Extending IT with M2M:

DRM: extending CRM?

To take one example, device management or, more interestingly, DRM (Device Relationship Management) is particularly being promoted by Axeda (formerly eMation, which coined the term) and Questra. One objective of this is to drive CRM to new heights by being able to closely monitor the equipment working in the field that customers have purchased and take appropriate support action depending on the circumstances.

The premise is that virtually all devices today, made “intelligent” through embedded, processor-based control technology like Motorola’s DigitalDNA, contain a lot of information that if captured and used can provide significant business value to the companies that manufacture, service or use them. If these devices can then communicate – connected either wirelessly or by wires, then via the Internet - they can give information like when they are malfunctioning, out of spec or about to fail, and perhaps even report what the specific problem is. They can inform when they’re out of raw materials, how many times they’re used in a week, when they’re used most and possibly by whom, what output is generated and what features are most popular or least used. Such systems can then be integrated with other enterprise systems, in particular CRM, to enhance the value of those systems by feeding them with a continuous flow of real-time information collected from the customer’s devices deployed and working in the field.

What value does this offer? According to Axeda, those doing the monitoring can then:

Some of this has evidently already been delivered in practice. One early example is “a large supplier of medical equipment”, which can now predict weeks in advance when a customer's vacuum pump will need to be replaced. In the past, replacing such pumps involved emergency service visits, at a minimum cost of $500 per visit. Now visits can be planned to optimise usage safely and at lower cost. One can envisage such a service even being applied at some stage to a whole range of domestic appliances, such as washing machines, tumble driers, fridges and freezers.

Merging bits and atoms

A more radical view of the likely impact comes from a new RFID (Radio Frequency Identification) technology currently being developed. RFID is an automatic data capture technology that comprises small data-carrying tokens ("tags"), and fixed or mobile scanners ("readers"). Tags are either attached to or embedded in objects to be identified. Readers may be installed at locations where data capture is required, and may also be in the form of portable readers. Data captured from tags is transferred between distributed readers and a host environment using either wired or wireless communication as appropriate. Readers and tags communicate using low power radio frequency (RF)signals, with tags typically being based on a custom designed silicon integrated circuit. Data may be read from and written to tags by readers so, through the application of RFID, items can be tracked automatically and without human intervention - minimizing time involved in identification processes and with high integrity of data capture.

To date, RFID tags (at about 50 cents each) have been pretty expensive compared with, say, bar codes (at about 1 cent each). That means they haven’t been used extensively - they tend to be used in limited, proprietary situations. Bar codes, on the other hand, need to be in line-of-sight, scanned individually and usually manually, so typically are used only in manual operations in retail – at the check-outs.

All this may be about to change, though. Auto-ID Center, an industry-funded research program based at MIT and the Institute of Manufacturing in Cambridge (UK), is working with over 40 corporate sponsors including Proctor & Gamble, Philips, Pepsi, Gillette, Sara Lee and Tesco to introduce a new tag. Ultimately the cost target for this is less than 5 cents. With literally trillions of possible identification numbers in the range, using this version of RFID would mean that many items could be read all at once without being in line-of-sight. A whole shelf-full or even lorry-load. Consequently, they could be used to identify items throughout the value chain, from raw material through finished product shipped to customer and then on to disposal. In other words, completely aligning the ‘bits’ of the monitoring/control process with the ‘atoms’ of the physical objects being monitored.

The implication is that the whole value chain can then be tracked and controlled, with shocks further down the supply chain (especially at the retail level) being reflected rapidly throughout all other levels. This is the basis for what is being referred to as ‘adaptive supply chain networks’ – something that SAP (also an Auto-ID Center sponsor) in particular is now pushing strongly as an extension to SCM. Huge savings are forecast.

Getting pervasive?

Looking elsewhere, John Deere is getting in on the act by installing GPS systems on its harvesters. As a result, the company can now determine how successful farmers are at harvesting a few square meters of farmland.

Even cattlemen are beginning to implant chips and transmitters in their herds to keep track of their whereabouts via GPS. Dog owners too are apparently paying for a similar service – in the US at least.

Service companies too are experimenting. US-based Progressive Insurance is now selling individuals car insurance with a deep discount if customers allow the company to monitor their driving via GPS and a radio link. In many cases, it seems individuals are willing to trade privacy for a lower rate.

Progressive knows how fast their customers travel, how quickly they accelerate and how quickly they stop. What they’ve found though is that the number one indicator of accidents is not age, not male versus female, nor smoking while driving. It's simply how hard drivers apply the brakes. The rationale is that drivers who on average stop very quickly by leaning on the brakes get into more accidents. If Progressive knows that, they can come back and educate the user and tell him/her they have a dramatically high probability of getting into an accident. They can self teach their consumers and maybe even incentivize  them with lower rates when they see this performance.

The market has been trying for a while to come to terms with the meaning of ‘pervasive computing’, without really quite knowing how to get there. It looks like M2M may provide the answer.

 © e-principles 2002

Robin Duke-Woolley

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