IoT is a big buzzword these days. From industry experts to academia to specialized thought leaders, everyone is talking about how IoT as a technology has the potential to disrupt day-to-day workings not only of organizations, but also the lives of the individual.
The Internet of Things: A History
Let’s go back a bit and see how it all began. In 1999, Kevin Ashton, a British technology pioneer and co founder of the Auto-ID Center at MIT, proposed the Internet of Things (IoT). It refers to gadgets and applications with built-in wireless connectivity that can harness great amounts of data from their surroundings and help monitor, control and organize things better. From home appliances to fitness gadgets to technology helping industries automate their processes, IoT could do it all!
And two decades later, IoT is the live wire. Smart homes, smart gadgets and smart cars- IoT has already given us a glimpse how is future going to be. But what does it hold for procurement?
Procurement and the Internet of Things
For Procurement particularly, IoT works as an enabler, empowering companies to gain visibility into their spend analysis and keep a vigilant eye on their consumers consumption pattern. The supply chain data generated is monitored continuously and analyzed for behavioral sets to make better-informed decisions. Having a proactive overview helps companies to estimate the demand and supply statistics, as they are aware of the needs and usage pattern of their consumers. This empowers them to negotiate with supplier side in a more streamlined manner as they know in advance what material and what quality and quantity is required. All these factors combined contributes to cost savings and brings value for the procurement function.
Another area where Procurement can benefit significantly is in the tracking and monitoring of the movement of goods within supply chains. Deploying the right set of sensors, which are tracked remotely with an IoT- enabled device can identify equipment faults, stoppages and leakages in real time allowing service and maintenance teams to respond to issues more promptly and accurately. This also ensures diagnostic data is obtained in order to deploy the right set of technicians.
These factors directly impact the maintenance costs incurred by a company, contributing positively to the overall cost savings.
There is more that IoT can bring to the table for Procurement function. But to realize the utmost advantages, companies must ensure that they are investing in the right kind of technologies, processes and people. They need to invest in setting up the infrastructure that will unleash the possibilities IoT has to offer. In short they need to be ‘IoT ready’.
If you are curious to learn more about how IoT will impact procurement, do join our upcoming webinar where our expert group of panelists will examine the practical impact of IoT on how our supply chains will work and what you will need to do to become IoT ready.