Lost in the Internet of Things

If you turn your hype detector to “high” right now, you’ll find the Internet of Things (IoT) -- a rapidly approaching world where almost everything around us (home appliances, factory equipment, shipping containers, store shelves, air conditioners, cars, buildings…) will have sensors in them, collecting all sorts of data, and these “smart” things will talk to one another via wireless networks to automate processes, like factory equipment ordering spare parts before they fail, store shelves texting employees to restock them, and your smartphone ordering your favorite latte when you’re a block away from the coffee shop.

In Welcome to the Programmable World (Wired, June 2013), Bill Wasik writes:

In our houses, cars, and factories, we’re surrounded by tiny, intelligent devices that capture data about how we live and what we do. Now they are beginning to talk to one another. Soon we’ll be able to choreograph them to respond to our needs, solve our problems, even save our lives.

And everywhere we go, “It’s a Wonderful World” will be playing.

At the Consumer Electronics Show last month, Cisco’s CEO John Chambers predicted that the Internet of Things will be a $19 trillion market in the years ahead. The company even created a Internet of Things division last October to go after this opportunity. General Electric, Qualcomm, Google (see recent $3.2 billion acquisition on Nest), and many other technology companies are looking for their piece of the pie too. And every day, there’s a new analyst report, consultant study, or article published about this brave new world (yes, including this blog post).

In many ways, the Internet of Things is not new. More than a decade ago, for example, there was plenty of hype about item-level RFID tags and smart ocean containers revolutionizing supply chain management. It never really happened, at least not to the scale envisioned. But things are arguably different today. The technologies behind the IoT are smaller, cheaper, and more powerful than ever before -- and getting more so every day. And unlike a decade ago, we’re all walking around with wireless computing devices in our pockets, making us another smart "thing" on the network.

Yes, the Internet of Things is great, and it holds huge potential for supply chain management, and so I’ll drink the Kool-Aid with everybody else. But in the process, let’s not get lost and ignore the Internet of People -- our family members and friends, co-workers, suppliers, customers, and others that we interact with in our daily lives. People communicating and collaborating with other people -- it’s a much more interesting and vital interaction to society and business than two devices talking to each other.

Face-to-face communication and collaboration is often the best approach to solve problems and generate new ideas, but it’s not always possible or practicable, and that’s where technology comes in. We can communicate via telephone, send an email or text, conduct a video conference...and where I see the greatest potential moving forward, we can also use social networking technology, not only at home, but at work too.

According to a McKinsey & Company report from July 2012, “[social networking technologies], which create value by improving productivity across the value chain, could potentially contribute $900 billion to $1.3 trillion in annual value across [consumer packaged goods, retail financial services, advanced manufacturing, and professional services]…Two-thirds of this potential value lies in improving collaboration and communication within and across enterprises.”

In a 2011 webcast, Tony Martins, at the time the VP of Supply Chain at TEVA Canada, discussed how his company reduced manufacturing cycle time by 40 percent in four months and improved lead time from upstream suppliers by as much as 60 percent by using social networking technology and processes. But here’s my favorite quote from Tony’s comments:

What is needed [in a dynamic business environment] is a supply chain of rapid response…Many people who work in the materials business [and] talk about supply chains and the speed of supply chains [have historically] thought about systems talking to systems across enterprises and about processes. But in reality, the speed of the chain is not really related to the systems used by the various companies—it’s all about people, and people talking to people.

And yet it seems to me that in the battle for dollars, companies are far more willing to invest in “things talking to other things” than in helping people communicate and collaborate more effectively and efficiently with each other.

I’m not sure what this means. Maybe I’m overreacting. Or maybe I need another glass of Kool-Aid, another listen to Louis Armstrong’s soothing voice.

(For related commentary, see The Perfect Answer to “What’s the ROI of Social Networking?” and A Pulse on Social Networking for Supply Chain Management)

Photo source: Fellowship of the Rich, Flikr