Any change brings opportunities and threats. At ALOM, we have seen how wireless technology integration is changing how business is done. Formerly, manufacturers manufactured a product and others then resold it to consumers. End of story. Apart from occasional warranty issues, there simply was no dialogue with customers.
Now fitness, health, home, and other devices are sold not only based on the product itself, but also based on related services. Embedded electronics, software, sensors and wireless communication technology make it possible for a growing array of products to connect and share data. This rapidly growing network of connected devices is referred to as the Internet of Things (IoT).
As part of the purchase selection, the consumer looks at how data is being captured and processed on their smart devices, how secure the app is, whether a consumer community exists and a number of other related technology services. The manufacturer all of a sudden becomes a technology provider, creating software, apps, and reports. The original equipment manufacturer (OEM) also needs to consider building a community and building other value propositions. This is unchartered territory for most corporations.
At the same time, the devices are feeding data back to the manufacturer. This provides insight into how the product is being used. It also opens opportunities for cross selling and replenishment models. Somebody has to help corporations make sense of the data and leverage the opportunities.
Take a simple yo-yo. Whether manufactured by a small WBE or by a larger corporation, the expectation will be that technology is built into the yo-yo. Each owner will be able to follow how she ranks in competition with other yo-yo owners across the world. The yo-yo device will communicate with social media. The associated app keeps track of the user’s skill levels and automatically suggests to the user new exercises that may improve the skill level. With the knowledge, users can be invited to a yo-yo conference in Las Vegas and assigned to the appropriate category for a tournament. Maybe the tournament becomes the money-maker for the margin-strapped yo-yo manufacturer.
Now transfer this concept to medical devices. From strengthening the pelvic floor to monitoring dementia, the technology becomes integrated. Devices can already detect changes 15 hours before a woman goes into labor. A business opportunity now exists to securely capture the data and figure out how to provide services that are of value.
ALOM sits at the center of supply chain, where new technologies provide unprecedented visibility and traceability. When we know exactly what is sold, which color of the product was sold, at which location, what the expiration date is, and if the product overheated during transport, we can act accordingly.
By utilizing advanced technology, and through the ALOM customer portal, COMPASS™, we now have real-time, actionable visibility to avert supply chain disruptions for our clients and their customers.
As predictive analysis improves, we can foresee product failure. For instance, ALOM can for certain products, such as SD cards, receive signals back that the card is about to fail. We can then ship out a replacement card to the user before or at the time that the card fails. For mission critical equipment, such as in hospitals or airports, these proactive replenishment models will increase reliability and critical uptime.
The next challenge will be integrating data from the product into new business models with additional services. An example is automotive companies that are developing technology services around infotainment and navigation system content. A few visionary corporations already understand this development. Ford Motor Company is an example of an OEM who has embraced technology and is determined to be the technology leader.
Yet the threat for businesses is in not seeing this fast-approaching paradigm shift on the horizon. Fax machines sold well for a while; those days are over. The other threat is not understanding the risks. Cybersecurity has become a huge issue, from privacy to fraud to property crimes. Even in the supply chain cybercrime is never far away, as criminals can pinpoint the exact container with valuable items on a given container ship.
The threats notwithstanding, the opportunities for businesses are legion. Corporations will need significant help leveraging opportunities. From strategic advice in creating business models, to supporting the technology aspects, to working the new marketing challenges, to restructuring their workforce and organization to the new demands. Cybersecurity, data mining, storage and data management are all representing huge business opportunities for WBEs.
Most of us have lived through tremendous technology changes. It is exciting but at the same time daunting to think that the biggest changes are still ahead of us.
But we must accept it: We are all going to be technology companies. For companies like ALOM, making our living in supply chain, this transition began some time ago as technology drives our services and delivery. For manufacturers, the next 10 years will bring an awakening and an integrated service revolution.
This device-enabled, data-driven revolution will open unprecedented opportunities for service providers integrating with consumers and manufacturers. It has already redefined ALOM’s role, as we embrace and integrate the digital supply chain. How will it redefine your role?
Hannah Kain, President & CEO of ALOM
2017 WBENC National Conference & Business Fair Co-Chair
With Fortune 100 clients and 17 locations worldwide, ALOM has been at the forefront of making integrated supply chain management a crucial C-suite tool for enhanced performance and risk management. ALOM manages entire segments of its clients’ supply chain, including manufacturing and operations, product delivery and fulfillment, e-commerce, and related support services. Under Hannah Kain’s leadership, ALOM won the 2015 Silver Stevie Award as the best global woman-owned company.