In a report we recently published we looked at how the Internet of Things (IoT) would impact the retail world. One area we focused on was the food and grocery portion of retail. An idea we explored was how IoT could allow grocers and other players within the food supply chain to extend their reach beyond the store shelf and into the shelves in our pantries and refrigerators. Eventually grocers and manufacturers could leverage this connectivity to better understand demand patterns, usage and even correlations between different items. This use case has taken another step closer to becoming a reality.
Companies like Orange Chef have started to market and sell “smart counters.” Granted the one offered by Orange Chef is more of a chopping block sized device for your kitchen, but let us project out into the future. These counter tops aren’t so much about whether or not you want black granite, Azul Macauba or a fine Italian marble, but how many sensors, beacons and connected nodes your new kitchen counter tops will contain. The smart counter top will be able to identify what you are placing on it. For example you may place on it a nice
About to get a whole lot smarter!
salmon steak or some lamb shanks. The smart counter will then be able to offer you ways to prepare the food offering you recipes and other items you may want to include. The counter will also be able to tie back into your wearables as well as other applications. Training to run a marathon and using your smart phone to keep track of your progress – maybe that bacon isn’t what you should be eating this close to race day – your counter top will tell your phone or wearable, which will tell you. Trying to cut back on red meat – the smart counter will keep tabs on what you are preparing for your dinner. This is a great example of the kitchen becoming smarter and more interactive.
It is not a big leap to go from the kitchen and your counter top being proactive in your meal preparation to being tied into a larger network – say in your neighborhood – that would communicate with local grocers and even distributors to better manage what they stock. Maybe the paleo diet is catching on your neighborhood, if the smart kitchens figure this out, the local stores might want to ramp down on some of their processed food orders.
Of course this will also come with the expected questions around privacy and information sharing. Will consumers trust the likes of Tyson Foods, Mondelez, Kraft, Dannon and other large food providers to have access to such data? If these companies or a third party (think Nest for your grocery bill) can demonstrate or help consumers with their spending then consumers will become more at ease with sharing their information. The fact that households in the United States spend on average $166 a month on energy – the target for Nest – yet they spend 30% more a month on their grocery bill (based on U.S. Department of Energy and the U.S. Bureau of Labor Statistics) would indicate that there is an opportunity for enhanced intelligence to be applied to this sector. IoT empowered devices could bridge that last consumer mile for grocers, CPG and food manufacturers.
We wouldn’t just have our mothers and significant others to remind us that late night ice cream isn’t good for us, our smart kitchen will do it as well.
It is that time of the year again here in the United States…tax day. You know how the saying goes:
Our new Constitution is now established, and has an appearance that promises permanency; but in this world nothing can be said to be certain, except death and taxes.
I might add another certain to Ole Ben’s letter – supply chain disruptions. Unfortunately much like death and taxes, these disruptions are not something to look forward to. But much like taxes and death, the inevitability of their happening does not mean we shouldn’t plan for their potential impacts. By preparing for these events we can ensure that we emerge from these situations in the best shape possible.
During the first few months of this month I have heard the same concerns about our supply chains:
So what does this mean? When it comes to our supply chains we should focus on three rules:
- Embrace the growing amounts of data and sources of that data. While data is not the panacea for our ills, it can provide clearer picture of what is happening and where things are being impacted. The growth of data as well as what is producing the data (think IoT) opens the door for companies to get a greater understanding of their supply chain. This digital disruption will only continue to grow in importance – maximize the value for your supply chain.
- Constantly push yourself to keep an eye on possible new business models. Anyone who has been in business, gone to business school or just read a business publication knows that the secret is to always be ahead of your competitors with “paradigm” changing models. True. But not easy to identify. However within our supply chains we do not need to always identify but more – be open to discovering and leveraging these opportunities when they present themselves.
- Focus on what you can control. Understand what you cannot control and think about how it can impact your supply chain, but focus on what you can control. The data should help you better understand what is possible as well – but there must be a discipline as to what is controllable and what is not. Within the context of modern supply chains, this discipline is even more crucial.
Like death and taxes, disruptions to your supply chain will be a constant. The good thing is that new digital aspects have given supply chains a fresh arsenal of solutions and business processes to offer solutions to meet this disruptive realities.
The headlines about the California drought have been a constant drum beat about the issues we face with this most vital of global resources. Of course when you look at what we here in New England suffered through this winter, it is hard to fathom a water shortage! Sometimes it is also surprising to read about water issues when over 70% of the planet is covered by water. But much of that water is not fresh water, only 2.5% of the global water is fresh water, and of that 70% is trapped in the icecaps of Antarctica and Greenland. Access to fresh water will continue to be a major global issue. And an underlying one for our supply chains.
- Agriculture – no surprise here. The numbers from California demonstrate the heavy reliance on water usage. With the Golden State’s farms using a whopping 80% of the state’s water – it is clear this industry remains a leader when it comes to water consumption. Couple this with a growing global population, the agriculture supply chain will find itself under greater strain to meet this demand while controlling their usage of water. It will be interesting to see if this supply chain starts employing tactics that we are seeing in manufacturing – near shoring. When states like California supply 80% of the global almond supply, yet that crop consumes 10% of California’s water – or 1.1 gallons per almond. Granted it is easier said than done since crops require much more than just water – soil and weather play major factors in crop growth. But moving crops to different location is not that easy.
- Manufacturing – industries such as chemical, beverage, steel, paper production to name a few are heavily reliant on water. By some estimates it takes 80,000 gallons of water to produce on automobile, 700 gallons on water for one cotton shirt and 24 gallons of water for 1lb of plastic. Supply chains have become more efficient when it comes to the manufacturing process, reducing some of the water strain from that angle. However, as our product supply chains are introducing products at a faster pace, and therefore taking out goods from the supply chain at an increased pace – the strain on the water usage is under pressure from that perspective.
- Future of work – these water issues are not simply about how we produce goods, but the workers within the supply chain are also impacted. It goes beyond Californians’ not being able to water their lawns and their quality of life. But in regions such as northern China, parts of India, the Middle East and sub Saharan Africa the issue of water directly impacts the work force. While some of these regions might offer affordable labor and new markets, if that population is more concerned about securing water that will impact their roles as workers as well as consumers.
The bottom line is the latest water shortage in California is a reminder that natural disruptions are omnipresent within our supply chains. Of course our supply chains cannot control natural occurrences such as droughts. But when it comes to simulating our supply chain networks, determining our planning and sourcing we must factor the possibility of these disruptions. Our supply chains function in a system that is still driven by natural forces. Those are variables we are the mercy of…understand how they can impact your supply chain. Ignore them at your own peril.