Why the IoT Is a Tool for Continuous Improvement

Consider how Amazon defines continuous improvement, and the role that Internet of Things technologies can play in that mission, to illuminate your firm's path into the IoT.
By John Rossman
Nov 11, 2016

Connected devices, wearables, cloud computing, sensors, machine learning and algorithms are all capabilities and technologies transforming business and society. These are the core components enabling the Internet of Things, which economist and author Michael Porter claims is the backbone for a third wave of technology-led innovation and digital disruption.

Recently, I released a book titled The Amazon Way on IoT: 10 Principles from the World's Leading Internet of Things Strategies, the second in my The Amazon Way series. The book guides readers through the maze of emerging IoT technologies, customer experiences and business models to help them develop a recipe right for their organization.

The Amazon Way on IoT is for business leaders looking to understand how the Internet of Things is transforming business and society, and how they might reinvent their own business. Readers will discover business cases, key concepts, technologies and tools to help them develop, explain and execute their own IoT approach by understanding the sophisticated IoT technologies and strategies of Amazon and other leading companies. An excerpt of the book is available here.

Connected devices are a powerful enabler for monitoring and improving your operations to make your company more efficient, competitive and profitable.

Amazon's employee evaluation process is built on a standard that tracks each worker's commitment to continuous improvement. An exemplary employee "always looks for ways to make Amazon.com better," the standard reads. He or she also "makes decisions for long-term success. Investigates and takes action to meet customers' current and future needs. [Is] not afraid to suggest bold ideas and goals. Demonstrates boldness and courage to try new approaches."

Of course, Amazon is just one of many companies that focus on continuous improvement. You are likely at least familiar with one or more business methodologies built on the concept of continuous improvement:

Lean—the philosophy of creating more customer value with fewer resources
Toyota Production System—a management approach intent on eliminating all waste, which includes key strategies such as "just in time" inventory and demand signals
Statistical Process Control (SPC)—a system of attaining and maintaining quality through statistical tools that emphasizes root-cause elimination of variation
ISO 9000 Quality Management—a set of quality-certification standards based on eight management principles, including continuous improvement and fact-based decision making
Six Sigma—a data-driven methodology for eliminating defects, reducing costs, and eliminating waste

All of these strategies empower employees at the companies that use them to gather data, and to act on the insights that information provides. They are encouraged to drive change and improvement from within. But each of these strategies was also created before the IoT.

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