Based on discussions with experts and practitioners, I want to explore the impact of a changing economy on the Internet of Things (IoT). Two areas that are seeing a significant impact are healthcare and supply chain management.
These industries were really at a tipping point prior to the emergence of COVID-19. We are likely going to see this change accelerate out of necessity. These changes really involve digitization of process and greater incorporation of data-driven decision making by IOT and big data analytics.
Digitization may take a short or even a medium-term hit in light of the economic downturn. According to some projections, the world's GDP may decline in Q2 by as much as 24%. For a little perspective, compare that with the worst quarter of the housing crisis in late 2008 in the US, where the economy shrank by about 8.4%.
IoT in Healthcare
Today, Telehealth is really digital communication/video conferencing between a practitioner and a patient. But increasingly over the next couple of years, we're going to see that Telehealth is also going to involve digital diagnostics remotely. A patient can use an IoT-enabled device to gather patient health metrics such as temperature, heart rate, lung function, and then have those patients transmit those metrics via a HIPAA-compliant platform. To a small degree, it is already happening today.
Telehealth was on the increase, but this health care crisis has accelerated its growth. Telemedicine offers reduced cost compared with in-person visits. One survey before 2020 reported a 50% reduction in ER visits and a 90% reduction in hospitalization.
Broadening access for patients is another benefit. Telemedicine is particularly applicable for rural residents who have to travel great distances, but also for the elderly or the very sick.
Another benefit is this contribution of patient data to large data sets, which helps practitioners track and do predictive analysis for conditions like cancer and diabetes. But also today with illnesses like COVID-19.
Telehealth is also prompting this creation of early warning sign tools. Devices like a smart thermometer allow identifying virus hotspots and also the impact of physical distancing—all in real-time.
There are some significant obstacles in the move toward Telehealth that could slow progress:
How to address licensing for remote care
Reimbursement
Security
IoT in Supply Chain Management
We all have witnessed supply chain shortages in stories lately. Electronics manufacturers anticipate about four weeks of supply chain delay, and that's really in stark contrast to what we've come to expect as consumers in having this sort of two-day or less delivery.
Many manufacturers have poor visibility into who they were doing business with. Their tier-one suppliers, their direct suppliers, but also their tier-two and tier-three suppliers. Many are doing a procurement function in Excel, which has sort of limited predictive capabilities.
In the short term, manufacturers are taking some pretty drastic measures and they are trying to get a handle on inventory and demand. They are doing it with some data and mostly manual means. They end up meeting daily, calling suppliers on a regular basis. As a result, they are trying to adapt their sourcing strategies and minimize their risks. They are doing some product redesign to accommodate those new sourcing strategies.
In the long-term, companies are investing in technologies for greater insight. The Product Realization Group (PRG) is helping many companies adopt new technology to get better visibility into inventory risks and demand. Companies are beginning to see this as a must have, not a nice to have.
Companies are also considering new connected products. Some have emerged to help supply chains establish key metrics using AI and machine learning.
In the future, we will see more of a collaborative approach where suppliers and manufacturers share data and insight.
Summary
Healthcare and supply chain management are adopting IoT and that adoption rate is accelerating with COVID-19. How much and when will hinge on economic uncertainty and some of the other factors we have all discussed. We really look forward to continuing to evaluate these industries as we go forward in the IoT world today as the situation unfolds.
