Sourcetoday 517 Technology Connection Concept 1

The IoT and the Supply Chain

July 13, 2015
Harnessing the power of the Internet of Things means identifying the hottest potential markets for design engineers, getting the right products to engineering and production in a timely manner, and laying the groundwork for better connectivity in manufacturing environments.

The Internet of Things market is set to have a considerable impact on the electronics supply chain, affecting everything from purchasing to design to the plant floor. It will play out in different ways for each party, but industry watchers agree that the potential for 50 billion connected devices by 2020 (according to technology company Cisco and others) means increased business opportunities across the board.

“The statistics don’t lie. The number of connected devices [in the future] is going to be massive,” says Dianne Kibbey, global head of community for electronics distributor and online community element14, which surveyed 3,500 customers on the potential of the technology earlier this year. “And there is so much development going on. If you think of everything in your life that is going to be connected—and also all the industrial and manufacturing applications that can benefit from this—every aspect of engineering is going to be affected by this technology.”

That includes design engineers, purchasing professionals, and employees on the plant floor. The element14 study—Engineering a Connected Worldidentified some of the hottest markets for IoT technology today and in the years ahead, and other industry researchers have pointed to key factors driving the potential of the Industrial IoT—a subset of the IoT that will have an impact on the plant floor. Here’s a look at how IoT trends may play out across the electronics supply chain.

Target Markets for Engineers

The Engineering a Connected World report found that two-thirds of consumers want to see more “green” IoT technology, 68% think healthcare is one of the most important industries for IoT innovation, and 64% are worried about the security implications of wearable electronic devices, in particular. This translates to key opportunities for design engineers working on energy- and environmental-related projects, health and wellness, and security applications. The automotive industry checked in as another top area for IoT development.

“There is a lot of development in automotive—and not just in entertainment systems, but in developing different efficiencies, reduced emissions [and so forth],” explains Kibbey. “The healthcare industry, renewable energy, and the environment are the top focus areas.”

Kibbey adds that the focus largely depends on geographic region, with healthcare ranking top in the United States and the United Kingdom, and transportation-related industries ranking highest in France, for example. The data helps point engineers and entrepreneurs in the direction of the industries that will be most important going forward. Kibbey also notes the potential for larger IoT-related projects, including city-wide water, lighting, and other energy- and transportation-related projects.

What’s more, the survey data is helping element14 shape its online design challenges—contests in which engineers and hobbyists develop products and solutions for a range of real-world applications. In its newest iteration, the design challenges are shaped around the Engineering a Connected World theme, with environmental and health-related issues ranking high on the list. In June, for example, the distributor launched its Vertical Farming Design Challenge, asking participants to “build a vertical indoor farm that is a true IoT solution, built on the smallest footprint possible with maximum energy efficiency.” The project should include environmental monitoring, a watering and feeding system, a greater growing surface than the overall footprint, and energy-monitoring on overall consumption of power.

“The design challenges we have coming up are very much centered around IoT,” says Kibbey, emphasizing the importance of the technology not only to the design engineering community, but to society at large.

In the Purchasing Department

The proliferation of connected devices will affect the purchasing department, too. Buyers will be busy accommodating a growing need for the pieces and parts to make IoT projects work, as original equipment manufacturers and contract manufacturers keep up with new applications. Buyers will likely see an increased need for sensors and wireless technology, in particular.

“As a purchasing agent, you’ll see an influx of purchases of electronic components for the pieces that make IoT work,” explains Kibbey. “[There will be] a lot of pressure and demand to get these solutions to the design engineers fast.”

Technological advances in and of themselves will affect buyers, as well.

“Their world will change too,” Kibbey adds, pointing to a streamlining of the profession that is likely to occur as a result of increased connectivity. As one example, she points to HP smart printers that can detect when toner is low in the printer and automatically order more. “So the purchasing agent is freed up to do other things.”

“You can see the impact of where this is going,” Kibbey adds, noting the potential to grow beyond the anticipated 50 billion connected devices in just the next few years. “The possibilities are endless.”

On the Plant Floor

The challenge for manufacturing operations is a bit more fundamental, as production facilities nationwide will need to focus on developing a platform that will allow existing systems to talk to each other, enabling greater connectivity.

The Industrial IoT—or IIoT—refers to “smart connected operations” within a plant or production facility to create products and services, according to LNS Research, a manufacturing industry research organization. There is much work to be done to create these “smart” systems, LNS explained in a report earlier this year, pointing to a legacy of information and automation technology solutions that exist in manufacturing facilities nationwide that “do not easily interoperate with one another” today.

“… this communication sticking point is a major roadblock to actually realizing Industrial IoT capabilities, and why the creation of an IIoT Platform that can integrate the information from these legacy systems is necessary,” the firm said.

As technology improves and hardware becomes less expensive, more and more objects within a plant will become part of this connected network. LNS notes that by 2020 the network is expected to include devices, sensors, instrumentation, materials, mobile and fixed assets, products, and people. What’s more, the researcher says there are four main areas manufacturers will have to focus on to develop the IIoT platform that will create the smart connected factory of the future:

Connectivity. This includes all necessary hardware and software to network within the plant and the enterprise; standards for integrating machines, clouds, and applications; and the technology for quickly and efficiently managing devices, moving data, and triggering events.

Cloud. This includes all of the various clouds across an enterprise to implement computing and storage capabilities wherever they are most needed—at the edge, within the plant, at the enterprise, or outside the firewall.

Big Data Analytics. This includes the use of a broad set of statistical and optimization tools to cleanse, monitor, and analyze both structured and unstructured data for enabling unprecedented insights.

Application Development. This includes the needed tools for quickly and easily creating new mashup software applications that leverage all other areas of the IIoT platform as well as quickly and easily moving existing legacy applications on top of the platform as well.

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About the Author

Victoria Fraza Kickham | Distribution Editor

Victoria Kickham is the distribution editor for Electronic Design magazine, SourceESB and, where she covers issues related to the electronics supply chain. Victoria started out as a general assignment reporter for several Boston-area newspapers before joining Industrial Distribution magazine, where she spent 14 years covering industrial markets. She served as ID’s managing editor from 2000 to 2010. Victoria has a bachelor’s degree in English from the University of New Hampshire and a master’s degree in English from Northeastern University.