Soil to sale, ranch to register: IoT connects producers, distributors, retailers and consumers

The Internet of Things (IoT), everyone’s talking about it. And there is no question that, today, all the technology needed for the transformation of businesses – from the most industrially focused to the most consumer-facing enterprises – is readily available.

E&J Gallo Winery - vineyard
E&J Gallo Winery

IoT, because of its flexibility and, let us admit, complexity, gives CIOs and business leaders in similar roles pause. And this anxiety about the pain of implementing comprehensive digital transformation is causing some foot dragging. Delaying however could put your business at risk, potentially causing your business to fall behind and ultimately fail.  Implementing IoT solutions offer the opportunity to sustain your business leadership, the ability to scale and create new types of sales/revenues, as well as cost savings.  No matter what the industry, there are partners aplenty eager to help enterprises transform their operations via the extraordinary power of fully deployed IoT systems.

Why implement an IoT solution

While technically complex, the benefits of IoT systems are not mysterious at all. Take agriculture, for instance. IoT can serve any agricultural enterprise from soil to sale, from ranch to register – all the way from farm to family. Let’s take a look at winemaking from beginning to end in order to show how IoT can improve all aspects of a winery operation1 – starting all the way from the soil to final point of sale: Growers can and will be able to monitor and optimize growing conditions by capturing data (e.g., moisture level) from sensors, processing it on the edge gateway, connecting to the cloud for alert conditions and daily aggregated data reports.  Today, a winery in California has begun just that, Hahn Family Wines is leveraging some of these capabilities to help improve their growing conditions and overall operations by using the data collected (about the soil and air) to help provide intelligent and actionable decisions.

Further along in the process, growers can monitor temperature during the fermentation and aging process. Deutsche Telecom in Europe for example is using its LTE IoT networks (ie, Cat M1 or NB-IoT) and sensors to help monitor a wine bottle’s temperature and humidity to ensure quality of the wine no matter where the bottles are stored.  Preserving the quality of the wine means less loss of the product, thereby reducing costs and increasing revenue for the wine distributor.  Additionally, integration with shelf sensors and warehouse staff handhelds means the IoT solutions can also track location of bottled inventory within the warehouse (both empty bottles and those ready to ship to distributors and retailers). Then the system can track both location and environmental conditions during transportation.

And what IoT can offer does not stop there – indeed, there is no reason the vineyard cannot be fully integrated with distributor warehouses (another place where industrial IoT handhelds come into play) and the retailer’s inventory tracking system and the ultimate sale to the consumer at the register.  More opportunities for more, and dare we say, quicker sales along this whole process: for the winery, the distributor, and retail store perhaps?

Everyone and everything benefits

At the store, the retailer’s IoT system can also provide analysis of store traffic and customer shopping behavior – with capabilities such as camera vision and machine learning (e.g. what type of bottle are shoppers reaching for, how often and what is their duration in the wine aisle, consumer demographics, and more) ultimately enabling improved product display as well as better tracking of inventory and shelf management. Companies like RetailNext are already leveraging these types of capabilities to enable stores to track shopping behavior and this can be easily applied to wine selling.  Sensors can also detect out-of-stock status for each SKU and notify store personnel to remedy the situation; retailers can even change prices remotely using smart shelf labels. Smart cash registers and POS devices not only track the sale, but knowing the behaviors of the shopper, can make additional highly personalized offers right at the register.  You can imagine the benefits to this process are many, but mostly the possibility of increasing your business revenues because of the opportunities that open up to create new sales in this scenario.

And then finally, with the sale, the system can trigger notification that inventory is off the shelf and communicate back to the wine maker/distributor that more supply is needed. What winemaker would not like immediate access to which of their vintages are selling best and where? This information can inform decision making for the next growing season all the way out to which vintages are shipped in what quantity and where. 

The benefits to the whole ecosystem

The solution described is highly complex; there is a lot of technology involved. Comprehensive – and this is the whole point of IoT – implementations that will require the tight integration of compute, connectivity and security to be successful could lead to the optimization of one’s business’ overall process and improved decision making which ultimately translates to reduced costs and increased revenue. The possible positive outcomes of implementing are undeniably compelling if a business is to remain ahead of its competition.  

And while complexity may give some pause, business leaders definitely recognize that this type of digital transformation is inexorable. Consider these telling findings from The Hackett Group’s annual Key Issues Study: More than “80% of business leaders [surveyed] agree that enterprise digital transformation will fundamentally change their company’s operating model. Yet less than 40% say their businesses have a strategy or the competencies needed to execute that transformation. This lack of digital confidence is accompanied by heightened anxiety.” [The Hackett Group, “Closing the Digital Transformation Confidence Gap in 2017.”]

Additionally, it’s worth noting that no less than 88% of respondents agreed or strongly agreed that digital will change the way business services will be delivered over the next 3-5 years. And, while more than 65% of respondents said they intended to modernize their business application platform, less than half the respondents indicated plans to implement IoT-based systems in the next 2-3 years.

Oh, but what about security?

Tellingly, participants from the same Hackett Group’s study “ranked cybersecurity as their top business risk” last year. And “fully 67% of organizations anticipate that cyber and information security will be a high business risk within two years’ time, up from just one-third of companies in 2016.” Is security the fly in the IoT ointment? It is a very legitimate concern. In fact, I would argue, it is the paramount issue for the simple reason that the value of IoT for enterprises can only be had when the entire system – in my example from soil to sale – is based on connectivity and computing technologies that are first and foremost security rich.

Even if you find the idea of transforming your enterprise via IoT intimidating, connecting to those partners in your ecosystem that are already heading down the IoT path is your first step. Complete the path and you will discover operational and resource benefits, that will make you glad you did and will create consternation among your slow-footed competitors.

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