Companies across the global supply chain expect the Industrial Internet of Things (IIoT) to increase their yearly revenues by 10% within five years, a global study by mobile satellite communications company Inmarsat, released on Tuesday, showed.
IIoT is the application of networked sensors, which provide data and transparency across the global production and supply chain.
Global production and supply chains are increasing in complexity. They involve multiple industries, each with their own business models and processes, and encompass multiple jurisdictions and regulatory authorities, the report stated.
Data generated by IIoT infrastructure is expected to bring greater transparency to the global supply chain, allowing businesses to automate processes, reduce operational waste and speed up the rate of production, leading to higher revenues and lower costs, says Inmarsat Enterprise president Paul Gudonis.
“IIoT is set to play a profound role, providing end-to-end transparency across supply chains and improving their efficiency. We are reaching a point where all events in a supply chain will be captured as data by nerve-like sensors, before being routed for analysis and actioned.”
This transparency will dramatically alter the pull-push strategies of supply chain businesses. Most currently work to balance the pull of demand-led production against the push factor from manufacturers delivering products to market based on previous demand.
IIoT will allow for increasingly refined decisions, basing production on more accurate analysis of the market and its current need.
Companies that are able to use data to improve their own operations and to create a seamless partnership with all the other organisations in their supply chain have the opportunity to gain a significant competitive advantage. Those who are not moving to adopt this technology risk falling out of the supply chain altogether, the report stated.
For manufacturers, IIoT allows the volumes of material to be more finely calibrated to meet ever fluctuating demand. It can also be used to keep a close eye on sub-par suppliers and help organisations improve the productivity of their supply chain relationships.
With so many uses, data produced from sensors needs to be handled in different ways. It can be processed on the edge (adjacent to where the data is produced), or collated more centrally in the cloud, depending on its intended function, the company said.
Communication networks allow for data to be seen in real-time across the supply chain, and to influence faster decision-making to ensure optimum outcomes. The combination of satellite with Low Power Wide Area Networks, radio-frequency identification and other wireless data collection technologies is allowing the collation of more data points than ever before, anywhere on the planet.
However, commercial confidentiality, security and a view that any external organisation could be a competitor, results in a natural inclination not to share data, which must be overcome.
More than one in five businesses surveyed report full adoption of IIoT and a further one in four report that they were in the trial stages of IIoT deployment.
“It is clear that the technology is a major focus for businesses across the global supply chain,” the report noted.
The most significant driver for IIoT adoption is to enable organisations to create leaner business models and operate with greater sustainability and less impact on the environment, as well as improving working conditions for staff.
“However, adoption levels are inconsistent across the sectors surveyed, with energy and mining showing much lower levels of adoption than the transport and maritime sectors. Supply chains must be connected from end-to-end to operate with maximum efficiency, and if certain areas are not gathering the necessary data to identify these efficiencies, businesses will struggle to use IIoT to its maximum potential.”
The skills gap has emerged as one of the key barriers to successful IIoT deployment. A lack of in-house skills was cited as the top barrier to IIoT deployment, higher than other issues such as cybersecurity risks and high costs.
Many businesses are struggling with security, skills and connectivity challenges in large-scale IIoT deployments. Over half (56%) require additional cybersecurity skills and 34% do not yet have access to the connectivity they need.
The organisations surveyed reported requiring additional staff with expertise in security, data science and analytics and technical support, as well as staff to drive the strategic development, management and deployment of IIoT.
“Without these skills in place, organisations will struggle to make best use of the data they gather, which will ultimately hinder the transformative role that IIoT can play in the global supply chain, limiting the flow of data across multiple businesses and industries.”
To plug these skills gaps and ensure successful IIoT deployments, organisations must look to external partners with the specialist skills and expertise to provide the core competencies necessary for IIoT, the Inmarsat report advised.
New people with new skills and new ways of thinking are needed to apply themselves to finding new ways of running the supply chain. Not only will they need to be thinking about their own operations, but they must also consider how they will integrate with others in the supply chain to ensure evermore seamless ways of working, it stated.
“A supply chain is only as good as its weakest link, and without all parts playing their role, sharing data, it will operate inefficiently. Our research shows where IIoT can improve the supply chain and satellite connectivity supports this,” the report read.
The 2018 edition of Inmarsat’s research programme into IIoT trends ‘IIoT on Land and at Sea’, conducted by technology market research specialist Vanson Bourne, surveyed 750 businesses with a combined turnover of $1.16-trillion from a range of industries, including the agriculture, energy, maritime, mining and transport sectors.