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Author's profile photo Don Gordon

New study shows IoT is upending the Consumer Products industry

The massive impact of Internet of Things (IoT) on consumer products is now beyond question, with over 75 billion connected devices expected by 2025. From iPhones to smart home devices like Nest and the Amazon Echo, IoT-enabled devices have captured people’s imaginations and wallets. But our brand-new study reveals the IoT presents massive opportunities to consumer products (CP) companies in ways that are often unseen to consumers.

Earlier this year, SAP conducted an in-depth global survey to find out more. We analyzed data from CP executives in five countries. The individuals surveyed represent all major CP segments – from FMCG to fashion and beyond – and hold positions in many different parts of the business. Here’s a preview of the findings.

A Common Set of Business Challenges Point to IoT

The top business challenge faced by the respondents was raw material cost fluctuation, followed by high logistics costs and shrinking operational margins. High lead time for products and inventory and the slow pace of innovation followed. In short, CP companies share a common concern around lack of agility in core supply chain processes.

The top action called out to deal with these concerns was driving faster reaction to demand and capacity changes, followed by improving product lead time and product quality and compliance. Also high on the list were product innovation and transport efficiencies. The compelling thread here is that each of these challenges resides in a process area where IoT has high potential to drive benefits.

Understanding and Application of IoT Technology

The study revealed a clear divergence between companies with a high level of understanding of IoT, and those that are still struggling to understand what it means for them. Not surprisingly, these groups are on very different paths in terms of current steps to implement IoT.

For example, companies that are leading in IoT – that is, those with a higher degree of clarity on the technology and its uses – are intensively focused on things like IoT management processes, staffing, training, and absorbing the lessons of early IoT movers in the industry. Those lagging are still researching how IoT will affect their business. They lack a solid plan, and that means they’re in real danger of falling behind.

To download the full report, please visit

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