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When the Internet of Things meets the Digital Supply Network 

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How connected systems make supply networks smarter

Currently information from many different sources and locations often drives the physical act of production and distribution. We call these systems Digital Supply Networks (DSNs)

DSNs harness a broad scope of physical and digital technologies such as robotics, additive manufacturing, augmented reality, analytics, artificial intelligence, cognitive technologies, and the Internet of Things (IoT) to create digital enterprises that are both interconnected and capable of more informed decision-making.

IoT is disrupting everything

It is the IoT, however, that truly powers the process—connecting devices, assets, systems, and locations to generate all kinds of information, enabling real- or near-real-time data analysis and “smart” decision-making and informed actions in the physical world. Indeed, the IoT connects the network and provides communication and visibility across the value chain, from inputs to production, from products to customers themselves.

The IoT generates a broad array of value within the context of the Digital Supply Network. To make sense of it all, it can be useful to divide the market into three basic segments: Enterprise/industrial/, Consumer and Services/public sector. Each exists within the context of a broader ecosystem that can sense and measure across the value chain of organizations, people, and infrastructure.

Each of the IoT segments is marked by distinct characteristics and market opportunities, summarized in figure 1 (below).

IoT market structure

Concentrating on industrial applications for IoT in Digital Supply Networks

While all types of the IoT can drive significant value, the Industrial IoT is perhaps the most integral to the DSN. To understand exactly how, it is important to look deeper. Below, we examine a case study for specific IIoT applications.

Digital refinery: Creating the digital mine

A global mining company wanted to lower maintenance costs, increase asset availability, and reduce unplanned outages by identifying and resolving process issues before they could arise. The company typically relied on manual spreadsheet-driven processes for reporting and monitoring. In addition to being resource-heavy, this approach was retrospective, reporting on performance at least two days in the past.

To streamline processes and improve overall visibility and accuracy, the company implemented an asset performance management (APM) system powered by the IIoT. By connecting its critical assets and applications, the organization was able to use this system to draw data on asset performance, monitor remote operations, and review key performance indicators related to the health, safety, and efficiency of its operational assets in real time. Advanced analytics of this data enabled the company to create a holistic picture of the refining process, and to understand, predict, and optimize the performance of its assets on the fly.

Key points to remember:

  • The IoT creates and captures the data, but organizations must be able to harness it. While the IoT can generate data, it is important to remember that sensoring equipment, products, and supply chains are typically not enough. Organizations should have a clear understanding of what they want to know, and build the right technology and talent infrastructure to use the data effectively.
  • DSNs enable organizations to make better-informed decisions. The use of IIoT creates the information that powers those strategies. This can result in significant value for an organization. Illuminating the previously “dark” behaviors, resource flows, and even production data can allow organizations to get smarter about their operations, uncover new opportunities, and drive more efficient processes.

If you wish to discuss this further, please contact:

Kari-Pekka Pitkänen
Management consultant 
kari-pekka.pitkanen@deloitte.fi
+358 (0)46 9233 045

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