Gartner: IoT to make a big impact on supply chains within five years

Shipping containers part of a supply chain

A new forecast from the analyst firm Gartner suggests that the Internet of Things (IoT) will make a transformational impact on supply chain strategies in the next two to five years. The forecast is based on a hype cycle which suggests IoT has passed the hype stage and reached the ‘trough of disillusionment’ preparing it for further phases.

According to Gartner, a hype cycle consists of an ‘innovation trigger’ where the technology is new and expectations are still low. Expectations then rise to reach the ‘peak of inflated expectations’. As more time passes and expectations drop leading to the ‘trough of disillusionment’ and finally expectations moderately grow over a period (slope of enlightenment) before reaching the ‘plateau of productivity’.

Explaining the current stage on the hype cycle with regards to IoT in supply chains, Mike Burkett from Gartner said:

“IoT is in the trough because we see that many companies are implementing the technology, but they struggle to define the best opportunities for using its measurement and tracking capabilities. We see further potential to grow its use over the next several years. Gartner estimates that installed IoT endpoints for manufacturing and natural resources industries are forecast to grow to 1.9 billion units in 2028. That is five times from 331.5 million units in 2018.”

The options supply chain managers have when it comes to deploying IoT are large and implemented in the right way could lead to savings for the business and increased production. For average consumers, adoption of this technology in supply chains could lead to any savings made from efficiency improvements being passed onto customers.

Gartner says that it’s important that supply chain leaders identify areas of the supply chain that could benefit from the technology to make the best use of it. In a 2019 report, it said that 59% of businesses had already partially or fully deployed IoT with another 22% piloting the IoT technologies, and another 15% planning to invest in the next two years.