The potential of the Internet of Things (IoT) as a component-sales driver can’t be understated. Semiconductor manufacturers are working on devices with security featured embedded in silicon to address IoT privacy concerns. Discrete sensors are turning into hybrid devices and new applications such as fingerprint identification are being perfected. Now, cloud-based supply chain solutions such as those offered by E2open are poised to manage the reams of data that will be streaming from billions of IoT devices by 2020.
“Originally E2open was a b2b trading company dealing with finished goods, but we have since focused on applications that automate the business process—planning, execution, response and decision-making—and the analytics of data,” said Geoffrey Annesley, E2open’s GM, Semiconductor. “We have a cloud-based network to enable those business processes -- that is our value-proposition -- and as we move forward we see more our customers collecting and analyzing data and moving it back and forth. We have evolved a lot of applications on top of [automated processes] and have improved our capabilities regarding the reduction of time to deploy and the reduction of costs.”
E2open's cloud-based platform, E2open Business Network, allows supply-chain partners to view and manage procurement events in real-time. The system, among other things, enables users to "monetize" the various aspects of a buying transaction. It captures and compares component costs; assesses various logistics scenarios, and calculates risks such as manufacturing line downtime. E2open said its products are not just about providing data; they provide the ability to interpret and react to data. So the reams of data streaming from interconnected devices are a natural opportunity for solutions providers.
Based on market estimates, the amount of data to be collected from the IoT looks nearly incomprehensible. But Annesley said it’s not that different from business as usual. “We already have examples of this type of data that we collect in manufacturing. In semiconductors, for example, E2open collects test and performance data from every device that comes off the production line.” Storing and managing that data in the cloud, he explained, reduces set up costs and ramp-up time for partners that want to share information. This, in turn reduces customer costs. Custom solutions such as EDI are expensive, time consuming and use different data-collection protocols. “By standardizing data collection, costs are further reduced,” Annesley said.
How IoT data can be used
Although pure data collection is helpful for many organizations, adding context to data helps users make more informed decisions, Annesley said. “Let’s say a company is collecting temperature information. If that information is applied to something like produce items in transit, vendors can tell whether their products are likely to spoil or not. If they do, vendors can discover where the event took place and whether a partner such as a 3pl vendor should reimburse the vendor for the spoiled goods.”
So what does that mean for the IoT? In industries such as electronics, vendors that collect and analyze data can then turn it around to provide services for their customers. “Equipment makers will be able to tell if a machine is ready for service or maintenance,” said Annesley. “That enables vendors to get into the services business which carries higher margins than pure manufacturing.”
As the IoT continues to invade the home, service providers such as cable companies are entering the IoT service realm. Comcast/Xfinity, for example, provides security monitoring services for its customers. Annesley said E2open doesn't see cable companies as competitors but as potential customers. Such companies could use E2open’s network to take incoming data, analyze it, and then communicate information such as service usage or prices to their customers. “We primarily see service companies as complementary to our network,” Annesley said. “We don’t see them as competitors.”
At the same time, the more data that companies share the more likelihood there is for security breaches and hacking. Since E2open began as a trading platform among high-tech companies, security has always been a primary concern of the system. This feature will be beneficial in the IoT. “All of our customers ask us about security,” Annesley said. “We’ve put security into our hardware and in the cloud. Our customers’ information has always been sensitive—they use it for shipping, quantities, return rates—so we’ve been as concerned with security as they are.”
High tech was an early adopter of platforms such as E2open. PC manufacturer Lenovo Group Ltd. uses the E2open system. Lenovo set out to reduce the cost and time to onboard new trading partners and to build a real-time, consolidated view of processes and operations. Lenovo reduced onboarding time by 85 percent, lowered IT costs by 53 percent, and reduced IT management costs associated with supplier integration by 70 percent, it reported in 2012.
Cisco Systems Inc. has also implemented the E2open platform and in 2012 estimated it had linked its systems electronically to more than 100 key suppliers and partners. “We see IoT opportunities coming across all kinds of different verticals,” Annesley said. “We’ve become experts at putting things such as finance, operations and engineering [processes] on a single platform and that adds value to user relationships. The IoT really fits in to our cloud strategy and what we have been building over the years.”