From wearables to programmable thermostats, the Internet of Things is already transforming the way we work, play, and live. It’s estimated that, by 2020, there will be between 20 and 50 billion devices – that’s billion, with a B – connected to the IoT.
Many of them will be part of the industrial internet – the behind-the-scenes networks that power business processes. And they’re going to pack a wallop. In fact, research conducted by DHL and Cisco forecasts an economic impact of almost $2 trillion in the supply chain/logistics sector alone. Another survey conducted by GT Nexus and Capgemini indicates that 70% of retail and manufacturing organizations have already started implementing IoT technology in their supply chains.
Implications for supply chain and procurement professionals
As the supply chain evolves, so will the skills required by procurement professionals. Increasingly, successful supply chain and procurement professionals will need to be innovative, visionary, tech-savvy leaders.
Tomorrow’s successful procurement managers must be skilled in:
- Critical thinking: A single turbine engine can generate more than a million data points per hour. Extrapolate that to multiple warehouses and the various fleets that feed them, and you’ve got an overwhelming amount of data. Procurement managers will have to quickly sort through that data to identify information that is both relevant and actionable without getting distracted by “nice-to-know” data.
- Associative thinking: Associative thinking means looking at seemingly unrelated factors and seeing a previously undetected connection. It’s the ability to recognize patterns and decide what they mean. In an world where all obvious waste has already been eliminated, procurement managers who can spot these patterns will have a direct impact on the bottom line.
- Making fast decisions: Because real-time data brings with it the expectation of real-time solutions, procurement managers must become proactive rather than reactive. They’ll need the ability to make quick decisions in order to avert crises rather than being satisfied with damage control.
- Enhancing their technical skills: More than ever, technology is accessible to everybody, not just tech geniuses. Apps like IFTTT, for example, let parents build a “recipe” – essentially a code – to set up a chain of notifications that lets them know when their kids get home from school: The home’s security system pings the phone, and the phone notifies the parent. Procurement managers who want to run agile organizations will need to master mainstream technology to solve problems when they happen.
- Innovation: Tomorrow’s procurement managers will have a once-in-a-lifetime opportunity to see possibilities that were previously invisible – and unimaginable. It’s the reverse of most innovation, in which you start with a goal and develop a way to achieve it. In this case, the IoT will provide a wealth of completely new information, and it will be up to procurement managers to figure out what they can do with it.
- Strategic thinking: The supply chain is stepping out of the cost-center shadows and into the value-added inner circle. Accordingly, procurement professionals are playing a bigger role in shaping company strategy. In one survey, 70% of respondents indicated that they saw the supply chain as crucial for long-term wealth creation. And 48% said that, within 10 years, the chief supply chain officer would be a standard member of the c-suite.
The Internet of Things and its impact means companies will soon need procurement professionals who are visionary, agile, anticipatory, innovative, and strategic. Are you ready?