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Global supply chain management could benefit significantly from the adoption of IoT technologies.

Collaborating to Enable IoT in Global Supply Chain ManagementARTICLE

By Karen Lynch

A global collaborative effort is being mounted to ensure the cross-border cohesion of the emerging Internet of Things (IoT), which has the potential to redefine supply chain management. Business and government groups are joining forces to advance international interoperability, cross-border data flow, compatible wireless spectrum, security and liability provisions, and other fundamental technology, policy and legal requirements.

IoT technologies collect and process data in the supply chain using identity chips, sensors, communication devices, cloud computing networks and analytics engines – all working together to fuel automation, continuous feedback and better business decision-making. Using IoT in industry applications, including supply chain management, has the potential to add $10 trillion to $15 trillion to global GDP over the next 20 years, according to the International Chamber of Commerce (ICC).1 Billions of devices are already connected in supply chains and other settings, according to the Alliance for Internet of Things Innovation (AIOTI).2

“Many IoT applications are inherently cross-border in nature,” AIOTI said. Therefore, when developing policies and standards for IoT, “it has to be taken into account that IoT and the use of IoT devices are not limited to national and regional boundaries. Any approach must have an international focus.”

Rio Tinto is often cited as a case study of a pioneering application that illustrates the international nature of IoT supply chain management. The Australian-British multinational mining company collects real-time data from trucks and drills across the world, transmits it for processing in Australia, and adjusts operations for greater efficiency and cost savings.3

Advancing IoT Supply Chain Policies and Standards

Several initiatives to advance IoT policies and standards were featured at the CeBIT international technology trade fair held in March 2017 in Hannover, Germany. Many speakers emphasized the need for free cross-border data flows to enable IoT monitoring and processing for international supply chain management. A Hannover Declaration was signed by Germany’s Federal Ministry for Economic Affairs and Energy with Japan’s Ministry of Economy, Trade and Industry, to recognize the importance of the free flow of data for IoT, promote standardization for IoT security and interoperability, and extend joint efforts to showcase IoT best practices for small and mid-sized enterprises (SMEs).4

Also in Hannover, AIOTI and a Japanese private-public collaboration known as the IoT Acceleration Consortium (ITAC) signed a memorandum of understanding to develop joint policy recommendations and standards adoption.5 ITAC has reached similar agreements in the United States with the Industrial Internet Consortium and the OpenFog Consortium6 – and in India with the National Association of Software and Services Companies.7

International collaboration is a cornerstone of technical standard-setting. The Internet Engineering Task Force (IETF), a well-established global standard-setting body, has been working on IoT for over 10 years.8 “The problem, of course, is that nobody’s willing to give up on the idea of their own ecosystem becoming a widely accepted standard … and so the biggest players in the space focus on their own systems, and development of more open technologies lags behind,” reported the Network World trade magazine.9 However in July 2017, various IoT industry groups and companies addressing different pieces of the IoT technology puzzle gathered in Memphis, Tennessee, to increase cooperation on interoperability. A similar “oneM2M Industry Day” was also to take place in India in September 2017.10

Policies Affecting IoT Supply Chain Management

Policy issues cited by the AIOTI, ICC and others are wide ranging. Beyond data flows and technical standards, some industry groups and policymakers point out the continuing need for compatible spectrum for wireless sensors and other devices. “International spectrum harmonization is vital for a global, affordable cellular IoT market,” the GSM Association telecommunications industry group said in a 2016 positioning document. “Mobile bands that are widely harmonized around the world enable mass market low cost cellular IoT devices by creating a large enough addressable market to support manufacturing economies of scale.”11

Organizations are also focusing on trust and security, given business and consumer sensitivity to security and privacy risks. The Internet of Things Security Foundation has proposed a “supply chain of trust,” for example, to address security in non-technical terms. “In the future world of IoT, many parties will be required to specify, deliver and maintain a multi-verse of systems and their services,” the group said. “Delivering strong, fit-for-purpose, resilient security features goes far beyond the latest encryption and technical standards; it demands that each player in the supply chain recognizes the importance of security and implements it in their business practices in addition to the enabling technology.”12 The AIOTI cited a move toward “trust labels” for hardware, apps, platforms and other IoT elements, akin to energy labels that classify products’ electricity consumption, and advocated a “trust charter” committing to best practice.13

Determining liability may also be complex in IoT settings such as supply chains, given the mesh of various devices, networks, applications, services and owners. Who is responsible in matters of safety, security or privacy? “The answer is often complicated, and in many instances there is not enough case law to support a position,” according to the Internet Society. “Because IoT devices operate in a more complex way than stand-alone products, more complex liability scenarios need to be contemplated.”14

These and other policy and legal issues are being addressed by numerous advocacy groups, in addition to the more technical groups addressing standards and interoperability. In some areas, industry groups suggest that governments let them find solutions to avoid the possibility that regulation could stifle innovation; in others, policymakers are asked to draw on existing policy or legal solutions, or simply wait until there is more experience with IoT to suggest where interventions might be warranted.15 In the area of intellectual property, however, the ICC is encouraging governments to create an appropriate policy framework.16

The Takeaway

Global supply chain management could benefit significantly from the adoption of IoT technologies. But many technology, policy and legal issues require an international approach to ensure cross-border cohesion of a truly global Internet of Things. Public and private sector groups are coming together to meet that challenge.

Karen Lynch - The Author

The Author

Karen Lynch

Karen Lynch is a journalist who has covered global business, technology and policy in New York, Paris and Washington, DC, for more than 30 years. Karen also is a principal at Content Marketing Partners.

Sources

1. “ICC Policy Primer on the Internet of Everything,” International Chamber of Commerce; https://iccwbo.org/publication/icc-policy-primer-on-the-internet-of-everything/
2. “AIOTI Digitization of Industry Policy Recommendations,” Alliance for Internet of Things Innovation; https://aioti-space.org/wp-content/uploads/2017/03/AIOTI-Digitisation-of-Ind-policy-doc-Nov-2016.pdf
3. “Cross-Border Data Flows, Digital Innovation, and Economic Growth,” World Economic Forum; http://www3.weforum.org/docs/GITR2016/WEF_GITR_Chapter1.2_2016.pdf
4. “METI Minister Seko Concluded the Hannover Declaration,” Government of Japan; http://www.meti.go.jp/english/press/2017/0320_002.html#MainContentsArea
5. “Memorandum of Understanding for IoT Cooperation between Japan and the EU Concluded,” Ministry of Economy, Trade and Industry; http://www.meti.go.jp/english/press/2017/0321_005.html
6. “Memorandum of Understanding (MOU) for IoT Cooperation between Japan and the United States Concluded,” Japanese Ministry of Economy, Trade and Industry; http://www.meti.go.jp/english/press/2016/1011_03.html
7. “Memorandum of Understanding for IoT Cooperation between Japan and India Concluded,” Japanese Ministry of Economy, Trade and Industry; http://www.meti.go.jp/english/press/2017/0224_001.html
8. “Internet of Things: Standards and Guidance from the IETF, Internet Society; https://www.internetsociety.org/publications/ietf-journal-april-2016/internet-things-standards-and-guidance-ietf
9. “What is IoT?’ Network World; http://www.networkworld.com/article/3207535/internet-of-things/what-is-iot.html
10. “IoT Standards Groups Emphasized Collaboration at oneM2M Industry Day,” oneM2M; http://www.onem2m.org/news-events/news/151-iot-standards-groups-emphasised-collaboration-at-onem2m-industry-day
11. “Spectrum for the Internet of Things,” GSMA; https://www.gsma.com/spectrum/wp-content/uploads/2017/05/Spectrum-IOT-Position-Paper.pdf
12. “Internet of Things Security Foundation Launches 5 Priority Working Groups,” Internet of Things Security Foundation; https://iotsecurityfoundation.org/press-release-internet-of-things-security-foundation-drives-plan-for-the-supply-chain-of-trust/
13. “AIOTI Digitization of Industry Policy Recommendations,” Alliance for Internet of Things Innovation; https://aioti-space.org/wp-content/uploads/2017/03/AIOTI-Digitisation-of-Ind-policy-doc-Nov-2016.pdf
14. “Policy Brief: The Internet of Things,” Internet Society; http://www.internetsociety.org/policybriefs/iot
15. “Fostering the Advancement of the Internet of Things,” U.S. National Telecommunications and Information Administration; https://www.ntia.doc.gov/files/ntia/publications/iot_green_paper_01122017.pdf
16. “ICC Policy Primer on the Internet of Everything,” International Chamber of Commerce; https://iccwbo.org/publication/icc-policy-primer-on-the-internet-of-everything/

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