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Planning the Internet of Things’ Supply Chain

Sensor-filled wristbands feeding personal tracking and health data up to the cloud. Smartphone-connected toothbrushes. Bluetooth-enabled scales. Lighting systems controlled with apps on tablets. Garbage containers that relay messages to city planners who can optimize trash collection services. Cars that talk to other cars and sense ways to avoid accidents.

The face of mobile devices and machine-to-machine connectivity is changing the Internet of Things (IoT), and IoT is winning a lot of attention from the tech sector and adoration from Wall Street, investors, and venture capitalists.

In fact, the market is growing hand over fist. Global machine-to-machine (M2M) connections are expected to hit a quarter of a billion this year, according to a recent report by the GSMA. In 2013 that number reached 195 million M2M, showing a growth curve of nearly 40% per year between 2010 and 2013. Estimates from various sources for the number of IoT-enabled devices coming to market by 2020 reach well into the billions — double-digit billions, like 20 billion to 50 billion.

“We are now living in a world where every device, machine or appliance can be wirelessly connected to the Internet, providing a wealth of real-time information that can transform how people live and work,” said Hyunmi Yang, GSMA's chief strategy officer, in a statement.

The buzz is bubbling up, and it's time for supply chain professionals to start paying attention. The days of avoiding the IoT (remember when it used to be called embedded computing?) are gone. If consumer brands like Oral-B can get into the space with smart electric toothbrushes that interface with mobile apps, then who knows what other kinds of devices will be coming to market demanding new hardware form factors; a wide range of component parts; and high levels of software, hardware, and cloud integration.

It's not difficult to imagine, for instance, how chipsets, sensors, or other parts may have to be redesigned to work on a range of devices that are not natively or inherently digital. Appliances like air conditioners, heating units, water coolers, and coffee makers (and toothbrushes!) come to mind.

Batteries, too, will also need a makeover, or more likely, a complete overhaul. How will that nifty Bluetooth-connected wristband tracking exercise, sleep, and diet patterns become an embedded part of a person's daily routine if it quickly saps power from the mobile phone and has to be recharged every couple of days?

Of course, data-fusion capabilities are also going to be needed to collect, sort, and make sense of the heaps of information that will be routed through these devices.

That's just the beginning. The supply chain side comes with its own set of risks, benefits, and sourcing implications.

Like, if you're an OEM entering this promising new field of IoT, how are you going to secure supply? And if you're a component maker, how can you serve the needs of a company like Procter & Gamble or other OEMs that don't have long ties to the electronics industry?

And, the headache of developing a purchasing forecast based on possible demand. Uff! That will be hard! No one knows how big this space will be, how many different players there will be, or how quickly consumers will latch onto these devices and related services. It's a nascent market that could soar or flop or reach only mediocre adoption levels.

IoT could be another supply chain planning wrench that turns the industry upside down. Or it could be a boon for people thinking ahead. What do you have in your supply chain toolbox that will help you make the best of this next big thing?

40 comments on “Planning the Internet of Things’ Supply Chain

  1. t.alex
    March 14, 2014

    When we need to put wifi or bluetooth chipsets into daily products, it's gonna affect PCB estates, such as more space required and even more space required for stronger processor or batteries. The challenge is to have even smaller form factors of these tiny chipsets so IoT can be scaled larger and larger.

  2. Susan Fourtané
    March 14, 2014

    It's impossible to ignore the IoT. I like the new Oral-B that is going to be available on the market in June. It has a mobile app and you can customize your oral care. Watch to see all what this toothbrush can do: 😀 

    -Susan 

    {youtubenew|/embed/lRvYQXruyKk|315|560}

  3. Wale Bakare
    March 14, 2014

    >>can you serve the needs of a company like Procter & Gamble or other OEMs that don't have long ties to the electronics industry?< <

    This is just showing how the breadth and width of supply chain would expand in years to come. It's a real and huge opportunity in the space.

  4. prabhakar_deosthali
    March 15, 2014

    For IOT to become the mainstream business paradigm, a whole new ecosystem needs to get evolved which will have new players .  For the existing players it may be risky to disrupt the existing business to cater to the IOT related business opportunities.

    For existing supply chain players , it should be cautious wait and watch to see how the things are evolving and decide at what stage to have a go at IOT related business.

  5. Susan Fourtané
    March 16, 2014

    Prabhakar, 

    Why do you think it may be risky for existing businesses to cater for the IoT business?

    Waiting would mean losing business pportunities in a market that is growing as we speak. Everything is going to be about the IoT in just a few years' tiime, and not many years. 

    -Susan

  6. t.alex
    March 16, 2014

    Susan, do you know much this would cost?

  7. Susan Fourtané
    March 16, 2014

    t.alex, 

    The device will be at top end the Oral-B electric toothbrush range, with a recommended retail price of £199 ($330) in Britain and 219€ in Europe.

    The price is an estimate, and I expect it to be less when the smart toothbrush is launched at the beginning of June, because there is a French startup that has developed a similar toothbrish and they are lunching theirs in the third quarter.

    The French toothbrush would be the only competence the Oral-B toothbrush would have on the market at the beginning. 

    Here is an article with more information: http://www.reuters.com/article/2014/02/20/us-mobile-world-toothbrush-idUSBREA1J0ON20140220  

    -Susan

  8. prabhakar_deosthali
    March 17, 2014

    Susan,

    In my opinion, IOT is something too new for the existing businesses to disrupt thier established  domains in the supply chain context.

    IOt may take a few years to bloom to be a viable business .

    As you have shown the cost of a Toothbrush – the IOT related stuff will be expensive to begin with !

  9. Susan Fourtané
    March 17, 2014

    Prabhakar, 

    The IoT is not a new thing. I remeber having had discussions on the IoT already in 2009. So, at least this has been cooking for five, or six years.

    It's the same case as 3D printing. Last year some people said it was a new thing, when it has been around for many years, but it was not until recently that 3D printing started to get more attention.

    Now the IoT started to get more attention despite not being something new. There are several IoT around already, even cars communicating with smartphones. 

    About the price of the toothbrush, we can't really know until the device is launched in June. This is the same case as Google Glass. All the fuss about the $1,500 ended up in being $600. Before launching a product the companies always throw a price to evaluate customer's reactions.

    I am pretty sure the price I posted below will not be the price of the toothbrush in June, when it comes to the market for the first time, but lower. 

    -Susan

  10. docdivakar
    March 18, 2014

    The supply chain side of IoT ecosystem already has had a head start from RFID tags which as popularized by Walmart supply chain folks more than a decade ago. When it comes to IoT, I think it is more a scaling problem than basic innovations to deal with huge volumes. To that end, I would argue that the RFID supply chain is already dealing with hundreds of millions of product sales that can be scaled to billions in volume.

    MP Divakar

  11. Eldredge
    March 18, 2014

    @Susan – Are there competing communication protocols for IoT, or is that already well established/standardized?

  12. Susan Fourtané
    March 19, 2014

    Eldredge, 

    No, there are still many questions around the IoT world. Manufacturers have to build standard communication protocols into everyday objects.

    Some manufacturers are using proprietary protocols. The IoT generate a vast amount of data.T hose manufacturers are keeping the data collected by the objects on private servers.

    Of course, what at some point will happen is that business models will be created and offered to manufacturers in order to make sharing data more appealing. But this is just a matter of a time. 

    -Susan

  13. Hailey Lynne McKeefry
    March 20, 2014

    Thanks for the video, Susan. This points to a number of trends:

    1) There's an app for that. I'll never be able to put my phone down–it's going to connect me to everything in my life.

    2) Gamification is here to stay. People just plain old like getting buttons or awards for acheivement. I'm not sure how I feel about my Dentist wanting to check out my report card though.

    This is going to change the nature of hardware design. Every design team will have to work closely with an app team as well. I wonder how that will go over?

  14. Hailey Lynne McKeefry
    March 20, 2014

    @Prabhakar, there is a big cost associated with it, but there's a huge potential upside on being a leader in the market. I'm willing to bet that many OEMs will want to take a shot at winning this particular race.

  15. docdivakar
    March 21, 2014

    @Hailey: whether consumers in general realize this or not, they have already been 'paying' for the cost of adding electronic tracking as far as supply chain is concerned. As I commented separately, RFID tags have proliferated in many western markets. When it comes to the supply chain topic of I-o-T, some nuances / innovations can be applied to combine the function of RFID tags into some layer of I-o-T. As long as privacy and security are addressed, this may not be a bad thing!

    MP Divakar

  16. Hailey Lynne McKeefry
    March 24, 2014

    @Docdivakar, I agree that the consumer is already paying for electronic tracking, and that's fair enough (just take a look the increasing prices of these elctronic toothbrushes we mentioned here). The privacy and security caveat is critically imporant…and i suspect that we'll make some mistakes before we get it right.

  17. Susan Fourtané
    March 24, 2014

    Hailey, 

    This toothbrush is ideal for children. They can get fun with the app and get healthy teeth and gums at the same time. Your dentist checking out your report card is not different from your dentist knowing if you have done your brushing right, or wrong in your visits. 😀

    I even thought of sending the video to my dentist. Maybe she can recommend the toothbrush to some people who would benefit from it, and especially to kids and teens. 

    -Susan

  18. jbond
    March 24, 2014

    Susan – I was thinking the same thing. This would be great for kids, especially since they get so excited to hear good news and want to brush more. I am not so sure about adults but the kid aspect is great.

  19. Susan Fourtané
    March 24, 2014

    jbond, 

    Yay! 😀 Happy to see I am not the only one having these thoughts. It can be invaluable in their future. Having healthy teeth and gums is so important for the general health. 

    I am planning to check it out in June when it comes out. Below we were discussing price, but I tell you, keeping healthy teeth and gums can save you lots of money in dental treatments. And they are not any cheap. Plus, like any other device, the price will come down quite fast. 

    -Susan 

  20. Hailey Lynne McKeefry
    March 25, 2014

    @Susan, i think young people would be into this. It would be even better if it included music. My daughter had a “singing toothbrush” that played a song while she was brushing (the toothbrush being against the teeth made the music go). The downside was that it was always the same song… i could see having many songs over time and as taste change would be great.

  21. Susan Fourtané
    March 25, 2014

    Hailey, 

    What a fantastic idea! 😀 Your daughter's singing toothbrush sounds super nice. 

    Yes, like a mini-playing list. It would be nice. What was that toothbrush? 

    -Susan

  22. Hailey Lynne McKeefry
    March 25, 2014

    Here's a sample of it: http://www.brushbuddies.com/jb-singing-toothbrush-category.html

     

    I think there's room here for a collaboration between Apple i Tunes and a smart toothbrush maker… maybe a wireless connection to the playlist or something.

  23. Eldredge
    March 25, 2014

    @Hailey – Was it programmed to play for a recommended brushing duration? I could see a lot of applications for something like that….maybe including a hand soap dispenser that played something appropriate when activated, to encourage washing hands thoroughly.

  24. Hailey Lynne McKeefry
    March 25, 2014

    @Eldredge…yup, exactly, it played for two minutes.

  25. jbond
    March 27, 2014

    I think the music is a great idea also. My kids had the signing toothbrushes also. Having the app with the music will keep kids engaged and excited about brushing. I think this will take off, especially after a few months when the price comes down.

  26. Jennifer Baljko
    March 28, 2014

    @Susan – Totally agree with you. IoT is not new conceptually, it's just the new “thing” getting lots of  attention.  As you and some other readers point out, the groundwork was laid years ago when the electronics industry began talking about embedded systems, RFID, M2M, etc. And, science fiction stories and TV programs from decades (remember the Jetsons) foreshadowed this concept of hyper-interconnectivity. The point now is that the mobile networking and machine technology infrastructures are sophisticated enough to handle this level of connectivity. But, more importantly, consumers are ready for this type of computing interaction and coming to expect it. That's the tipping point.

     

  27. Jennifer Baljko
    March 28, 2014

    @hailey, @susan @jbond – Agree this could be fun with kids and like the idea of playing music while you brush. And, the interaction with dentists is key for adults, too. It will help track patterns and give healthcare professionals reasons to provide more customized care. 

    By the way, since this came up in one of the comments, it looks from this Guardian article that “new brush will be available in Spring in Germany and the rest of the world in June priced at about £199.”

    Interestingly, too, Oral-B demoed its new smart toothbrush at Mobile World Congress in the connected bathroom  (which was part of the connected cities exhibition). There was a digitally-interactive mirror that will feed up news stories, calendar reminder and what have you.

    Here's a tweet about it:

    The #connected bathroom of the future will provide a feed forward loop to help improve your health #OralbMobile pic.twitter.com/B2yG4WFqpn

  28. Hailey Lynne McKeefry
    March 28, 2014

    @Jennifer, i agree with what you've said. I'll add to that that electornics designers will also need to shift thier focus. I'm going to the EE Live show next week and half the vendors their want to talk to me about the IoT. There's a huge amount of confusion around designing for this market–because of the variety of data types, inputs, etc. At the same time, the electroncis vendors are working toward tools to ease that burden.

  29. Hailey Lynne McKeefry
    March 28, 2014

    Cisco has predicted that by 2020 50 billion connected devices is a real possibility. That's mind boggling. Does that seem high to you? Low? Reasonable?

  30. Hailey Lynne McKeefry
    March 28, 2014

    @Jennifer, that bathroom of the future is way better than the sticky notes, radio, and magazines that litter my bathroom counter. Sign me up!

     

  31. Hailey Lynne McKeefry
    March 28, 2014

    @Jennifer, that bathroom of the future is way better than the sticky notes, radio, and magazines that litter my bathroom counter. Sign me up!

     

  32. Susan Fourtané
    April 1, 2014

    Hailey, 

    Thanks for the link. (singing toothbrush)This is what a call a useful marketing campaign. Two two-minute songs seems to be quite good.

    Maybe after a couple of days of listening to the same over and over they get bored and don't play the songs any more? But you said it activates when they press on the teeth, right? 

    Yes, I agree there is a room for improving this. Maybe it also depends on how successful the singing toothbrush was? I would like to have one with classical music. 😀 

    -Susan

  33. Susan Fourtané
    April 1, 2014

    jbond, 

    I was asking Hailey if kids would get bored of listening over and over to the same two songs after a few days. How did it work with your kids? 

    -Susan 

  34. Susan Fourtané
    April 1, 2014

    Jennifer, 

    The Jetsons! 😀 How to forget. I believe as a general rule the ones who are involved in technology, in one way or another, today have always been sort of addicted to sci-fi shows, movies, and cartoons.

    -Susan

  35. Jennifer Baljko
    April 1, 2014

    @Hailey – I've heard several different numbers predicting the number of connected devices in the next few decades. As with all predictions in young markets, it's hard to say what's reasonable, lofty or conservative. I think it all hinges on the speed of end-user adoption, and not just in the US, Europe or Japan. While these tech-mature geographies will probably be the first to adopt smart city, smart home, wearables and connected bathroom ideas, I think we're going to see lots of individual and community  problem-solving M2M or IoT concepts come out emerging and developing markets. I think we'll see in these places how mobile technology, IoT and machine-to-machine communication can help with things like rural development, remote health monitoring or social outreach…. assuming of course the telecom operators can lay these last miles of fiber-optics and get these inland regions hooked to the internet.

  36. Hailey Lynne McKeefry
    April 1, 2014

    @Susan, the novelty didn't wear off… especially because they were on the littler side (seven or eight). At that age, repetition is everything. For older kids, though, having a bunch of different songs would be cool since tastes start to change quickly.

  37. Hailey Lynne McKeefry
    April 1, 2014

    @Jennifer and Susan, this is totally off topic but i had a golden retriever named Arden and he wsa totally mesmerized by the Jetsons theme song. He would run from another room if he heard it and sit in front of the television. Mabye we need to do an electronic doggie toothbrush that plays the Jetsons theme song. 🙂 How's that for bringing it all around to the original topic!

  38. Hailey Lynne McKeefry
    April 1, 2014

    @Jennifer, only time will tell. At the same time, it's fun to watch the predications. At EE Live today, during one panel, Cisco said Internet of Things a $17 TRILLION market opportunity. Again, an astonishing figure.

  39. Hailey Lynne McKeefry
    April 1, 2014

    @Jennifer, adoption rates will be one telling element. The other will be the development and availability of design short cuts. These products demand a diverse set of knowledge to develop and without the proper expertise product introductions will be much slower.

  40. Susan Fourtané
    April 3, 2014

    Hailey, 

    This means something similar has already been tested and it worked well. 🙂 All the companies making products for kids and teens might want to explore the IoT closely. 

    -Susan 

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