vehicles, pallet movements, pick and pack rates and with intelligent resource planning we can ensure we have an efficiently used, healthy work force.

IoT in Retail

In retail, hyper-relevance is a new buzz word. It’s the ability to offer context based promotional offers to a consumer depending on many, sometimes unlinked, actionable pieces of data. Some are common sense and obvious, such as recognising a repeat visitor to a store (using the retailers mobile app communicating with the in-store beacons) and therefore transmitting discounts to the phone to increase the consumers basket size. Others are less obvious – the IoT can connect the promotion to the weather, the distance travelled by the consumer (integrating the connected vehicle in to decision making), the time and day of the week, even school holidays and therefore the likelihood that the consumer is not alone.

Indeed I anticipate that omnichannel retailers will take much from their online experience, in that everything that happens on a website is measureable and actionable. This has created sub industries within eCommerce including personalisation software, behavioural merchandising and cart abandonment processes. We can extend these ideas to bricks and mortar.

If we can observe, measure and react in real-time to what is happening in-store we can mirror the revenue increasing tactics of the website.

Queue times will be measured by sensors at the checkout – those customers unwilling to wait (identified by mobile and beacons communicating) will be enticed back in to the shop with an immediate apology text message and perhaps a discount.

At the checkout a personalised and less intrusive advert may be introduced – the “store” may have observed much time and deliberation at the games console aisle – indeed a sensor may have logged that the latest Xbox One Grand Theft Auto game was picked up and returned to the shelf – perhaps a well worded marketing “nudge” at the checkout will get the customer to return to the aisle for the game.

Indeed Scott Bradley of Vmob has excellent examples of the use of IoT in McDonald restaurants in Europe “When customers open the McDonald’s app, they get individualized content based on their location, the time of day, the weather, and their own habits of purchasing and responding to promotions. Early on a cold, grey morning, the offer might be for coffee or for one of the customer’s favourite breakfast items. If the customer is moving quickly (connected car), the offer may point to drive-through locations. As a result, McDonald’s in Sweden has seen a 700 percent increase in offer redemptions, and customers using the app are returning to stores twice as often and spending 47 percent more.”

 

IoT - the Fourth Industrial Revolution

Jeremy Green, principal analyst at machine to machine communications analysis company Machina Research, describes the scale of IoT’s future impact: “this is the fourth industrial revolution, with the first being steam, the second being electricity, the third being about information, and this the fourth: connected things.”

I look forward to Britain recapturing a leadership role as an “industrial” power using IoT innovation as a catalyst for growth in our tech. sector. I believe that IoT will impact us all in our home life and at work. I strongly advocate that whatever your interest retail, logistics or distribution that you place IoT at the forefront of your development plans – I know I am.

 

 

You may also be interested in:

If we build it they will come – Cloud and the Internet of Things

 

 

Sources:

- Raconteur, The Internet of Things, #323, 28/06/2015

- Fortune, The Race to the Internet of Things

- DHL & Cisco, Internet of Things in Logistics Report

- Health and Safety Executive (HSE)