Can a Watch Change the World?

How Apple's future-facing watch could have ripple effects far beyond tech

Since the launch of the Apple Watch with much fanfare this month, there’s been a lot of talk about how the device will carve out a viable niche in the consumer electronics market.

Another, potentially bigger picture talking point is how Apple’s latest gizmo has the potential to spur significant growth in the ecosystem of apps that surrounds mobile devices. The growth of this technology has major implications for product supply chains.

Innovations such as the Apple Watch change the way consumers interact with products and services markets. Companies will have to respond to these changes, and be ready to take advantage of new business opportunities.

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Changes in a person’s health might trigger the delivery of new medications — or alert emergency responders.

In addition to connecting users to their iPhones, Apple’s innovation offers a number of features including a fitness monitor, the ability to make mobile payments, and a facility for linking with home automation devices such as smart thermostats.

But the number of apps is expected to explode over the next few years as developers focus their creative energies on the device. Also, Apple has become more amenable to external partnerships.

The company is “hoping to entice other firms to contribute to its ecosystem and make it more attractive,” said The Economist recently[1]. Apple has partnered with IBM and made it easier for outside developers to create apps for its iPhone, points out The Economist.

The possibilities for the Apple Watch and its competitors could be limitless, so let’s take just one example: richer health monitoring features. More sophisticated sensors could track the wearer’s vital signs and transmit the data to physicians and other designated support services.

Significant changes in the person’s health regime might trigger the delivery of new medications, or in extreme cases alert emergency responders.

Supply chains will have to be responsive to these demand signals.

If the personal monitor indicates that new medications are urgently required, for instance, then after being validated by a qualified health care professional the drugs can be automatically ordered and delivered to a home location.

Alternatively, the alert can go to a care giver who will order the medication while at work or in another part of the globe.

These events create opportunities for companies that are able to provide the right type of support services, and not necessarily ones that are already in the business. Perhaps third-party logistics companies such as FedEx or UPS could compete for a share of the market.

If this seems like a stretch think about what is required: an efficient, far-reaching distribution network, a fleet of conveyances, quick response fulfillment systems, a dedicated work force, and a high level of customer trust.

The latter is particularly important because it can’t simply be bought off the shelf. These enterprises already possess other, less obvious HR resources.

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Developments will require 3PLs to hire and train a driver based on her ability to interact with the customer/patient, rather than her driving performance.

For example, it is not widely known that UPS employs pharmacists in its primary logistics hubs where pharmaceuticals are distributed (a future post will look at the varied skills sets that reside in logistics clusters, meanwhile, there is more information in my book Logistics Clusters: Delivering Value and Driving Growth).

Of course, FedEx and UPS would need to tweak their business models. And this might fly in the face of existing strategies to eliminate as much manual work as possible and increase automation.

In order to offer these healthcare support services, the companies would need to employ drivers with the appropriate interpersonal and trust-building skills.

Looking further ahead, technological advances could change the mix of skills needed to serve the market. Consider, for example the possible introduction of driverless package vans and robot-assisted deliveries from the package car to the home.

These developments would require UPS and FedEx to hire and train a driver based on her ability to interact with the customer/patient, rather than her driving performance and the speed at which she can get the package to the customer’s door.

The broader point is that devices such as the Apple Watch accelerate the development of apps that push the technology into areas that we can only imagine today. In addition, they also change communications and social interactions protocols.

Twenty years ago only an exceptional visionary could picture people constantly peering into a small, handheld screen to communicate with their friends and peers.

The Apple Watch is the latest in a line of ground-breaking gizmos that are redefining the competitive and social landscape. These devices are more than fashion accessories or toys for geeks; they represent the future shape of businesses and their supporting supply chains. goldbrown2

This article appeared on October 9, 2014 on the Supply Chain @ MIT blog and was first published as a Linkedin Influencer post. Republished with permission.

Yossi Sheffi is the Elisha Gray II Prof. of Engineering Systems at MIT, where he serves as Director of the Center for Transportation and Logistics.

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