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.

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
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Source : The Management Accountant Journal of the
Institute of Cost Accountants Of India