Using The Internet Of Things To Extend Beyond Factory Walls

Part 5 of the “Manufacturing Value from IoT” series

In my last blog, I talked about how a strong collaboration between information technology (IT) and operations technology (OT) departments increases IoT-enabled profitability and productivity. Here, I will talk about how the Internet of Things can help manufacturers engage with their supply bases to prevent wasted productions and late deliveries.

Any manufacturer seeking to improve performance must engage its supply base or risk:

  • Production of goods with flawed components, parts, and materials, leading to customer rejections
  • One-piece flow processes stalled by delayed supplier shipments, resulting in late deliveries to customers
  • Development of inefficient, overpriced products that drive customer defections

The good news is that IoT initiatives can and should extend beyond factory walls to suppliers – with the potential for dramatic boosts in productivity across the entire supply chain.

The bad news is that most suppliers still don’t have access to their customers’ IoT-enabled data. For example, only 13% of manufacturers report that all suppliers who need IoT-enabled data have it. What’s more, 10% report that no suppliers have access to this information, and another 22% have no IoT data for their suppliers to access.

This IoT-supplier disconnect limits manufacturers’ abilities to alert suppliers to demand changes, leading to wasted production and shipments. In fact, many companies can’t connect their own IoT information to their own supply-chain management (SCM) systems, making supplier guidance impossible or, at best, out of date.

Yet sharing IoT-enabled data with suppliers can improve both company and supplier performances via:

  • Better sequencing of supplier deliveries to plant schedules
  • Rapid responses to inventory changes
  • Real-time awareness of production problems with supplier goods
  • Intelligence that drives value-added supplier services

At the same time, failure to connect supply chains to IoT-enabled data is more than just a performance issue. Regulators and customers increasingly demand that manufacturers be accountable for supplier actions. The IoT can minimize these risks by:

  • Monitoring in real time supplier component and material specifications vs. requirements
  • Ensuring quality of supplier goods during development, and enabling track-and-trace functionality in the event of product contamination or recalls
  • Documenting supplier operating environments (e.g., environment, workplace safety) that can harm corporate reputations and brands
  • Tracking inbound goods to ensure safe passage and documenting that sensitive materials and components haven’t been tampered with or adulterated

It’s imperative that manufacturers establish practices and solutions that deliver IoT benefits across the supply chain. How?

  • First, embed devices within your operations to capture data, and then share that intelligence throughout your supply chain.
  • Next, begin a supply-chain rollout by sharing information that benefits vendors, even those unwilling to participate in IoT efforts. For example, provision of real-time inventory levels and forecast changes can help suppliers synchronize deliveries to your production schedule while allowing them to optimize their own inventories.
  • As suppliers learn to leverage your IoT information, share product-quality data, such as scrap and rework tallies, to help suppliers improve the quality of their goods.
  • Finally, allow suppliers to monitor and react to all of your real-time data to improve performances and add value to processes. Ask, too, for access to their real-time data for insights into their operations.

The IoT can rapidly help your supply chain improve, delighting customers, increasing sales, and growing margins. What are you waiting for?

Stay tuned for more on how your company can increase productivity and profitability with IoT, analytics, machine learning, and artificial intelligence. In the meantime, download the report “The IoT is Delivering the Future – Now” to learn more about the complexity of an IoT transformation.


Internet of Things – Digitalist Magazine

Empower People With Health Wearables: Mixing Tech And Health

From Fitbits to smart watches, health-focused wearables are perhaps one of the best IoT innovations to show immediate benefits. These devices provide individuals with instant feedback on everything from the number of steps they walked to the effectiveness of a cardio workout. The industry is growing. No longer is it focused just on consumer applications; it’s reached well beyond into health monitoring.

Adoption of IoT-connected wearables captivates consumers and manufacturers

Engagement platforms like wearables are touching a wide range of consumer lifestyle sectors. They collect data from devices worn by consumers and then provide insight, information, and even rewards to users. More importantly, they provide important data that can do everything from encouraging better fitness to diagnosing health conditions.

The advantages are multi-faceted. The consumer benefits first and foremost with more information about his or her health and a better ability to choose a healthcare plan, make fitness decisions, and even navigate complex medical issues. Medical science benefits, too. It is now possible for doctors to use information from such platforms to make research-based decisions and even diagnose and treat health conditions.

Wearables encourage better fitness

Wearables, which are usually simply designed and worn on the wrist to avoid interfering with daily tasks, are the simplest of this type of engagement platform. These devices transmit information over a receiver or Bluetooth technology to end users, who can use the data to make decisions about health. According to IDC, of the 23 million wearables shipped in the third quarter of 2016, 85% were fitness-focused products.

Consumers love this type of technology for many reasons. For one, it provides motivation; knowing you have 1,000 steps to go to reach your daily goal encourages you to keep walking. For another, knowing you’ve surpassed your target heart rate encourages you to slow down during a workout. However, the information can also provide long-term benefits. Companion apps can track a person’s health and fitness over a period of time, and these devices make it easy to communicate with relevant third parties, such as doctors or insurance providers.

Health insurers benefit from better monitoring, better health

Health insurers understand the value that such engagement platforms offer, and many are willing to provide discounts to members who become more active and engaged using IoT and other connectivity resources.

A provision in the U.S. Affordable Care Act allows employers and health insurers to offer wellness incentives. For example, employees who agree to wear a fitness or activity tracker can receive rewards or discounts on medical costs. Even after spending money on an activity-tracking device, participants can see overall savings when their incentives are factored in.

This makes sense when you consider the benefits. The Centers for Disease Control and Prevention reports that 29 million people in the United States have diabetes, and 86 million have pre-diabetes. According to the American Diabetes Association, the annual U.S. cost of diagnosed diabetes is $ 245 billion a year, much of which is paid for by health insurers. However, many people with this condition can benefit from becoming more active, eating better quality food, and tracking their blood sugar levels more consistently – potentially reducing the onset of the condition and its costs, all of which can be enabled by wearables and other connected tools.

For example, a University of Mississippi study that used a mobile Internet device to help people with diabetes track their blood sugar resulted in fewer hospital visits and better disease control, producing a $ 339,184 savings in ER visits alone among the 85 people enrolled in the study.

Keeping patients healthier

mHealth, the term used to describe the use of mobile devices to transmit health-related information, is already a $ 23 billion industry, and it is expected to grow more than 35% over the next three years, according to SNS Research.

This connectivity enables doctors to remotely track their patients’ well-being and intervene when the data shows emerging problems. For example, wearable devices that transmit data on blood sugar, heart rate, heart rhythm, blood clots, and so forth can enable doctors to better track, diagnose, manage, and treat patients.

Ting Shih, CEO and founder of mHealth company ClickMedix, says smartphones and wearables are perhaps the most important life-saving technologies in the health industry today, in part because they “are affordable enough that almost anybody in the world can have access to one.” He says wearables enable the healthcare industry to “collect data as never before. We can actually get to the next level of healthcare delivery.” This is changing the world.

Learn how to bring new technologies and services together to power digital transformation by downloading The IoT Imperative for Consumer Industries. Explore how to bring Industry 4.0 insights into your business today by reading Industry 4.0: What’s Next?


Internet of Things – Digitalist Magazine

Internet Of Things: Five Ways To Overcome Security Challenges

The promise, benefits, and value of the Internet of Things (IoT) have been documented extensively, but a number of widely publicized IoT attacks leaves the impression that the IoT is deeply insecure. What is often not mentioned is that many of these attacks originated due to failures in implementing basic protections.

But even where the vendor has taken reasonable precautions, things can go horribly wrong, as can be seen in a – literally – fly-by attack on smart lighting.

Another challenge is that IoT-enabled devices are deployed “where the action is” – the factory floor, oil platforms, public roads, offices, stores, moving vehicles, or in cities running over wireless networks.

That means that they are often physically accessible by employees, contractors, and even the general public. If we compare that to modern cloud data centers, where only authorized personnel can enter, there is a substantial difference. More people with access means the risk of compromise goes up, so we may need to ensure devices themselves are physically protected against tampering.

But these are not insurmountable obstacles. The question is less one of not knowing what to do to protect IoT environments, rather how to implement and apply security measures to keep the solution safe.

Five recommendations for securing the IoT

1. Manage risk

Modern security practices follow a risk-based approach that considers both the ease of an attack and the impact should one happen – giving a strong indicator of how much security you’ll need. The reality is that an IoT solution that monitors, manages, and optimizes operations in a chemical factory requires much tighter security protocols than one that simply turns off the light in a conference room when sensors detect nobody is present. In the former, a successful attack could lead to a catastrophic industrial accident including injury and loss of life. In the latter, the worst that could happen is that an electricity bill is a little higher.

2. Limit device-to-device communication

There is a misconception that the Internet of Things, by definition, means that many devices are connected to many other devices, increasing the risk that a successful attack leads to catastrophic failure or takeover of a substantial portion of your IoT infrastructure. In many cases, devices have a single purpose and only need to send the data they collect to a single location. By limiting the number of IoT devices that talk to each other, we can better secure each one and limit the damage should any breaches occur.

3. Retain control over your IoT infrastructure

The risk is yours – any failure in security is your responsibility and you will be held accountable for the result – so it is important to maintain control. This starts with device selection: Make sure that devices either have the security features you need or, preferably, are “open” so you can analyze and understand how they work, and then add any features you need to fill security gaps. This includes the ability to update devices in an automated and secure way and to control that process yourself.

4. Use encryption from end to end

It’s critical to encrypt communication between devices and data-ingestion points to make sure nobody can listen in, tamper with sensitive data in transit, or recover enough information to spoof or impersonate the device and feed the system manipulated data. Modern encryption techniques work in much the same way as HTTPS does to protect information online. Encryption also needs to be tied to device identity to ensure the data we think comes from a particular device actually does.

5. Leverage existing expertise

Apply proven security technologies, tools, and best practices used in traditional IT landscapes. In many cases, they can be implemented directly: by using digital certificates or equivalent, by restricting what IoT devices can do and communicate with, and by adding protection and monitoring mechanisms. In other cases, such as micro-controllers and low-power networks, we may need to apply new techniques, but we can draw on existing principles and concepts.

IoT adoption is still in early days. Unfortunately, that means that there aren’t many established standards yet, and while the number of devices brought to market is quickly rising, certification schemes and regulations are lagging. As a result, adopters still need to carefully plan and build in security from the start and properly evaluate any IoT equipment brought in house.

As large technology providers recognize the security challenges with new IoT technologies and software solutions, the situation is rapidly improving. At SAP, we’re also committed to both describing the pitfalls and providing clear guidelines to overcome them.

This article originally appeared on the SAP Community.


Internet of Things – Digitalist Magazine

Why The IoT Means You’ll Never Run Out Of Paper

In business, efficiency is critical. Any improvement to a standing process – even if relatively small – can have a profound impact when scaled up. Consider, for example, software that allows a train to travel more efficiently. While cutting a minute or two from a trip may not seem that significant, when those fuel savings are scaled up over thousands of trips, it becomes a serious cost savings.

The Internet of Things (IoT) has had a transformational effect on industries seeking to make their processes easier and more efficient. By leveraging the power of connected devices and data analysis, companies and governments are figuring out new ways to modernize established processes. Cities use IoT technology to reduce traffic congestion and pollution. Farmers use connected devices to improve crop yields. Railways use IoT technology to enhance safety and timeliness.

And companies can use it to ensure they never run out of paper supply.

How the IoT can keep paper supplies fully stocked

The applications of IoT technology are so varied as to seem almost unlimited. Companies are discovering ways, large and small, to increase productivity and efficiency through the use of data-based sensors and other devices.

Consider the case of paper companies and printer producers. The two have what should be a naturally synergistic relationship. Each produces half the equipment in a common office device. Yet, historically, paper companies and printer producers haven’t necessarily worked together. A business purchases its printers and paper from separate suppliers. Paper is restocked either through an ordering process initiated once paper stock runs low, or though a planning process that automatically orders paper through electronic data interchange (EDI). Both approaches are based on planned paper consumption, not real-world use, which often is different. In addition, there is always a time lag, even using the planning approach, between paper order and receipt.

It’s easy to see the inefficiency in this process. Waiting for the printer’s “load more paper” light to start flashing is a reactive move. It’s also inefficient, as it all but ensures printers regularly run out of paper, forcing workers to wait while paper is resupplied or go to another location.

Now consider an even larger problem for companies that require a variety of specific paper types in order to operate. If an error during the inventory process results in one paper type running out, the company’s productivity slows and costs rise while it waits for delivery.

Fortunately, this is a scenario that no longer needs to occur, thanks to IoT-driven process improvements. Paper companies and printer producers can collaborate to ensure paper supplies remain constant. Sensors can transmit data from printers to paper companies, showing the precise type of paper being used and predicting when it will need to be replenished. This real-time data can be integrated into the planning process – ideally using the print shop’s production planning software – and order paper automatically via EDI based on actual consumption.

This ensures there are no gaps in supply, no halt to productivity. The predictive power of IoT technology helps printer and paper companies collaborate in an efficient manner that benefits all parties: Businesses are guaranteed the timely replenishment of paper inventory. Printer and paper companies benefit from the synergies facilitated by the IoT. Print shops can offer customers the option to automatically stock paper as a value-added service, requiring no action from the customer.

The end result? Greater productivity, higher efficiency, enhanced collaboration, and new business opportunities.

The awesome growth potential of connected devices

Ensuring continuous access to paper is just one small example of the transformational power of IoT technology. Opportunities such as these can be found in virtually every industry. The way we work, live, travel, and take care of our health and our homes can all be improved through the use of smart, connected devices.

The most exciting thing? We’re only seeing the tip of the iceberg. Because IoT technology is relatively young, even more revolutionary opportunities are likely to develop. According to Gartner, roughly 8.4 billion connected devices will be in use in 2017. This represents a 31% jump over 2016. Business spending represents slightly less than 60% of the overall market.

By 2020, overall IoT spending is expected to reach nearly $ 1.3 billion. This rapid growth will be driven in part by increasing adoption in the manufacturing, retail, healthcare, and transportation sectors. Cross-industry IoT spending, featuring use cases relevant to all industries (think smart buildings), will also be a significant growth driver.

The takeaway

Ultimately, IoT technology holds not only the promise of sustained innovation and business transformation, but profound changes to the way we live and work. Having printers that never run out of paper is but one example of the almost countless number of opportunities that will arise as IoT technology matures.

Learn how to bring new technologies and services together to power digital transformation by downloading The IoT Imperative for Energy and Natural Resource Companies. Explore how to bring Industry 4.0 insights into your business today by reading Industry 4.0: What’s Next?


Internet of Things – Digitalist Magazine

Data Geeks Rewrite The Business Rules Playbook

When it comes to digital business, Andrew McAfee knows a thing or two. A principal research scientist at MIT, prolific writer, and management expert, McAfee is a leader in understanding and explaining how digital technologies are changing business, the economy, and society.

At the recent SAP Leonardo Live event in Chicago that focused on digital transformation, McAfee urged his audience to throw out the business playbook they’ve been using for the past 30 years.

“The right way to run a factory in the steam era became a really, really bad way to run it in the era of electrical power,” he said. “Similarly, during a technology transition — and afterwards — the advice you used to follow becomes bad advice.”

McAfee explained that fast, profound shifts are occurring in three key areas: process, company, and industry. And he provided a new playbook to help companies navigate those changes and succeed.

Process: From people to machines

The traditional wisdom about process, which McAfee defines as “getting stuff done,” is to let machines handle the routine work like accounting or record keeping, and have people use their accumulated wisdom to make the judgements calls. This is the playbook of yesterday.

“Profound shifts are occurring in three key areas: process, company, industry”

McAfee explains that in most companies, decisions have typically been based on the highest-paid person’s opinion, or “HiPPOs.” They follow their gut, past experiences, and education, but they are being threatened by what McAfee calls “the Geek” — people who use data to make decisions.

“When the Geek needs to make a tough call, they gather evidence, do the best analysis they can, then they follow the evidence — even if it doesn’t go along with their gut or their experience,” McAfee explains.

“But here is where things get interesting,” he says. “In 136 studies of decision making by HiPPOs versus Geeks, 48 percent of the time HiPPOs added nothing over Geeks’ approach. Furthermore, 46 percent of the time HiPPOs provided an inferior decision. HiPPOs were only clearly better in eight percent of the cases. We need to make HiPPOs an endangered species.”

McAfee believes that with artificial intelligence (AI) and machine learning, “Now we have a new toolkit to help us sift through these crazy amounts data, see patterns, and make very sophisticated, accurate judgements in extremely complicated situations.”

He explained that AI and machine learning technologies have leapfrogged much further ahead today than anyone could have anticipated, and are ready to take over making judgement calls.

“Go is 3,000-year-old Asian strategy game. Computers have been laughably bad at Go. Until last year, when the world’s best Go player became a computer,” said McAfee.

Analyzing the game played by AlphaGo, a Google AI company, experts focused on one particular move — move 37 — that made no sense to human players but ultimately helped the machine win. The lesson learned? AlphaGo doesn’t just play the game better than we do, it plays differently than we do.

McAfee is optimistic: “Together with machines, we’re going to make progress in some very difficult areas. And when we rewrite the business playbook, remember: machines are demonstrating excellent judgement.”

Company: From core to crowd

“For about 25 years we’ve been telling business that to succeed they need to strengthen their core — ‘core competency, core strength, core capabilities,’” said McAfee. “The idea of the core is a small number of things that differentiate you from competitors, realize value for customer, help you succeed in your markets.”

But, he explains, now there are millions of interconnected adults on the internet and if you can activate the energy of the crowd, amazing things can happen.

McAfee provided an example where a Harvard Business School expert on crowd sourcing and innovation Karim Lakhani worked with the National Institute of Health (NIH) and Harvard Medical School to try and improve the ability to sequence human white-blood cell genomes. They got good results.

But when Lakhani opened up an online competition to the crowd as an algorithmic challenge they got amazing results in both accuracy and speed. McAfee says the top results, “showed an improvement that was three orders of magnitude faster, without sacrificing accuracy,” compared to the NIH and Harvard Medical School results.

“We’re seeing companies that don’t focus on growing their core. They embrace the crowd from the start,” said McAfee. “We will see how this plays out. But when we rewrite the business playbook, we need to remind ourselves: the crowd is surprisingly wise.”

Industries: From industry to platform

“I grew up in McKinsey understanding the playbook rule: There is no substitute for knowing an industry inside and out. For the past 30 years, the business playbook has said industry structure determines successful business models,” said McAfee.

But in three very different industries McAfee argues that platform is making the difference when it comes to disruptive innovation.

Take the smart phone industry: The defining moment was when Apple opened up the App Store as a platform for outside developers. For urban transportation, it was Uber and now group fitness is being transformed with ClassPass, a platform that allows people to take classes at gyms by subscribing as members to ClassPass, not the gym.

McAfee explains: “ClassPass says, ‘Don’t join a gym. Sign up with us. You can pick whatever classes you want and get variety.’ To gyms they say, ‘you have some empty spaces. We can fill them. You won’t get the full price but some revenue is better than none.’”

Like with Apple and Uber, the platform for ClassPass brings together products, services, sellers, and consumers.

If platforms work, McAfee believes there are many advantages: You get the network effects of increased demand, companies can control the rules of engagement. With an open platform, you can crowd-source innovation and get additional information, which is used to create better pricing and matching of services.

This blows apart the distinct industry-sector differences people used to assume fueled growth and replaces it with the mandate to find the right platform for your business.

McAfee concludes, “I am pretty confident that the successful businesses of tomorrow are going to have a lot more machines, platforms, and crowds in them than today. I am really confident that following the industrial-age business playbook is a really good recipe for failure.”

This article originally appeared on SAP News Center.


Internet of Things – Digitalist Magazine