internet of things, connected infrastructure & the modern supply chain

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The Internet of things,connected infrastructure &The modern supply chainCSCMP Heartland RoundtableOctober 29, 2015Jeff [email protected]

AgendaThe Internet of Things, Defined

Impacts & Opportunities

Elephants in the Room

Ask for a show of handshow many in the audience are shippers? Suppliers or Consultants to Shippers? Acadamia?

Heres the three things well cover today:

We want you to walk away provoked personally & professionally enough so that youll think differently about your day-to-day tasks.

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Smart Homes

Many of you are probably familiar with the term Smart Home; Some of you may have this technology in your homes today.

Smart Homes are an example of the internet of things, and they are here today not some distant future.3

What is The IOT?

Its people, places & things that are connected to the internet, embedded with sensors, and communicating with each other.

There are many definitions of the Internet of Things, but we like to boil it down to this:

Lets look at each part of that definition4

What is The IoT?


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People & The Internet

http://www.emarketer.com/Article/Internet-Hit-3-Billion-Users-2015/1011602

People were the first users of the Internet way before things.

Ubiquities internet adoption by people is important for the IoT revolution, and by 2018, almost half the people on the planet 3.6 billion people will be able to access the internet.

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Places & The Internet

http://wearesocial.net/blog/2014/09/world-mobile-phone/

Place is location, and today that means mobile devices (including wearables). More and more people are accessing the internet via their mobile devices.

The number of unique mobile phone users around the world has just passed50%of the worlds total population.

Growth is staggering -- 750,000new mobile users every day or9 newusersevery second. (GSMA Intelligencehttps://gsmaintelligence.com/)

More people on the planet have a mobile device than a toilet (water.org).7

Things & The Internet

https://www.lordabbett.com/en/perspectives/equityperspectives/finding-growth-in-an-increasingly-digital-world.htmlion today.

So first people, then places, and now things are connecting to the internet.

Projections differ, but a conservative report estimates there will be 50 billion devices connected to the Internet by 2020, compared to 18 billion today.

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What is The IOT?


Ok, so all these people, places and things are connected to the internetso what?9

Digital Nervous System

http://postscapes.com/what-exactly-is-the-internet-of-things-infographic

Connectivity is one thing, but smart connectivity is another, and thats where Sensors come in. The sensors are like nerve endings in the body we are building a digital nervous system.

A sensor on something can make that something smart it can tell something else

Know positionDetect motion, temperature, humiditySound, vibrationThe presence of chemicalsForce, load or pressureLeaks,Electricity or magnetismAcceleration

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Flexible

/

http://venturebeat.com/2015/02/07/how-the-internet-of-everyday-things-could-turn-any-product-into-a-service

If you think about all the different kinds of things in the world, you realize how innovative these sensors must be. They continually have to be flexible, like this product

This is a printable, flexible circuit/sensor created by Thinfilm Electronics.11

Small & Affordable

http://globalbiodefense.com/2013/03/13/electronic-sensor-tattooed-on-skin-as-real-time-health-monitor/

Small and personal, like this digital tattoo yes, its a temporary sensor that can be attached to skin that has a multitude of functions

This was developed by researchers at the University of Illinois for health monitoring.

Its a temporary stamp that lasts about two weeks, then flakes off like the natural process of exfoliation.

Average sensor prices have dropped to 60 cents from $1.30 in the past 10 years (Goldman Sachs).

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What is The iot?


So connecting everything to the internet, making those connections smart, and then ultimately, helping it all communicate with each other.13

Always Connected & Communicating

For instance, Diageo could upload promotional offers while the bottle is in the shop but change that information to cocktail recipes when the sensors show the bottle has been opened at home.

http://www.diageo.com/en-row/ourbrands/infocus/Pages/diageo-and-thinfilm-unveil-the-connected-smart-bottle.aspx

This bottle has a smart label attached to it. Its a printable-sensor created by ThinFilm that has NFC capabilities.

They will always know where this bottle is in the supply chain location

They will always know its temperature.

Diageo knows when it gets into a retail outlet and can change the messaging that a consumer sees when they tap their phone to the bottle, like, We have a special today buy one, get one for half price.

After you take it home, the bottle can tell Diageo if its been opened, and it could changes the messages, like, Try this receipe.

Think about all the data Diageo is getting through this products life cycle, and the customized experience the consumer is getting.

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Is It A Good Thing?

Bad news the scale is threatening to cut off our access to the fridge

So all of this smart, connected stuff, talking to each otheris it a good thing?15

Really!?

Have we just gone to far?16

http://www.gartner.com/newsroom/id/2819918

Gartner puts the Internet of things very clearly at the top of the Peak of Inflated Expectations. And by being here today, talking to you about this, we are clearly adding to those expectations.

But they are also projecting the IoT will reach the Plateau of Productivity in the next 5-10 years.17

*PWC

http://www.pwc.com/us/en/advisory/business-digital-technology-trends-sensors.jhtml

How many of you here work in a supply chain business that touches consumer products or industrial products?

52% of retail and consumer products companies are investing in IoT technology, and 33% of industrial products companies (PWC)

From your inventory to its container, from the container to the carrier, from the pallet to the warehouse. The more your assets can 'speak' to one another and share data, the more they can work together to help you improve your processes."*

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IoT & Supply Chain Transformation

Inside The BoxOutside The BoxThe Box

We categorize the impacts to Supply Chain in three parts:

What happens to The box -- the building itself.

What happens Inside the Box the manufacture, movement and storage of products inside the building

What happens Outside the Box transportation of goods19


The Box

Energy & Sustainability

Predictive Maintenance20

The BoxEating its own cooking: Malaysia pilot project1300 sensorsPower usageDevice managementCarbon emissionsUtility bill analysisProjected facility savings: $1m/year20%-30% energy reduction across all manufacturing plants

http://www.wsj.com/articles/cisco-tests-internet-of-things-in-its-supply-chain-1431554801?cb=logged0.13812174461781979

http://blogs.cisco.com/cloud/energy-management-and-the-factory-of-the-future

In one of the latest initiatives to get its own supply chain fully wired, Cisco has been installing thousands of sensors in a plant in Malaysia to monitor and reduce energy consumption. Mr. Kern said in an interview with The Wall Street Journal that the team leading the project believes that implementing the system throughout Ciscos worldwide production sites will help reduce energy consumption by 20% to 30%, translating into tens of millions of dollars in cost savings.

The Malaysia project is a pilot program that is part of a $4 million fund the company established in which employees brainstorm and test projects to make the company more productive. The projects cover a wide range of supply chain issues and are relatively small-scale for a $47 billion companythe energy management project in Malaysia cost less than $700,000with the understanding that most will fail. But those that succeed can provide innovative solutions and major savings, Mr. Kern said.

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Inside The Box

Material Handling SystemsWarehouse Control SystemsWarehouse Management SystemsRobotics

Distributors and manufacturers are challenged with keeping track of assets that are in almost constant motion. Without appropriate strategies in place to manage the tracking of equipment, supplies, and products, the likelihood of misplacing or losing valuable assets increases. Utilizing real-time IoT devices eliminates manual data entry and automates tracking processes, reducing human error and insulating businesses from costly asset loss.24

Inside the BoxOld system: Pickers, list of items, walking the warehouse, filling a tote

New system: Cart-like robots, list of items, retrieve products, deliver to worker.

All Things communicate

http://www.supplychain247.com/article/enter_the_smart_internet_of_things_warehouse/Zebra_Technologies

Lids, an Indianapolis company, sells fashion athletic headwear, team apparel and other fan novelties.

In the old days, order takers - known as pickers - would get a list of items and walk around the warehouse, looking for the right ones and loading them up in a tote. It took a long time.

Recently, however, Lids started using anInternet of Everything(IoE)- basedrobotic systemand life has become a lot more efficient.Now a list with items is automatically sent to cart-like robots, which retrieve the products, place them in bins, and deliver them to a worker.The worker then loads the material onto a truck in the correct order. Sensors detect everything from a robots location to whether pallets are en route to the shipping dock and then wirelessly transmit that information to a remote monitoring team.

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Swisslog CarryPick

DHL Vision PickingReplace hand-held scanners and paper w/ Google glass and WMSTell fastest route to productsReads bar codesTest results: 25% reduction in pick/pack time.Best application: e-commerce warehousesTemp workers

http://www.wsj.com/articles/dhl-unit-plans-google-glass-experiment-in-us-warehouses-1439568950?mod=WSJ_TechWSJD_NeedToKnow

Wearable computers likeGoogleGlass never took off with consumers but the Internet-connected eyewear are finding their niche in the logistics industry.

Exel, the freight forwarding arm ofDeutsche PostDHL Groups supply-chain management business, is preparing to test vision picking replacing handheld scanners and paper job orders with wearable smart-glass devices outfitted with warehouse management softwarein two U.S. warehouses later this year.

The devices can tell workers the fastest route to find products and can read bar codes, which reduced the time needed to pick out an item and pack it for shipping by 25% in tests at a Dutch warehouse earlier this year, Exel says. The technology has the most application in e-commerce warehouses, where workers might need to find a handful of items out of more than a million individual products, the company said.

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Outside The Box

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Smart RoadsTim Sylvester: Make dumb infrastructure smartFactory-built, modular pavementEmbedded sensor networkCapture roadway conditions, cracks, potholes, traffic jamsFuture: Driver-less vehicles talk to the road

http://www.kansascity.com/news/business/technology/article15650132.html#storylink=cpy

As the nations overall repair needs reach the trillions of dollars, Sylvester and a coming generation of engineers hope to convert dumb old infrastructure into tech-rich traffic lanes, pipelines and utilities boasting brains tuned to the 21st century.

A highway project in the Netherlands uses solar panels and tiny windmills blown by passing trucks to store energy for embedded LED lights, allowing roadways to glow at night.Scientists are testing self-healing concrete designed to produce bacteria to fill cracks, according to the global engineering firm Arup.Some U.S. bridges are currently dotted with sensors that provide real-time data when the heaviest trucks, possibly illegally overloaded, rumble across.Drawing boards around the world include pavement threaded with heating elements to melt snow and roadside Wi-Fi to alert motorists to rough patches ahead.Many futurists expect that by 2030, self-driving cars will be wirelessly talking to one another and to the road itself, promising to make motoring safer, swifter and mistake-free.

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Smart Roads

Smart RailroadsGE Evolution Locomotive220-ton computer6.7 miles of wiring, 250 sensors, 9 million data points/hourGear case: oil levels & contaminants that lead to axle failureThese conditions, in this sequence, means 90% chance this failure will happen.

http://www.fastcompany.com/3031272/can-jeff-immelt-really-make-the-world-1-better

Measuring 73 feet long and weighing in at around 436,000 pounds, the Evolution drinks diesel from a 5,300-gallon tank

At roughly 220 tons, it is in many respects a hurtling computer. Its array of sensors and data-collecting devices complements its bulky mass with a sleek, digital agility that will grow only more impressive and more significant with time.

Its insides contain 6.7 miles of wiring and 250 sensors that put out 9 million data points every hour.

For example, GE has begun putting a radio-frequency sensor inside the locomotive's gear case to transmit data on oil levels and contaminants, and by parsing that data, Stokes says they should be able to predict the conditions that lead to axle failures.

"The goal is not just to take data I have today, but to go back and look at the data we have already and see if it shows we could have predicted a historical failure," Stokes says. His team would look at the broken-down locomotive and comb through its data banks to try to discern a pattern. "We want to turn that into an algorithm that helps us predict the future," Stokes explains. "We want to say: These three conditions, in this sequence, mean there's a 90% chance this failure will happen."

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Elephants in the roomSecurity70% of the most commonly used IoT devices contain security vulnerabilities (HP Study).TalentTech talent. Data scientists.DataData is the river. Insight is the goal.

Predictive Analytics

Predictive analytics is the application of advanced statistical analysis of structured and unstructured data sources to identify patterns and predict future events or outcomes. For example, predictive analytics can provide companies with a look into the future and give them opportunities to identify emerging patterns in the marketplace that can lead to highly effective and personalized customer engagement strategies.

3. Beyond Push and Pull, Youll Be Able to Predict.The old way of manufacturing was based on a push system. Youd produce a product based on your expectations of demand, and then push it out to various markets accordingly. Expectations like the best laid plans, often go awry. So the next step was to create a pull system, where demand and inventory stock triggered production up the supply chain. This is a good system, but it depends heavily on accurate data, and many companies find it difficult to execute without a centralized visibility platform.

The IoT will further incentivize moving toward a centralized visibility platform by taking push and pull a step furtherit will use real-time data and analytics to predict demand, combining the best of planning and execution. Real-time data would feed into constantly improving models of demand, creating a production system thats always in pulse with the markets.

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GE New Business ModelOutcomes instead of functionalitySelling locomotion, not locomotives.Infrastructure as a Service (IaaS)Remote Diagnostics (predictive maint)Trip Optimizer (fuel savings)Yard Planner (decrease dwell)Movement Planner (improve speeds)

An approaching third wave, enabled by data and analytics, does something new. It strikes an agreement between GE and a customer for a certain kind of outcome, rather than a certain kind of functionality.

"Or we're selling locomotion, not locomotives. And we guarantee that back to our customers.

GEannounced today that it was expandingits Predix Internet of Things platformto provideInfrastructure as a Service (IaaS). With todays announcement, the company will be providinginfrastructure services to run those applications.35

IoT Curated Website/Email

Thank youJeff [email protected]