By now nearly all of us have heard the term Internet of Things (IoT). But what exactly does it mean? The Internet of Things (IoT) has been defined as “a network of physical devices, vehicles, appliances and other items embedded with electronics, software, sensors, actuators and connectivity which enables these things to collect and exchange data, creating opportunities for more direct integration of the physical world.” Simply put, it is machine-machine (M2M) communication designed to increase accuracy and efficiency.
IoT can impact virtually every facet of our lives; in 2017 there were 8.4 billion devices - consider sensors, smartphones and wearables (scanners, computers, glasses, backpacks, etc.) that contain processors and have wireless capabilities - in use and this number is expected to reach 20 billion in two years.
In the world of marine insurance, IoT already is impacting the supply chain today and its future potential is almost limitless. For example, adding Radio Frequency Identification (RFID) tags to mobile capital equipment (containers) and even high-value consumer goods such as video games and luxury apparel to track their location was one of the first IoT applications. According to one study, 96% of retailers today are planning to adopt RFID technology.
At last September’s IUMI Conference in Cape Town, Chris Kalinski of Oxford Management Consultants spoke during the President’s Workshop on how this technology is disrupting the supply chain. His presentation is available for download on the IUMI website for those with a password. For others, please contact IUMI – firstname.lastname@example.org - for access.
IoT is expected to add value to a range of key issues and processes including:
- End-to-end visibility: real time knowledge of exact location of goods while in transit
- Warehouse and yard management: accurate inventory and reduced delays
- Vehicle/fleet management: efficient routing and lower fuel use
- Security: theft prevention
- Product safety: sensors for temperature, humidity, and shock measurement with alerts
- Equipment maintenance: reduced downtime
Unquestionably IoT will lead to increases in productivity and enhanced supply chain performance. Improved systems certainly will reduce costs, reduce losses, improve safety, and in some instances create opportunities to generate more revenue. Marine insurers who embrace IoT are sure to benefit.