Internet of Things as a tool for Strategic Cost management

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.

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.

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.

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

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.

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.

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.

Overhead Reduction

Using IoT costs can be

minimized for travel of

engineers , marketing,

vehicle transportation,

communication etc.

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.

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.

Thank You

Image Credits : https://www.google.co.inSource : The Management Accountant Journal of the Institute of Cost Accountants Of India