Is your supply chain management set-up ready to respond to the IoT disruptions to come?

April 28, 2014

Machine to machine data flow (M2M), once called embedded computing and now ‘the internet of things’ (IoT) is gaining ever larger shares of the market.

Does your supply chain strategy take the possibility of the disruptive market shifts this could bring in the near future into account?

I’m an old fuddy-duddy, and I admit it. The idea of a toothbrush that connects to a smart phone app seems downright silly to me. The idea of fishing out my phone or a tablet to dim the lights in my home seems like a lot more trouble that walking over and fiddling with the dimmer switch. But regardless of how I reject the consumer end of this revolution, I would be a fool to ignore how it is set to change the transport and logistics sector.

As the IoT idea draws more investment and big name support, practical, useful examples of the technology are already on the market and will soon become almost ubiquitous. Global M”M connections are supposed to pass the quarter-billion mark this year, up from 195 million last year. Estimates for 2020 are between 20 and 50 billion M2m connections, but they are mostly guesswork. (Remember when dates like 2020 were by-words for ‘the far future? Now it’s just 6 years.)

As the floodgates of investment money open, new manufacturers will enter the IoT market, and each will need to shoulder their way into an already highly subscribed component and materials market. Securing a supply chain will be vital to every one of them, and may make or break most of these start-ups before they even consider turning a profit.

How do you make a purchasing forecast when demand is nearly impossible to calculate?

All many start-ups know is that the demand will be there, and if they don’t serve it, someone else surely will.

Many of these tech firms will beturning to dedicated third party logistics partners to handle these supply chain worries. An established logistics partner can offer the experience and reliability that a fledgling company needs in order to focus on actually making their innovative devices and bringing them to market. They can also provide these services at a substantially better price than can be achieved in-house on a small scale, so could be the factor that makes one company go on to greatness while another on (or ten) fail to thrive.

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