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So Many “Things” to Contemplate

  • Ron Crabtree
  2018

Although the internet of things (IOT) is new to the lexicon of many business professionals, using the internet to provide real-time information about a “thing” actually has been happening for a long time. For years, IOT capabilities have led to heightened efficiency, accuracy and economic benefits; enabled users to be more agile and responsive; and produced related competitive advantages. The barrier to entry continues to decrease every year, and businesses are taking notice. In fact, experts estimate that the IOT will incorporate about 30 billion objects by 2020.  

According to the APICS Dictionary, IOT is “an environment in which objects, animals or people are provided with unique identifiers and the ability to transfer data over a network without requiring human-to-human or human-to-computer interaction. This allows objects to be sensed and controlled remotely across existing network infrastructure, creating opportunities for more direct integration between the physical world and computer-based systems.”

Tapping in

The first step to maximizing the opportunities associated with the IOT is to decide what kinds of data you want to capture and use. IOT’s reach is essentially endless. If you offer any kind of goods or services to customers, then information on demand signals, supply disruptions, quality concerns, customer complaints and countless other key indicators are out there and can provide better decision support.

The next task is understanding your particular data pipeline and determining how to collect the most valuable information. To do this, first identify the point at which the data is needed in order to effectively index and analyze it. Also, consider how will it be stored throughout the entire ecosystem of your supply chain, as well as how the devices collecting data now and in the future will connect and enable platforms to receive and manage the data.

Then, the question becomes how you will manage your data warehouse so that it doesn’t turn into a data lake just sitting stagnant. Determine if you have the right tools to access the data and extract those key business support decisions. Also, it’s important to provide a line of sight for business managers and enable them to access the data they need without too heavily relying on information technology resources.

The risk is enormous with the IOT, so this is another key issue to address. Again, the IOT’s reach is vast, and the potential threats are equally so. Most notably, there is added vulnerability because of enterprise risks associated with the interconnectivity of devices across the supply chain. Connected devices are a gateway for hackers to bypass firewalls and get into your networks. For example, say you purchase a piece of equipment from a supplier that is connected to your internal network in order to provide quality and performance data to your enterprise resources planning system. This could turn into a Trojan horse, giving the bad guys access.

Another big challenge is that most companies can’t quantify how much data they have inside or outside their networks — whether it’s data on energy usage, production, quality, GPS locations, vibration, temperature and much more. With data feeds from so many different technologies integrated with one another, the potential liability is astronomical.

Defining what matters

To make the most of the IOT while mitigating potential risk, it’s first essential to gain a clear picture of what IOT capabilities are important to your company strategy and why. To do so, consider using quality function deployment and Pareto analysis. Then, conduct a thorough risk analysis. Time is short, and change is constant. You’ll need to choose your IOT battles carefully.

 

Ron Crabtree, CIRM, SCOR-P, MLSSBB, is chief executive officer of MetaOps, a master MetaExpert and an organizational transformation architect. He is the author or coauthor of five books about operational excellence and the online magazine at MetaOpsMagazine.com. Crabtree also teaches, presents and consults. He may be contacted at rcrabtree@metaops.com.

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