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Internet of things – Building a case

Internet of Things (IoT) is on everybody’s lips. Major accomplishments are foreseen as big things and small ones are connected. Vehicles in movement communicate with onsite servers and computers through the so-called cloud.

An important question is what functionality to focus on investing the development resources to gain the most customer benefit and product competitiveness. We hope to get you inspired and to support you finding your own answer to the question. The following scenario is an overview on the IoT technology and the benefits it brings.

Let’s for example have a look at a vending machine for food, candy and beverage, or rather a great number of machines all over the country. Customers must be able to access the service 24/7. Less than that is business lost.

The obstacles for the customers shopping are many. Vandals destroy and steal. A failing cooling system lead to an increased temperature inside the machine and the food go bad. There may be a shortage of beverages or there are products to buy but no way of paying due to malfunction.

Indicating problems

The owner of the machines needs to know when and why buying is obstructed in order to solve the problem. For this purpose application of IoT technology is useful. Sensors keep track of the climate inside the machine. Accelerometers detect vibration from destructive violence and a camera catches the perpetrators on film. The machine detects when products are sold out and the vending machines need a fill up.
So sensors and embedded systems keep track and detect a bit of this and that. Wired and wireless communications are used to send status updates to headquarters. Using 3G, GSM or LTE modems for mobile communication from single machines are an option. Sometimes the more cost-efficient alternative would be to connect more than one vending machine to a local network and have a hub use one modem for the communication of many machines.

Planning routes

The status of the vending machine is communicated to company headquarters prior to any dispatch of service personnel.  Advantages are obvious. Visits are made to the machine only when needed. The combination of status information from a network of machines is basis for planning routes servicing the machines and making purchases. Thus far planning is somewhat reactive only. The vending machines have the initiative.
The next step is to be proactive. Statistical data from the machines about the level of maintenance needed and not the least seasonal sales variations offer new possibilities. It might be a good idea to offer more cold beverages and less food during summer. Why not learn from sales variations depending on the weather and let the weather forecast decide what to offer and what not to offer. The goal is of course to increase sales by dynamically adapting the offer to customer needs.

Reducing cost

Hopefully the strategy pays off really well and you’d like to use a similar type strategy not only to increase sales but also to reduce cost. Vehicles need service, maintenance and fuel. Those are substantial costs. Regular service and good driving reduce cost and data from vehicle computers may be used to improve both. 
Let’s install a vehicle computer in every car and use it not only for dispatch but also to plan and manage service and maintenance as well as promoting eco driving. GPS positioning makes route planning and instant route adjustments easier. Why not let the traffic situation have an impact on route planning?
Over time the amount of data collected increase massively. Knowledge is gathered about the buying behavior of the typical customer and the need for service and maintenance of the vending machines. Information about vehicles, routes, cargoes, driving behavior, fuel costs and repairs made are all there easily accessible.

Finding the patterns

The information is of course a major source of opportunities when it comes to improving efficiency, sales and profits. Arrange the data, make calculations and find patterns. Why not compare all expenses and revenues from each category of products and every single product? A result of a thorough investigation is perhaps that it is revealed what product is profitable and what product is not.
Data storage, communication paths and the management of the computers involved may well be handled by a so-called cloud service. Cloud computing is about sharing computer and server resources and thereby gain efficiency and reliability. In this case the cloud is used for example to save data, manage backups, create statistics and upgrade the software in every unit of the system when needed.
This evolution involving the possibilities of IoT is supported by all the new, cost-effective and low power sensors, processors and embedded boards and systems on the market. Wireless communication in short, medium and long distances offer increased bandwidths and more and more options. And even more is coming!  

Increasing competitiveness

As in many cases the possibilities lie not directly in technical advances but in the way technology is applied to create customer value and to increase competitiveness when offering products and services. It’s about being curious, get to know more about your customers, reveal the pros and cons of your offer and to combine that knowledge with the possibilities with new IoT-based technologies.
The case described is perhaps not from your market but I suppose that there are quite a few ways to use IoT to bring advantages also to your offer. Maybe you’ve already begun? We are most interested to hear about your ideas and plans to apply IoT to your offer and we’re happy to contribute with our knowledge about the technologies currently at hand to realize you’re further plans. 

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