The Key Technologies Shaping Operations
by Colin Prout and Mark Grayham | Iter Insights
The Key Technologies Shaping Operations
Welcome to the third in our series of Digital Agenda articles which examines the technologies that are changing both the client expectations of what suppliers and operations should deliver, as well as the supplier capabilities to meet and exceed client service expectations.
We will cover the main technologies which are shaping operations, the linkages between them, and some of the challenges you will face implementing them within your organisation.
You may wonder why this is relevant to you? The answer is that you need to be keeping an eye on this changing landscape to see how and where It can add value to your business, or your customers. Technology can provide more timely information to you and your customers, and that provides opportunities for greater control of product and information flows and improve decision making and forecasting. This will obviously improve your bottom line and should, if properly considered and applied return far more than the outlay.
In unison with many others we believe the technologies which are currently shaping our operations and supply chains are:
- Expanding Internet
- Cloud based services
- Internet of Things (IoT)
- Master Data Management (MDM)
- Big Data
These can be applied in many combinations however there are significant dependencies between these technologies for example:
- The Expanding Internet can provide a tipping point for the move to cloud-based services
- By definition IoT is also dependent on internet/network connectivity
- IoT and other increasing sources of data are driving Big Data
- For Big Data to be transformed into valuable information and provide usable insights, data quality is essential driving the need for Master Data Management
- AI’s ability to work so well with data analytics is the primary reason why AI and Big Data are now almost inseparable.
- Data has value and businesses can no longer live with the loss of systems making security essential for data in transmission and at rest, so security needs to be provided from the get-go and maintained. Blockchain can help here.
1. Expanding Internet
The internet has been around for many years now and has developed rapidly in terms of its capacity and capability but there are still significant groups that are yet to be connected (2019 mid-year estimates put Global Internet penetration at 58.8%.)
Global expansion continues through the use of fixed, mobile and satellite services but as important as growing user and device numbers is the speed, capacity and dependability of connections especially in the context of distributed or Cloud Based Services and IoT.
Edholm’s law predicts that telecommunication (including internet) bandwidth and data rates double every 18 months (true since the 1970s) so new technologies such as 5G, Bluetooth 5.x and Wi-Fi 6 are critical to cope with increasing volumes of data and numbers of devices. Bluetooth 5 for example has focussed on IoT enabling by providing control over the prioritisation of speed or range, freeing IoT connected devices from fixed connections that limit flexibility. It also adds two new modes for security, which should be a consideration when introducing these devices to a secure network. Finally, in addition to IoT data transfer, these technologies can support indoor location and asset tracking solutions.
In terms of rising customer expectations and supplier capabilities, the expanding internet is an enabler for greater visibility, responsiveness, control which will be expanded upon as we link technologies into systems.
2. Cloud Based Services
Cloud based services have been around a while (Amazon Web Services AWS were launched in 2006, Windows now Microsoft Azure was launched in 2010) and over that time both have become billion-dollar businesses. Cloud offers many benefits including:
- Access & mobility 24/7, 365 days a year from wherever a connection exists
- High availability 99.999%
- Disaster recovery
- The ability to “scale” for example needing to sell hundreds of thousands of Glastonbury tickets within an hour twice per year. Scaling Includes reducing resource allocation, for example overnight you may not take many orders
- The ability to quickly spin up a test service, and drop when its purpose has been completed without needing to buy the Infrastructure
- Responsiveness to changing business needs and innovation
- Security over and above what many businesses can individually provide and support, including flexible geographical location of backups
- Reduction in the overhead of expensive technical staff to configure and manage your server farms and storage
You can now find and/or build a Cloud solution to fit almost all needs and Cloud usage is growing. Cisco believe Cloud data centres will process 94% of workloads in 2021 …. staggering! Cloud can consolidate isolated systems and join islands of automation and provide single views of global operations.
In terms of rising customer expectations and supplier capabilities, Cloud based services can increase access to and availability of data and information. However, one significant weakness of cloud services is its dependency on secure connections, and it can also make data analysis more demanding due to speed of access.
3. Internet of Things (IoT)
“The Internet of Things (IoT) is a system of interrelated computing devices, mechanical and digital machines, objects, animals or people that are provided with unique identifiers and the ability to transfer data over a network without requiring human-to-human or human-to-computer interaction” Wikipedia.
Today you can collect specified data on almost anything by adding a range of network connected sensors with data transmitted back to Cloud or Local applications for analysis. Analysis is typically focussed on increasing asset utilisation, supporting preventative maintenance, improving customer service by understand behaviours, the list goes on… Gartner, Inc. forecasted that the enterprise and automotive Internet of Things (IoT) market would grow to 4.8 billion endpoints by the end of 2019 and 5.8 billion endpoints during 2020.
IoT growth is increasingly supported by the new mobile and wireless technology and the data devices provide supports rapid development in the use of “Digital Twins” and simulation, a subject for a future article. IoT is the key enabler of the 4th Industrial Revolution and the digitisation of your business operations. Looping back, improvements in Bluetooth 5 in terms of range, data transmission and security (two additional security modes) have come at an opportune time.
In terms of rising customer expectations and supplier capabilities, IoT can provide real-time and periodic asset, process and product data both in respect of status and location.
4. Master Data Management (MDM)
Good data management underpins any big data analysis and forecasting and feeds into your data warehouse (structured data repository) or data lake (unstructured data repository). If your company has a number of legacy systems to manage customers, inventory etc. then you need to be sure that you are linking the right people to the things and autonomous systems can only allowed to make decisions based on accurate data.
MDM identifies the data that is critical to your business and then provides governance and control around its generation, use (including synchronisation) across systems and change management. MDM supports:
- A single source of the truth
- Transparency across the organisation
- Accurate Forecasting and Reporting
- Managed system Integrations across companies and geographical areas
MDM improves the quality and data and therefore the quality of services as they are factually based.
5. Big Data
Big data focuses on the analysis of data to extract information from data sets that are too large or complex to be dealt with by traditional data-processing methods. It brings its own terminology such as Data Lakes, Data Warehousing, Data Mining etc. and sources of data are increasing daily due to the expansion in business systems, their integration, and the number of data sources from eCommerce and IoT. This presents a number of challenges:
- Dealing with data growth but Cloud can help here.
- A large proportion of created data is unstructured meaning that it doesn’t fit within the rows and columns of a database such as documents, photos etc. Unstructured data can be difficult to search and analyse.
- Data quality: Data needs validating and cleansing before being analysed. Master Data Management is increasingly important.
- Integrating disparate data sources requires skills and technology. Some data sources may reside in other third-party organisations making data sharing agreements and protocols essential.
- Dealing with the rate of change of data requires the rapid generation of insights and decision making especially if autonomy is required.
- Security, given that large data stores have value and are attractive to hackers
- Trust & confidence in the systems/insights to the point they trigger action
- Recruiting and retaining skilled analysis
Big data can provide customer insight delivering increased service levels whilst allowing for the optimisation of internal operations.
Artificial intelligence (AI), sometimes called machine intelligence, is intelligence demonstrated by machines, in contrast to the natural intelligence displayed by humans. The term AI is used to describe a broad range of technologies and they are already in use within medicine, manufacturing, supply chains and finance. AI technologies include:
- Machine learning
- Natural language processing (Producing text from computer data)
- Automation & Robotics
- Artificial neural networks which “learn” to perform tasks by considering examples, generally without being programmed with task-specific rules
- Deep learning which is built upon neural networks
AI is supporting the operation of autonomous business systems, optimisation of supply chain networks, and improving planning and forecasting. AI is currently a buzzword that is often used to market solutions that have tenuous AI capabilities, so buyers need to be clear on both the systems capabilities and what you actually need before ordering!
One other consideration is that some AI technologies have been black box solutions i.e. you feed data in and get information/insights out without visibility of what happened inside the box. Whilst this is slowly changing, the validation of black box decision making needs careful consideration before and during testing and deployment.
Big Data and the information and insights it can provide are increasingly valuable and the reliance on it and its secure collection, storage, movement and processing is growing. Many business processes are dependent on this data and there are concerns that whilst core systems are protected, IOT devices for example may remain vulnerable in the short-term due to lack of built in computing resources, security applications and industry standards. Stating the obvious, a system is only as secure as its weakest link and we have a tension between security/privacy and the desires of governments to retain visibility which leads to vulnerability.
A documented security policy is a useful starting point both to ensure that your systems and processes are secured to the level that you require, but also (should the worst happen and data Is exposed) to provide evidence of due diligence to mitigate any fine levied.
In terms of rising customer expectations and supplier capabilities, security is taken for granted until breaches occur. Getting it right helps guarantee system availability and maintains your reputation.
Blockchain is a breakthrough technology that is expected to alter most industries in the coming years. You can think of blockchain as a digital medical record where every record is a block which has a label stating the date and time when the record was entered. The medical history is extremely important for diagnosis and treatment purposes, so neither the doctor nor the patient should be able to modify the records already made.
Nevertheless, the doctor owns a private key that allows him to make new records, and the patient owns a public key that allows him to access the records anytime. This method makes the data both accessible and secure. So, blockchain is by definition independent, transparent, and secure. The advantages of the distributed ledger are obvious: cost and risk reduction, data security, or transaction transparency.
Blockchains are increasingly used to secure pharma supply chains by locking validation records securely within the chain, making changes and amendments completely transparent, improving trust and reducing costs. Their use is expanding and they will become a key part of supply chain/business system operation.
Many years ago, Service Orientated Architecture (SOA) was introduced. This introduced the concept of reusable modules. Microservices extends this concept but also embraces the usage of technologies such as the Internet of Things and Cloud, and can bridge manufacturing, production and distribution and supply chain management.
Business requirements are identified, and relevant technologies identified then the appropriate tools are used to rapidly create prototypes, make frequent changes based on operations and market feedback and move more quickly to deployment. This includes understanding supply chain strategies to ensure that the solutions will be able to handle the growth expectations of the business.
Major players like Amazon, Netflix and eBay have adopted these architectures, with their solutions constructed as a suite of small services that run as separate processes and communicate through lightweight network-based mechanisms. In addition, the microservices can be deployed and managed independently ensuring agile and more robust solutions.
The fourth in our series of Digital Agenda articles next month will provide an approach to selecting and deploying technologies to solve operational and supply chain challenges.
Colin Prout, Delivery Director
Mark Grayham, Consultant
Welcome to Iter Insight, this is one of a monthly series of articles from Iter Consulting addressing the most critical operational and supply chain problems businesses face today.