The Internet of Things
Supply Chain Network Scholars
Spring 2016
Team: Krishna Nyshadham
Alexander Hebrank
Isabella Miller
Daniel Ivanhoe
Takeaways
 What is IoT?
 Insight into challenges and opportunities in supply
chain in the process of IoT implementation
 How societal, economical, environmental, and
governmental factors are affecting this trend
 Future projections for IoT in supply chain, tech industry,
and the global environment
What is IoT?
The Internet of Things (IoT)
Defined by McKinsey & Company:
“sensors and actuators connected by networks to computing systems to
monitor the natural world, people, and animals”
What industry professionals are saying:

“Buzzword that is streamlining the world
around us”-Forbes

Opportunity to “discover profitability by
uncovering data from newly connected
devices and systems that optimize
processes, deliver deep business
insights, and drive innovation.” –Intel

“Intelligent efficiency….adapted,
anticipated, and networked.” -ACEEE
Sensors and
activators
Technology
People and
process
What does it look like?
 A fully integrated and more
automated supply chain process
 Every step of the supply chain is
impacted by increasing:





Overall efficiency
Safety
Meaningful data usage
Accountability and tracking
Customer satisfaction and
relations
 Overall net handprint vs
footprint
 COST SAVINGS $$$
 Several other factors
Challenges & Opportunities in the Industry
The challenges and opportunities are one in the same. Here are some.
The Internet of Things IS technology and the idea is still new.
Offer unique services, products, and
consulting. A lot of the necessary
technology and service still does not exist.
“Market for IoT components and systems grew
160% in 2013-2014, and could exceed 30% a
year through 2025.”-McKinsey&Company
Increase global handprint.
Decrease global footprint.
“Historically, the public has only
focused on the negative impacts of
ICT.” -Intel
Cost reduction.
-Need continued price declines in
computing, storage, RFID tags, etc.
-Who can do it better, faster?
Improve their own
existing supply chain
processes. (DDVN)
“Spanning utilization,
warehouse space
optimization, or production
planning.”-Gartner
Data collection, better
usage, security,
regulations, and bandwidth
to handle it.
“Only 1% of data from an oil rig
with 30,000 sensors is currently
examined.”McKinsey&Company
Talent demanded in
employees that robots
can’t replace.
“Tasked with “delivering,
sourcing, and maintaining the
technology that makes IoT
possible to begin with.”
Societal Factors
Consumer
Retail
• Smart home
control
• Optimized
energy use
• maintenance
• Product
tracking
• Inventory
control
• Focused
marketing
Industrial
• Smart Meters
• Wear-out
sensing
• Manufactoring
control
• Climate
Control
Automotive
• Parking
• Traffic flow
• Anti-theft
location
Medical
• Wearable
devices
• Implanted
devices
• Tele-health
services
Environmental
• Species
tracking
• Weather
predicition
• Resource
management
Military
• Resource
allocation
• Threat
analysis
• Troop
monitoring
Agriculture
• Crop
management
• Soil analysis
Global Implementation
Developed Societies
Developing Societies

Focus on improving existing infrastructure to
implement “Digital Transformation”.

Focus on implementing basic utilities for better quality
of living and match developed economics

Immediate need to beef-up bandwidth,
sensor, router, and related infrastructure

Very less current scope for the progress of IoT

Unprecedented demand resulting in
challenging and competitive supply chain
trend.

Rising demand for basic infrastructure. Huge surge in
trends anticipated in supply chain aspect of IoT 
business and innovation opportunity
Leading up to 2025, 40% of value could be generated from developing economies.”-McKinsey & Company
India Study
Economic Factors
“Companies will need to decide when and how to invest in the IoT and will need to develop sufficient knowledge to
make smart investments.” –McKinsey & Company
Factories


10-25% potential improvement in labor efficiency = robots replacing humans
10-20% energy savings
Job Market
 Demand for workers will fall in processes that become automated
 Human work will shift to installing and maintaining the automated processes
IoT could make up 11% of world’s economy by 2020.
Environmental Factors

“footprint” vs “handprint” viewpoint in net solutions


Need to implement less energy AND clean energy

May be costly to implement but pay off in carbon reduction
and foregone electricity
Recognizing the exponential benefits of Information
Communication Technology
Project with Daikin Applied

Rebel HVAC units installed with intelligent gateways

Intelligent gateways extract data from Rebel HVAC unit to the
cloud rather than through IT system
•
Reduce truck rolls, service calls, reactive visits, missed energy saving
opportunity
•
Machines making decisions between other machines and providing
operational data at the same time


INTELLIGENCE = PREPARATION = ENERGY SAVINGS
Intel projects overall 16.5% decrease in emissions and
$1.9 trillion in savings in fuel costs by 2020
Governmental Factors
Safety and Security
Data Security
As IoT popularity
increases, do does:
Data Sensitivity
Hacking Ability
Physical Safety
IoT devices may fail
just as Wifi devices
are hackable
-Smart thermostats
-Smart Cars
Standards
Hewlett-Packard Study of IoT
• Audited 10 popular internet-connected
“smart” devices
• Found 250 vulnerabilities
• 60% had a lack of encryption during
transport of firmware updates
• 70% used unencrypted network services
• 80% failed to enforce use of sufficiently
long or complex passwords
Most smart tech from small
kick-starter companies
Federal Trade Commission- IoT
Security Report
• Groundwork for future regulation
Policy Creation Slows Down Supply Chain
 Policy creation and governmental regulation is a part of the technology supply
chain.
 Ex. Self driving cars
 require the support of regulatory approval
 New regulatory framework for such new technology
 Need established rules about the liability
 Slows down the overall creation process
 Cannot move forward in the until these policies are in place
Projecting the IoT Future
By 2020:
• 4 billion connected people
• $4 trillion revenue opportunity
• 25+ million apps
• 25+ billion embedded intelligent systems
• 50 trillion GBs of Data
Summary
1
2
3
• The supply chain is the backbone of any
future IoT implementations and one of the
most sensitive attributes in IoT.
• There is opportunity at every step of the
supply chain- from development to logistics.
• Any factor-external or internal- to IoT will have
a huge impact on the dynamics of supply
chain strategy thus cannot be ignored.
References
http://www.cisco.com/c/en/us/solutions/internet-of-things/overview.html
http://www.intel.com/content/www/us/en/internet-of-things/iot-technology.html?cid=sem116p234713gc&intel_term=iot%20overview&gclid=CK7c0dOVw8sCFVNqfgodS44KXw
http://www.forbes.com/sites/jacobmorgan/2014/05/13/simple-explanation-internet-things-that-anyone-can-understand/#61eee3346828
http://appirio.com/category/business-blog/it/2015/12/how-the-internet-of-things-will-change-the-job-market/
http://www.mouser.com/applications/iot-reality/?cm_mmc=PressRelease-PR-_-Mouser-_-IoT_Site_Update-_-2015-07-01
http://www.intel.com/content/dam/www/public/us/en/documents/corporate-information/policy-iot-energy-environmental.pdf
https://g.foolcdn.com/editorial/images/154865/internet-of-things-security_large.png
http://www.wassom.com/top-5-legal-issues-internet-things-part-1-data-security-privacy.html
http://www.computerworld.com/article/2490587/networking/popular-internet-of-things-devices-aren-t-secure.html
https://www.ftc.gov/system/files/documents/reports/federal-trade-commission-staff-report-november-2013-workshop-entitled-internet-things-privacy/150127iotrpt.pdf
www.mckinsey.com/mgi
http://cerasis.com/2015/02/25/internet-of-things/
http://www.brookings.edu/~/media/research/files/papers/2015/10/26-robots-emerging-technologies-public-policy-west/robotwork.pdf
Questions?