IoT a tool for Cost Management
The document discusses how Internet of Things (IoT) can be used as a tool for strategic cost management. IoT connects physical devices through networks and collects real-time data in a cost-effective way. This data can then be analyzed using big data and analytics tools to make decisions that help manage inventory, reduce breakdowns, and optimize supply chains. Specifically, IoT allows for remote monitoring of inventory, energy consumption, equipment, employees, and facilities. This helps reduce costs associated with travel, transportation, and maintenance while improving safety, productivity and the environment. The use of IoT is expected to lead to one-person factories, self-driving vehicles, and smart buildings and systems, further reducing operational expenses for businesses.
IoT a tool for Cost Management
- 1. Internet of Things as a tool for Strategic Cost management
- 2. People Process Things Internet Data Leveraging information for analytical decision Leveraging information for analytical decision Delivering the right information to the right machine or person Physical devices such as sensors, machines , mobiles etc. The Internet of Things Connecting physical objects through networks. Network of internet or network enabled objects connecting the unconnected. Creates link between people , process and data.
- 3. The Industrial Internet of Things Data collected real time in a cost effective manner with accuracy. Using big data and data analytical tools to take decisions on inventory, breakdown , supply chain. It encompasses across multiple industries.
- 4. Strategic Cost Management with IoT Helps in managing overall costs of an organization to create competitive edge. Better value to customers at lower cost than competitors.
- 5. Inventory Management Using IOT high value items can be tracked from remote location. Automated alerts ensure timely action. Inventory sensors help in automatic reorder of stocks. Stock out warning sent to mobile phones
- 6. Energy monitoring Placing smart energy meters at high energy consumption points alert management about power consumption , outage etc. With IoT idle equipment and lights can be switched off remotely through mobile phones.
- 7. Connecting to shop floor IoT helps connecting to shop floor. Cxo’s can monitor shop floor remotely real time . Temperatures , parameters of air flow , humidity , cooling etc. can be monitored and correction action can be initiated.
- 8. Equipment and Employee Monitoring Companies used to send engineers onsite for repairs of products/machinery. With IoT equipment can be connected to internet and data which the engineers can access and provide remote solutions.
- 9. Overhead Reduction Using IoT costs can be minimized for travel of engineers , marketing, vehicle transportation, communication etc.
- 10. Safety Health and Environment Connecting to internet helps in viewing traffic flow and take routes which would save time and fuel. Businesses can use sensors to measure air quality , temperature and environmental parameters. Owners can track access to buildings and facilities sitting at corporate office.
- 11. Advent of a new Era With the advent of IoT future is towards one man factory , self driven vehicles, autonomous cars , guard less surveillance, smart buildings, smart parking. These would lead to reduction in operating costs for the business. IoT is the way to achieve Strategic Cost Management.
- 12. Thank You Image Credits : https://www.google.co.in Source : The Management Accountant Journal of the Institute of Cost Accountants Of India