Internet of things (IOT) – The OM Blog by Heizer, Render, & Munson

Teaching Tip: Glossary of Supply Chain Terms

The Financial Times (Nov. 22, 2022) has just issued a report called How Technology Can Help Redraw the Supply Chain Map . In it, the newspaper provides this useful glossary of current SCM terms for your students to keep handy.

Internet of things (IoT) The IoT consists of sensors that make goods “smart”. These can both send information and communicate with each other. The IoT is used in the supply chain for tracking and monitoring. (See p. 451 in your Heizer/Render/Munson text).

Blockchain Blockchain is also known as distributed ledger technology. It allows for the digital recording of transactions and tracking assets in a business network. It introduces trust where this is scarce. The verifiability of transactions can help to reduce fraud. (See p. 451 and 591).

Artificial intelligence (AI) and data analytics These involve statistics at a huge scale processed at a blistering speed. They can help with warehousing and inventory, improving sourcing relationships and predicting demand AI and machine learning. (See p. 823-831).

Machine Learning (ML) is a facet of AI that applies an algorithm to data. It then taps into previous experience and then accomplishes tasks without human involvement. The algorithms can, for instance, make predictions, form personalized recommendations and recognize images in photos. Examples of ML with which you may be familiar include TikTok recommendations, photo portrait recognition and sentence completion.

Robots and automation This covers the physical side of distribution centers and includes optimizing storage, moving stock and picking and packing. It is increasingly sophisticated. (See p. 277, 292, 371, 490).

3D printing This involves the creation of three-dimensional objects by a machine that uses a computer model. It applies layers of substrate (plastics, liquids or powders) to create physical goods. It allows for the making and replication of extremely complex shapes that cannot be constructed by hand. (See p. 170).

OM in the News: Overcoming Supply Chain Disruptions With Sensors

Supply chains and logistics have seen massive disruptions as a result of COVID-19, creating new challenges for retail and manufacturing operations worldwide. Material Handling and Logistics (Nov. 12, 2020) identifies how sensors can be used to improve and modernize logistics to shore up global supply chain infrastructures.

There are 4 critical points in the logistics process – point of origin, warehousing, transit, and destination – each with a unique set of challenges that impact the efficiency of supply chains, sometimes even leading to complete breakdowns. Things that go wrong in the logistics process include pilfering, asset misplacement, and physical damage due to improper storage conditions and unexpected events.

These challenges will be exacerbated as vaccines become available for COVID-19. Ensuring the right goods are transported in the right quantities, under the right conditions, and delivered to the right place at the right time, will allow society to remain functional to fight the pandemic.

Fortunately, sensors can alert companies to these problems and help them address these issues, sometimes even before they become a problem. IoT sensing solutions are the most promising, as they enhance data visibility and transparency across the entire process and facilitate planning, optimizing, and uncovering other invisible insights.

They can be used to monitor environmental conditions, prevent misplacement, identify damages, avoid accidents, ensure compliance, track location, and reveal real-time conditions. Even without network connections, sensors can still reveal the logistics history of a process, helping to identify events that might have compromised goods. Today, sensing solutions are fragmented, with no standardized solutions available to span the entire logistics journey. Nonetheless, sensors play a critical role in enabling information transparency to facilitate planning, optimization, and risk management in the supply chain.

Classroom discussion questions:

What is IoT and why is it an important OM tool?
What are the complications faced in bringing COVID-19 vaccines to consumers?

OM in the News: Smart Clothes Hope to Revive the U.S. Textile Industry

Preforms, which are heated up to draw out the fibers, which are then woven together to create a functional fabric.

The U.S. Defense Department, MIT, and 50 companies have joined in an ambitious $320 million advanced fabric project to push the American textile industry into the digital age, reports The New York Times (April 1, 2016). Key to the plan is a technical ingredient: embedding a variety of tiny semiconductors and sensors into fabrics that can see, hear, communicate, store energy, or monitor the wearer’s health. These high-tech offerings hope to change the game for the industry.

The project represents a new frontier for the Internet of Things. IOT describes putting sensors and computing in all manner of physical objects — jet engines, power generators, cars, farm equipment and thermostats, among others — to measure and monitor everything from machines in need of repair to traffic patterns.The products of this emerging apparel field are being called “functional fabrics,” “connected fabrics,” “textile devices” and “smart garments.”

As we note in Chapter 1, OM requires contributions from many disciplines. Functional fabrics embodies the material sciences, electrical engineering, software development, human-computer interaction, advanced manufacturing and fashion design. Clothes filled with sensors and chips could give new meaning to the term wearables, now mainly wristbound digital devices like a fitness monitor or an Apple Watch.

Creating jobs, as well as technology, will be a measure of the project’s success or failure. Its goal is to reverse the steady erosion of textile jobs in the United States and generate more than 50,000 jobs in 10 years across a range of industries. “This is about reimagining what a fabric is, and rebirthing textiles into a high-tech industry,” says MIT’s professor leading the project.

Classroom discussion questions:

In what other industries do we see technology creating manufacturing jobs earlier lost to Asia?
Why is the Defense Department leading this effort?

Good OM Reading: GE’s Big Bet on the Industrial Internet

GE has bet big on the Industrial Internet — the convergence of industrial machines, data, and the Internet (also referred to as the Internet of Things) — committing $1 billion to put sensors on gas turbines, jet engines, and other machines; connect them to the cloud; and analyze the resulting flow of data to identify ways to improve machine productivity and reliability.

While many software companies like SAP, Oracle, and Microsoft have been focused on providing technology for the back office, GE is leading the development of a new breed of operational technology (OT) that literally sits on top of industrial machinery. Long known as the technology that controls and monitors machines, OT now goes beyond these functions by connecting machines via the cloud and using data analytics to help predict breakdowns and assess the machines’ overall health. GE executives, writes the MIT Sloan Management Review (Feb. 18, 2016), say they are redefining industrial automation by extracting lessons from the IT revolution and customizing them for rugged heavy-industrial environments. This lengthy MIT case study looks at how the old-line manufacturer is remaking itself into a modern digital business.

GE recently projected its revenue from software products would reach $15 billion by 2020 — 3 times its 2015 bookings. While software sales today are derived largely from traditional measurement and control offerings, GE expects that by 2020, most software revenue will come from its Predix1 software, a cloud-based platform for creating Industrial Internet applications.

GE has long had the ability to collect machine data: Sensors have been riding on GE machines for years. But these pre-Internet of Things (IoT) sensors were used to conduct real-time operational performance monitoring, such as displaying a pressure reading on a machine, not to collect data. Indeed, a technician would often take a reading from a machine to check its performance and then discard the data.

OM in the News: Getting the U.S. Manufacturing Strategy Right

Manufacturing's technological revolution may not add jobs but will drive growth in the broader economy — Manufacturing’s technological revolution may not add jobs but will drive growth in the broader economy

For years, Washington has made increasing manufacturing employment a priority, hoping to engineer a return to the time when high-school graduates could use factory jobs as a route to the middle class. “Sadly, that isn’t going to happen,” writes the Brooking Institution’s Martin Baily, in The Wall Street Journal (June 3, 2015). Of the 5.7 million manufacturing jobs that disappeared in the 2000s, only 870,000 have returned and the claim that millions more are coming back is a myth.

But manufacturing will be crucial to the U.S. economy in the future not for its ability to create jobs but for its potential to drive innovation and productivity growth, and for its role in international trade and competitiveness. That means if the U.S. is serious about promoting a recovery in manufacturing, it will stop measuring success by the number of people employed in the sector and start supporting the technological advancements that are making factories more productive, competitive and innovative. This technological revolution may result in fewer factory jobs for low-skilled workers, but it promises to benefit society by driving growth not only in manufacturing but in the broader U.S. economy, as well. Already under way, the shift is being powered by three key technology developments.

The first is the Internet of things, in which embedded sensors transmit information from machine to machine, allowing them to work together and identify maintenance problems before a breakdown occurs. The second is advanced manufacturing, which includes 3-D printing, new materials and the “digital thread,” where companies use very accurate digital models to guide all stages of product development, speeding the time to market and improving quality. Finally, there is distributed innovation, in which crowdsourcing is used to find radical solutions to technical challenges much more quickly and cheaply than with traditional in-house R&D.

Classroom discussion questions:

1. Which is more important–number of jobs or technology?

2. Describe the Internet of things with several examples.