I’m always surprised when I speak with an executive in supply chain, logistics, or transportation who still believes that the Internet of Things (IoT) is mostly hype—while at the same time, the disruptors to these traditional industries are utilizing smart, connected technologies to accomplish their missions.
As one of the earliest players in Vehicle Management Systems, I’ve been in a unique position to watch the evolution of Industrial IoT (IIoT). When I founded I.D. Systems 25 years ago, the idea of tracking and monitoring physical assets (e.g., forklift trucks, trailers, intermodal containers, airport vehicles, rental cars) was new and often approached very conservatively by industry executives.
Today, companies wouldn’t consider operating without not only having visibility to those critical assets, but also managing them virtually. In fact, playing to win in the progressively more connected economy means focusing on velocity vs. visibility: moving product to market faster, more cost effectively, accelerating delivery to customers, and increasing utilization of their key assets…
Accomplishing this in today’s market requires connecting the key pieces of the value chain via the Internet and enabling this optimization based on both historical analytics and algorithms that drive real-time, activity-based decisions.
We’ve seen players like Walmart and Amazon use velocity in their supply chain and distribution as a key strategy to disrupt traditional competitors. We’ll see these types of disruptions expand into other industries and threaten the market positions of entrenched leaders.
It’s no wonder that every leading industry analyst projects enormous adoption and market growth over the next 3 – 4 years. The IIoT market is projected to be US$150 billion by 2020 with global growth of almost 28% CAGR.
The good news for companies that have been reticent to invest in IIoT is that the costs of adoption are lower than ever. The costs of key elements—sensors, bandwidth, equipment, storage—have all been driven down significantly and that trend will continue as manufacturing automation increases and other market dynamics play out.
Sources: HIS, HSBC, A.T. Kearney, Internet World Stats
I’m not implying that there are no risks to implementing a comprehensive IIoT strategy. Some of the top concerns of executives regarding IIoT adoption, such as cybersecurity, lack of standardization, and limitations of legacy systems, present very real challenges. I believe, however, that we have reached the tipping point in the market where the benefits far outweigh the understood risks, and every company in supply chain, logistics, and transportation has to consider the unknown, but very real risk of disruptors utilizing IoT and artificial intelligence to shift business models and markets.
Now is the time to get serious, develop a solid strategy, and take action.
I recently published an industry brief providing more detail on the factors that make today’s market ideal for moving forward with IIoT, in addition to a better understanding of the associated risks. You can download a copy of The Best of Times and The Worst of Times for the Internet of Things by clicking the Button below.