The Internet of Things (IoT) can be used to solve real problems – it’s not easy but can be done, especially if you think out of the box.
This is the word from Lyle Brady, group distribution executive at Massmart, who points out that logistics is always a big challenge for the organisation.
A couple of years ago, process re-engineering was used to drive a lot of cost out of distribution – but there is a limit to how much this can continue to reduce costs.
“We had to think outside of the box,” says Brady. “So we started on the IoT discussion.”
Having tried unsuccesfully to drive IoT through the IT team, Brady realised that this project had to be driven by the business.
The reasonably simple step of using passive tags to monitor people in the distribution operation started to reveal some valuable insights.
“What we hadn’t accounted for was that people might be following the processes – just not all the time. When we started monitoring where people were, we found they were only spending 40% or 50% of the time doing what they should.”
Using the passive tags, and matching location data with process data, helped Massmart to start addressing the issues of productivity.
“But everything is an ecosystem,” Brady points out. “Tagging people isn’t good enough; you have to tag the equipment they use as well to get an understanding of what actually happens inside the facilities.”
Some of the early learnings include that facilities could be too big; people could be more compliant; and productivity seldom reaches 50%.
“What IoT has brought us is a depth of data,” Brady says. “From the bit of data we have so far, we have realised that, while we are level with industry benchmarks, we are so far off in terms of productivity it is frightening. But we are starting to realise what we need to do.”
Brady’s advice for organisations looking to implement IoT solutions is that they have to start by understanding the business problems – and apply IoT where it can solve the problem rather than for its own sake.
“You have to understand how the problem exists: solving for the problem you see rather than the problem that exists won’t help.”
Since implementing the IoT system and receiving data from the floor, Brady says his organisation is starting to question everything that is in place.
“There are so many processes entrenched in the systems we use, where new solutions could be more cost-effective and more efficient.
“We find that we have to deal with the old technologies and the new thinking; and to rethink everything around us. But it has to be a phased implementation because you have old minds and entrenched products that you can’t escape from.”
Scarce skills shortages exacerbate the business problem. “What we can change is to put IoT ecosystems in place that allow the smart people we do have to be better equipped to make business decisions.”
The bottom line for an IoT project, Brady says, comes down to the following:
* Understand what the business problem is;
* When you solve a business problem, see it through to the end;
* Understand the ecosystem the business problem exists in – when you break one thing you will break another;
* Find a champion in the environment that will help to drive the project; and
* Very importantly, you have to beat the price:performance ratio.