Visibility + Workforce Shortage = M2M

Monday, March 16, 2009

By Dr. Michael Ogle
Vice President, Educational & Technical Services, Material Handling Industry of America

Be connected. Be informed. Make better decisions. This is always the goal, but usually applies to people. Now it applies to things that are connected together in what is known as Machine to Machine (M2M) communication. M2M enables any device to gather data and take action rather than simply performing a physical function.

M2M is growing due to a collection of three seemingly unconnected trends that are coming together to drive increased automation of facilities:

  • There is a desire to know everything about every resource and item that may be flowing into, is contained within, or is flowing out of the facility (often referred to as visibility).
  • Despite current economic strains providing temporary “relief” due to layoffs, workers are projected to be in short supply for the next ten to twenty years.
  • M2M communication technologies are becoming more capable, faster, easier to implement, and less expensive.

So what do these bullet points have to do with each other? As a group, the trends above point to the development of solutions helping customers and suppliers gather and share information, helping them better deploy their capital and people investments in a variety of material handling and logistics solutions.

The Desire to Know It All
To address the first bullet point, resources need to become smart. Smart is not dumb. This profound statement refers to the ability of things (like machinery or containers) to gather and store information, make decisions, then communicate with other machines or people. In the M2M world, smart usually means Smart Services provided by networks of smart devices. Rather than simply positioning themselves as suppliers of parts and equipment, many companies are becoming “solutions/service providers” to grow and/or maintain profitability.

A well known example of a smart services enabler is Radio Frequency Identification (RFID). The great buzz about RFID was that everything would be tagged and could wirelessly tell us where it was (and has been), what it is doing, and what condition it is in.

If all items in a grocery store were tagged, then the process of shopping, checking out, marketing, and inventory management could be greatly enhanced. You could use smart shopping lists linked to a mobile or home device (phone, iPod, Blackberry, refrigerator, pantry, etc.). There may be no need to stand in a checkout line. Cross-selling of items could be enabled by suggested recipes or what other people have purchased based on the items you already have in your cart. Welcome to the grocery cart or basket as an information appliance.

These are interesting applications for grocery, but the return on investment isn’t quite there yet to tag all items. The only exceptions are for tagging of pallets and cases prior to placement on the store shelf, plus individual items that are regulated and/or high cost.

On the industrial side, what are the similar applications that are being envisioned? Some material handling equipment vendors are already embedding capabilities that allow resources (vehicles, people, pallets, carts, containers, etc.) to be tracked throughout a facility so they may be better utilized.

Operating characteristics of machinery such as noise, vibration, and temperature may be tracked to understand whether components may be about to fail rather than waiting until failure. The smart resources then have the ability to request assistance. They also have the ability to share how they have been treated by recording their journey (such as rough handling) and can tell the supplier or the customer. Smart things open up a whole new class of options for better coordination of material flow with facility resources.

Workforce Shortage
Did you read the title and say, “What workforce shortage? Haven’t you read the news lately?” Current economic challenges aside, the shortage is coming in many forms. The U.S. Bureau of Labor Statistics (BLS) and many other authorities are projecting an impending shortage of trained people due to many demographic changes.

Once we’ve worked through the current recession, most companies will find it increasingly hard to find and retain people. That will lead to automation of not just the more mindless or dangerous jobs, but will increasingly mean that smart devices will be deployed to gather data, make decisions, control equipment actions, then occasionally request human assistance based on exceptions they encounter.

Similar to the grocery store example, the return on investment has yet to cross the line for widespread adoption, but once labor and expertise becomes scarce, the ROI equation can quickly change. People become managers and facilitators of whole groups of machines rather than operators of those machines.

Another impact on people is a desire to trim travel expenses associated with performance of on-site services. The younger X-Generation and the Millenial generation (sometimes called generation Y) are less willing to travel extensively to perform such on-site services. That results in a trend toward more remote monitoring of resources, another sweet spot for M2M.

Projected Growth of M2M
M2M market growth projections have been wildly optimistic for a decade, leading some to doubt if it is ever going to take place. However, like most technologies that need to get past the original hype to steadily grow (think about RFID), successful applications by the first movers will result in increasing adoption by the slower movers, resulting in a tipping point when the pressuring factors identified above meet lower costs of increasingly powerful and affordable M2M solutions.

For M2M, the current projections from a 2009 report by Harbor Research point to growth of intelligent device shipments from 73 million units in 2008 to 430 million units in 2013. As we make our way through an economic period filled with uncertainty, we can’t forget to plan for tomorrow. Get to know more about M2M before your competitors learn how to harness M2M to meet their needs for visible systems.

Further Reading
M2M Magazine
Smart Services Blog
Industry Week: Helping Manufacturing Get Smarter
MHIA Workforce of the Future
Harbor Research