Sensor networks can give you greater insight into business operations, but the technology is still in its infancy.
Last year, BP plc, the $233 billion global oil and gas giant, had a big problem on its hands: It was literally losing track of 900 railcars—5 percent of its U.S. oil and gas inventory—every year in the convoluted rail and shipyard systems of the U.S. Each sidelined car cost the company anywhere from $50,000 to $125,000. For years, this was considered a cost of doing business. But P.P. “Daru” Darukhanavala, BP’s vice president and CTO of digital and communications technology, had other ideas. Daru’s team is charged with overseeing a number of pilot programs that test how sensor networks can help BP get smarter about its operations. His solution: to fit each railcar with a network of sensors that not only track where the railcar is at all times, but can also monitor characteristics such as weight, internal temperature and physical impact. The goal is to eliminate losses altogether and create greater efficiencies in transportation logistics.
Sensors are nothing new, of course. You can find them all over—in smoke detectors, home security systems, auto theft devices, even simple thermometers. But unlike RFID chips, which simply store data, sensors actively monitor and collect data on virtually everything from temperature, light and movement, to chemical compounds, wind velocity and pressure. And sensor networks can constantly send information back to a central system for interpretation.
The concept of a sensor network is fairly simple. Take a couple of wireless nodes (a small battery with a radio transmitter, roughly the size of a plum), add a microprocessor, some sensors and a reader (such as a desktop computer, a laptop or even a PDA) to collect the data, and you’ve got a wireless sensor network. But unlike traditional wired networks, which send data from each point back to a central computer, a sensor network works more like a mesh, passing data from unit to unit, creating a kind of sensor force field. Because each sensor requires just a tiny bit of power to transmit its information to the next closest sensor, the mesh network can cover a far greater area without the complexity and cost of stringing wires. And, since the nodes depend on one another to deliver the data back to the hub, the more nodes you add, the stronger the network becomes.
According to Business Communications Co., a Norwalk, Conn., market research firm, the U.S. market for industrial sensors will reach $7.6 billion by 2009. The ZigBee Alliance, a nonprofit consortium of more than 100 companies working to create open global standards for sensor solutions, estimates that there are more than eight billion embedded microprocessors shipped worldwide annually—more than the global population—any one of which could act as part of a network. But at the moment, the vast majority of those microprocessors are not part of any network. Robert Metcalfe, who invented Ethernet and is now chairman of Ember Corp., a developer of sensor networks, estimates that only 2 percent of those eight billion microprocessors are currently networked.
“If you boil it all down, there are two things that every object on the planet shares,” says Accenture Technology Labs Chief Scientist Glover Ferguson, who is based in Chicago. “One is identity; the other is location. Sensors are all about using that information better, but there is more you can learn from them.” Knowing the state of an environment, or even particular piece of equipment the sensor is monitoring, can create huge business opportunities, he says. “Add that to the explosion of wireless communication opportunities, and now we can inexpensively acquire information—temperature, weight, pressure, any attribute you can dream of.” For a hotel owner, this could mean cutting costs on heat and electricity by wiring up hotel rooms that sense when a guest has left his or her room. For manufacturing, it could mean replacing parts in a machine before it breaks down. For firefighters, it could mean locating one another in hazardous situations when radios fail.
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But as with most new technologies, the learning curve is steep. Wireless nodes and sensors are still pricey, leaving the early implementation to those who can afford the initial outlay. Limited battery life means that someone will eventually have to hunt them all down and replace their power supplies; right now the batteries last no longer than a couple of years. And because each node is crucial to the operation of the network, if one goes down, the network can fail. Setting up a stand-alone sensor network isn’t that difficult, but integrating it into your key business systems (such as your supply chain) is no small accomplishment. Additionally, the lack of standards and security measures, as well as some lingering wireless interference issues, can keep data from properly transmitting. All of which means that sensor networks are still in their early days. “Getting the technology right is going to take a long time”—up to ten years, says Martin Reynolds, a vice president at Gartner Inc.
Some executives may balk at the thought of spending millions on a technology that has yet to prove itself in the enterprise, but Darukhanavala’s position on the future of sensor networks is clear: “This technology will transform everything we touch, not just in business but our personal lives as well.”