IOTA: supply chain as a use case

The full article was originally published by Chris Mueller on Medium. Read the full article here.

IOTA’s advantages over other blockchain/Distributed Ledger Technologies (DLTs) can be summarized as being fast, free and scalable. Besides autonomous driven (electric) cars supply chains are among the use cases which the Iota Foundation is focusing on at the moment; this is why Dominik Schiener, Co-founder of IOTA, will also talk about this in the context of the Bosch Connected World Expo. But what is it after all?

Wikipedia says:

A supply chain is a system of organizations, people, activities, information, and resources involved in moving a product or service from supplier to customer. Supply chain activities involve the transformation of natural resources, raw materials, and components into a finished product that is delivered to the end customer

So what role could IOTA play here? Let’s go through each of the steps involved in the supply chain.

1. Sensor tracking

Even at the very start of the supply chain (i.e. the harvested good), Internet of Things (IoT) will play a major role: RFID and GPS sensors will grant companies access to basically all the data which is necessary for the further processing of the goods: be it origin, destination, transportation time, humidity, pressure — even temperature! All kinds of data can be collected today via sensors and send to interested parties via IoT; the Bosch XDK gives a glimpse about which sensor data can be collected with it (the XDK is a device which can be easily connected to the internet and which tracks the following data from machines etc.):

So let’s keep it short: the raw materials themselves and the way they take during their transports can be monitored in a way like never before!

2. Transportation of goods

Even in a digital age, real raw materials must be transported in order to be processed and in order to reach its real end consumers; thus, transportation will also play a big role in the future. However, the way things are transported wil change in the future.

As described above, the goods themselves will have sensors attached to them, but transportation as part of the supply chain is closely linked to mobility as another major area for which the new technologies can be used. Bosch, for instance, is working on the following entirely new fields of application of IoT:

Of course, the technology will also be applicable to airplanes.

3. Predictive maintenance

Usually, machines are used to process the raw materials. However, the supply chain might encounter problems if machines delay the processing of goods. That’s why companies like Bosch have come up with a solution called predictive maintenance. Essentially, this means that machines are also connected to the IoT:

Source: Bosch (thumb_131092_img_w976_h549.jpg)

So there might be conditions which render a machine as rather prone to failure. A software can identify such a state based on the sensor data and analyzes the potential problem — if the prediction model considers it to be worth an unscheduled maintenance (or at least a check), it will let the respective persons or computers know about the problem before it exists in reality and causes problems to the supply chain. In essence, this is all about maximizing productivity.

Here is a video which shows points 2 and 3 combined:

4. Inventory

I found a very good summary of how a company’s inventory is affected by the new technology:

IoT sensors can provide far more accurate inventories than humans can manage alone. For instance, Amazon is using WiFi robots to scan QR codes on its products to track and triage its orders. Imagine being able to track your inventory — including the supplies you have in stock for future manufacturing — at the click of a button. You’d never miss a deadline again.(click)

This speaks for itself.

5. Retailer

For retailers, all this will not only affect the way they can track the status of a delivery but theoretically they can request a lot more detail as far as the delivered goods are concerned: source of a possible defect/damage during transportation (e.g. bumps in the road), exact origin of the product (and its parts), and much more. For example, look at perishable products:

Maintaining temperature stability is important for perishable products. Fresh vegetables might last a week with no variation of temperature, but not if they warm up for a few hours. According to the Food and Agriculture Organisation of the United Nations, up to one third of food perishes in transit every year. IoT based on connected sensing technology can minimise such wastage. (click)

In a nutshell, supply chains are about to be modified by DLT and sensor data in a very important way: they will be more transparent than ever before (of course, the data must be stored in a tamper-proof fashion) and they will lead to a new level of productivity.

The role of IOTA

Of course, many have recognized this potential (and the supply chain industry was the first industry to do so, according to a survey conducted in 2016 by German Telekom (only German, Austrian and Swiss companies took part in it)).

As mentioned above, IOTA’s technology is not only powerful because it is tamper-proof, quantum resistant and fast, but because there are no fees involved whatsoever. This in turn makes it attractive to companies, especially when you look at what the future holds:

The global IoT market will grow from $157B in 2016 to $457B by 2020, attaining a Compound Annual Growth Rate (CAGR) of 28.5%.

Discrete Manufacturing, Transportation and Logistics, and Utilities will lead all industries in IoT spending by 2020, averaging $40B each.

Bain predicts B2B IoT segments will generate more than $300B annually by 2020, including about $85B in the industrial sector.

Internet Of Things Market To Reach $267B By 2020 according to Boston Consulting Group. (source)

and it will be interesting to see which companies besides BOSCH will collaborate with IOTA.

Being focused entirely on IoT, IOTA wants supply chain to be an important part of its application. This is why the IOTA Foundation hired an asset in this regard: Jens Munch Lund-Nielsen. He is leading the supply chain branch at the Foundation.

A live demo of IOTA and supply chain will be shown at the Bosch Connected World Conference on February 22.

Moreover, there seem to be some announcements in the pipeline (besides new exchanges, new wallets, new homepage, Q, …):

It will be interesting to see what Dominik will show to the masses at the Bosch Conference — so far, except for BOSCH (which is linked to everything in terms of IoT) no partnerships have been revealed with regard to supply chains, but this might change sooner than we think…

As always, I would be really happy about donations (you may also read my other articles):


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The full article was originally published by Chris Mueller on Medium, where people are continuing the conversation by highlighting and responding to this story.

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