Of all that the Internet of Things (IoT) promises, manufacturers seem most focused on supply chain efficiency, and with good reason. Under constant pressure to reduce costs and get to market faster, but having limited ways to do so, IoT’s promise of faster, cheaper, and better is alluring.

Getting less attention in IoT discussions is the potential for revenue growth through innovation. Practically speaking, it’s easier to improve an existing operation than to improve things that haven’t yet been imagined.

That vision will get clearer as manufacturers get their IoT sea legs. But how much time is there? Digital native consumers have shown little patience in product also-rans unless they come with a big advantage.


When manufacturers talk about being more competitive, they talk aspirationally about having a more agile supply chain. IoT strategies can help you create a more agile supply chain, but you need to extend that agile mindset to research and development to keep up with today’s consumers.

There are many ways to tap into innovative breakthroughs. UPS has been an IoT pioneer by connecting operations through sensors and scanners, and then studying the data so the company can make improvements. UPS Package Flow Technology, for example, evaluates and optimizes every step in a delivery cycle, from the way a package is routed and tracked to how it’s loaded and then delivered.

The visibility provided by Package Flow Technology then led to breakthrough customer-delivery options like the ability to intercept packages, as well as alternative delivery options provided through the UPS Access Point Network and UPS MyChoice.

Innovation Becomes a Team Sport

The Internet of Things has created the best and worst of times for research and development. On one hand, an influx of attention and funding for digital advancements is an innovator’s dream. On the other hand, the R&D teams of today tend to lack the range of expertise needed to get disruptive products to market.

Specifically, virtual and augmented reality, Bluetooth beacons, RFID—not to mention the growing murmurs about blockchain technology—require companies to open their doors to some surprising collaborators.

Such collaborations were coined “Industrial mash-ups” in a paper by Ernst & Young and Harvard Business Review. Those alliances can come together faster than mergers and acquisitions allow and can “develop new products and services rapidly by piecing together components from an ecosystem of collaborating partners,” the paper found.

Looser alliances also help companies explore new technologies with expert help from each field. All parties win through data and knowledge sharing. For example, UPS has collaborated with Fast Radius and SAP4 to develop a digital-distributed manufacturing network for on-demand 3D printing. A separate UPS collaboration with Cy-Phy Works tests the use of drones for both commercial and humanitarian deliveries.

Smart companies know that to stay on top, they’ll have to be open-minded. Companies owe it to their customers and themselves to get outside of themselves and to catch up with or get ahead of emerging tech.

How to Not Be a Fast Follower

Leaders are understandably wary of IoT when there are still so many unanswered questions. What standards will emerge? What is a realistic return on investment? And perhaps the biggest question of all, where to start?

The hardest step in enterprise initiatives like IoT is often the first one. My simple advice would be to get an extended team around the table and start talking—including R&D, marketing, IT, sales, human resources, and customer service. The next steps will flow from there.

Article by Charlie Covert. A version of this article appeared previously on UPS Longitudes.

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