The IoT and the Supply Chain
The Internet of Things (IoT) is defined as a network of physical objects or “things” embedded with electronics, software, sensors and network connectivity. These enable the IoT things to collect and exchange data remotely across existing network infrastructure.
The IoT has been billed as the next Industrial Revolution because of the impact it will have on the way governments and businesses interact with the world, and on how it will influence the way consumers will live, work, entertain and travel.
Today, we can already see the beginning of the IoT revolution. New cars come pre-loaded with applications for consumers and maintenance technicians that connect to the Internet and provide data to manufacturers. Smart home devices control the lighting, heating, security, music and more. Fitness trackers capture personal health and exercise information, and wearable medical devices can alert medical professionals, medical responders or families in case of emergency.
Research firm Business Insider recently predicted that there will be 24 billion IoT devices installed by 2020 and that six trillion dollars will be invested in IoT solutions over the next five years.
The IoT will be embraced in different ways by three general groups: business, government and consumers. Businesses are already driving IoT adoption and education and will continue to develop new and more pervasive applications. They realize IoT applications have the potential to improve their bottom line by lowering operating costs, increasing productivity and expediting expansion to new markets. Governments will follow businesses and primarily focus on increasing productivity, decreasing costs and improving and securing their citizens’ quality of life. Consumers, while lagging behind businesses and government adoption, will purchase a massive number of devices and invest a significant amount of money in IoT ecosystems. Already consumers are embracing products like the Nest, Fitbit and Amazon Dash despite significant concerns about privacy. In fact, 58% of consumers are ‘very concerned’ or ‘highly concerned’ about potential hacking and data theft carried out against their connected devices, with 37% having already experienced a security incident or privacy problem in the past.
Businesses still are pushing to drive the IoT, and within specific sectors, the IoT is gaining ground. The primary business sectors driving IoT growth are automotive, fitness, medical wearables, industrial, home, and consumer applications. The major players at the forefront of early adoption include Honeywell, GE, Amazon, Google, Apple, Fitbit and Microsoft. Other sectors following suit include defense, agriculture, infrastructure, retail, logistics, banks, oil and gas, insurance, food services, utilities and hospitality.
In fact, many of these segments are already making major commitments to the IoT, for example:
- 35% of manufacturers already use smart sensors
- 10% of all manufacturers plan to implement smart sensors within a year and additional 8% within 3 years
- An estimated 75 million IoT devices will be in use by 2020 in agriculture
- 310 million IoT devices are expected to be in use by food service companies in 2020
The food supply chain industry is one area where the IoT can have a significant impact, especially in terms of traceability and food safety. Many organizations are already working on IoT applications.
For example, in agriculture, sensors are used to track soil acidity, temperature, moisture and other variables that help farmers choose exactly when to harvest for maximum yield. In logistics, shipping containers are fitted with tracking sensors to help reduce costs and provide vital information in the event of lost or damaged shipments. These tracking devices also provide information to help build an overall traceability picture of goods and products during their supply chain journey. IoT applications are being used in warehouses to enable automation leading to increased efficiencies and food safety. More visible to the consumer is the use of intelligent digital signage in retail stores and fast food outlets, where content can be scheduled to automatically change depending on day of the week, time of the month and different holidays. Or newer technologies such as gender recognition which trigger content according to the shopper’s sex.
In addition, IoT applications are being integrated into IT and software solutions specifically designed for the food supply chain. For example, LINKFRESH uses IoT applications to acquire data from, and talk to, a variety of different sources. These include devices like weigh-scales, temperature probes, graders and other pack-house machinery. The natural progression of these capabilities is integration of the next generation of IoT devices across the food supply chain.
Within the food supply chain IT solutions use “beacons,” simple devices, which look like a small plastic coin. These contain a watch battery and other electronics that emit a pre-programmed, low power identification code using a built-in radio. This code can be picked up from a mobile device, such as phone or tablet, over a Bluetooth connection. The mobile device can detect a specific beacon whenever it is in range. For example, a farmer may attach a beacon to his farm equipment, such as a sprayer or plough, and know precisely who is using which piece of equipment at any given time, and what they are doing with it, such as applying fertilizer. This assumes that the operators have their mobile devices with them. Beacons also allow farmers to quickly identify vehicles or trailers, or even palettes and boxes, when the need to find specific products arises, as in a product recall scenario.
Of course IoT devices can do much more than act as a beacon across the supply chain. They can act as triggers to pass information securely from organization to organization and aid in compliance and traceability. For example today, data loggers can record temperature data from sensors installed in temperature controlled trucks. These readings can be accessed wirelessly whenever a vehicle arrives at a given drop-off point. In the future, when connected via the IoT, these devices will communicate securely over the cellular phone network to “phone-home” and provide real-time data on their current condition and operating temperature. This will enable producers to proactively identify issues before they are passed on to consumers.
As mentioned earlier, all of these benefits come with risks that are well-known to consumers. The increase in the number of connected devices storing and transferring data provides hackers and cyber criminals with more points of entry. Most consumers and businesses will be very concerned about the possibility of their information getting stolen and disseminated. They will demand to know exactly who has access, which data can be shared with and what security measures are in place to prevent data loss.
If the IoT is ever going to fulfill its promise, like delivering potentially life-saving applications in the food supply chain, then manufacturers must address not only security issues, but also public perception.