3 Questions to...
Starting with this edition, we are introducing a new column to our newsletter: “3 Questions to…”. Executives and distinguished experts from SMARTRAC and its partners will answer questions related to contemporary issues that concern the RFID industry and market. Today, SMARTRAC’s CEO Christian Uhl takes the lead, talking about the IoT.
What is your definition of IoT?
I will not bore anyone with technical definitions so let me bring it down to a quite basic level instead. A good portion of mankind is somehow connected to the Internet, either by computers, mobile devices, smart TVs or gaming consoles. A growing number of complex devices like teller machines, machine tools and fridges are becoming connected. And then there are trillions of small things, simple things that will one day also be connected to the Internet of Things. If you look at today’s world, there are about 3 trillion things being sold every year. But all these things are not yet connected, which means they are dumb things. If we manage to connect them to the Internet in a cost-efficient way so that they become smart -- and by smart I mean that you can digitally interact with these things – then we will create truly massive data loads on the one hand. On the other hand, we will create opportunities that approach the limits of our imagination or even go beyond them.”
What are these opportunities and what would the benefits be for a customer?
From a business perspective, these new opportunities to increase revenue or reduce costs are really tremendous. Connecting everyday products to the digital world offers virtually unlimited use cases.
For a start, imagine the potential for brands if IoT-connected branded products could do a better job at retaining consumers than traditional advertising, which currently soaks up some US$ 500 billion globally each year. As a company, we just launched EXPERIENCES, a solution based on our IoT platform SMART COSMOS, which takes the consumer experience and customer loyalty truly to a new level.
Secondly, envision the potential for connected goods to prove to supply chain management systems, e-commerce sites and customers that they are genuine. NFC tags invisibly built into branded products could act as certificates of authenticity readable by consumers or customs officers with a common NFC-enabled smart phone. Today, annual losses due to counterfeiting add up to some US$ 500 billion, according to estimates by the World Customs Organization.
Thirdly, picture being part of the next industrial revolution, also called Industry 4.0 or the Industrial Internet, by better connecting parts and components to manufacturing processes and supply chains. If those parts or components contain RFID tags, they could literally tell production machines what they should do next. The value created by that industrial revolution is expected to grow to around US$1.3 trillion by 2020.
Finally, think of pharmaceuticals, where you can be sure that a product is not counterfeit; think of the supply chain, which will become more efficient; or think of retailers, who can leverage real-time, item-level visibility and analytics to strongly optimize their store operations. For the latter, you don’t need your imagination any longer: in January 2016, we introduced METRICS, a solution that provides exactly that.
How can SMARTRAC help customers to get these benefits?
In cooperation with major customers, we’ve developed a step-by-step methodology for the seamless implementation of new IoT solutions while maximizing return on investment. In a first step, we work closely with our customers to determine the best way to physically embed RFID transponders into those simple things that make up the IoT.
In the second step, we support customers to enable those items for the IoT by linking the RFID transponder data to the data about the individual item. This should ideally take place at the time of production of an item, but can also be done later in the supply chain, e.g. in a distribution center. During this step we utilize SMART COSMOS to store and manage the transponder and item data in a scalable, reliable and secure way. Our SMART COSMOS platform is vertical-market agnostic, and can help not only the manufacturer of products or items, but also the overall ecosystem, to achieve increased productivity and lower operational costs through more effective supply chain management, reliable automation, and capturing data from consumer interactions with NFC-tagged products.
In a third step, we work with our customers to utilize the captured data to optimize costs and maximize value across multiple departments or even their overall ecosystem. In other words, we help develop innovative IoT applications that can sit on top of SMART COSMOS and provide a fast track for businesses to utilize the Internet of Things for their specific needs. By utilizing the services and software developer tools offered by SMART COSMOS, enterprise customers can easily and quickly create these innovative applications.
Besides that, we already are and will be offering ready-to-use IoT solution packages for specific industries: our METRICS in-store analytics solution for retailers is the best example of this concept, while our EXPERIENCES solution for brands works in slightly different way. Allowing for extreme item personalization through a new digital content platform, it provides an easy-to-use toolbox for individualized customer loyalty solutions.
There are for sure many roads that lead to the IoT benefits I have outlined. With SMART COSMOS, you can easily build your own road.