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Internet of Things: A real-world example

By Susan Lacefield | May 28, 2015 | 8:19 AM

It seems that you can’t step outside without tripping over yet another study proclaiming that the Internet of Things is upon us and everything will change.

And while it's fun to think about smart washing machines and pantry shelves that reorder garbage bags for before we run out, the pundits assure us that the biggest transformations will be seen in the business realm. According to Deloitte Consulting’s The Internet of Things really is things, not people, 60 percent of all wireless IoT devices will be bought for and used by enterprises and industries.

But data on how companies are actually using the Internet of Things is harder to suss out.

So it was refreshing when John Kern, senior vice president of supply chain operations for Cisco, offered up a couple of examples of how his company was experimenting with the Internet of Things at the recent Gartner Supply Chain Executive Summit 2015.

One area where Kern believes it can create breakthroughs is in energy management.

“We don't manage the cost of energy. There’s no way to drive down those costs,” says Kern. “But we do have access to a massive amount of data.”

At one of its plants, Cisco is experimenting with capturing data on energy consumption. Every machine at the plant has technology attached to it that records energy consumption. The company then runs analytics to determine how they can run those machines so they consume less energy. Kern estimates that this analysis could help Cisco reduce its energy consumption by 20 to 30 percent at every one of its factories around the world.

But this is not where the biggest breakthrough lies, says Kern. He imagines a day when Cisco will take that information and use it to inform when the company manufactures. Will it be during peak hours or at night? This will help the company optimize its manufacturing schedule around cost.

It’s easy to think about how this model could also be used in a distribution operation or a transportation operation to figure out when to make deliveries so that it takes less time and less fuel. 

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