Buoyed by recent technology advances, Internet of Things (IoT) networks are continuing to mature, and are now two to five years away from making a transformational impact on supply chain operations, the research and analyst firm Gartner Inc. said today.
The assessment comes from Stamford, Connecticut-based Gartner’s “2020 Hype Cycle for Supply Chain Strategy,” which found that IoT has reached the bottom of what the firm calls “the Trough of Disillusionment.” Henceforth, the IoT market will begin to climb out of this trough, as the technology advances and practitioners succeed in defining the best opportunities for the unique measurement and tracking capabilities of this approach, Gartner said.
“IoT is in the trough because we see that many companies are implementing the technology, but they struggle to define the best opportunities for using its measurement and tracking capabilities,” Mike Burkett, vice president distinguished analyst with the Gartner Supply Chain Practice, said in a release. “We see further potential to grow its use over the next several years.”
According to Gartner, installed IoT endpoints for manufacturing and natural resources industries are forecast to grow to 1.9 billion units in 2028. That would mark five times their level of 331.5 million units in 2018. Gartner’s “2019 Digital Business Impact on the Supply Chain Survey” found that 59% of respondents had partially or fully deployed IoT across the entire organization. Another 22% were piloting and 15% had not invested yet, but planned to do so in the next two years.
“We have categorized IoT as a transformational technology because it has the potential to impact many areas of the supply chain in a broad and profound way,” Burkett said. “While the most obvious use cases are in manufacturing, IoT can also help improve customer service because it enables leaders to better understand customer needs. More mature organizations will also be able to create information-based products such as providing visibility and analytics for better asset usage.”
Gartner’s “Hype Cycle” also showed that nine other technology concepts are further down the road to widespread adoption than IoT, beginning with: end-to-end supply chain risk management, metrics and performance management, digital supply chain strategy, supply chain segmentation, cost-to-serve analysis, and network design. And the three technologies on the very cusp of success are: center of excellence, diagnostic analysis, and descriptive analytics.
Likewise, the chart listed 22 technologies that still lag IoT in maturity, including familiar concepts such as: predictive analytics, prescriptive analytics, machine learning, robotic process automation (RPA), blockchain in supply chain, supply chain control tower, artificial intelligence, and digital supply chain twin.