Enhancing Supply Chain Management with Internet of Things (IoT)

The next-generation of IoT technology has the potential to enhance the effectiveness of supply chain operations and increase transparency, efficiency, and accountability.

Introduction

After the end of the world wars, as innovation and industrialization slowed down, the world saw the rise of computers and digital technology, the coming of the Information Age. This was the third industrial revolution, or the Digital Revolution. As computers developed further, there was an increase in its reliance in production lines, which in turn helped increase industry productivity in general. The rapid digitization and its use in industrialization marked a period of great economic growth.

Delivery logistics are being significantly impacted by the digital revolution, just as every other sector of the industry. The Internet of Things (IoT), which powers mobile computing, analytics, and cloud services, is transforming how delivery and fulfilment businesses run their operations. According to McKinsey & Co, by 2025, IoT is going to have an inclusive potential global economic impact from anywhere between $3.9 trillion to $11.1 trillion a year.?

With technology developing at a break-neck speed, we are currently in the middle of the fourth industrial revolution, or Industry 4.0, which also marks the beginning of the Imagination Age. This era saw the rise of the internet, and with that Big Data, Cloud Computing, Internet of Things (IoT), Machine Learning, and Artificial Intelligence, among many other things, have started to gain a lot of mainstream attention, including use in the industrialization process. With such technology becoming common, the industry has quickly shifted towards automation and the use of data exchange in manufacturing technology.

Our focus in particular is on the Internet of Things and how it can enhance supply chain management.

What Does Supply Chain Management Entail?

Supply Chain Management entails the entire process right from handling of a good or services, their full manufacturing flow, from the raw materials to the delivery of the finished product to the customer. A business establishes a network of suppliers to transfer the product from raw material suppliers to businesses that interact with customers directly.

The Supply Chain is the most evident "face" of the company to its customers. The better and more effective a company’s supply chain management is, the better it protects its business reputation and long-term sustainability.

What is the Internet of Things (IoT)?

The Internet of Things (IoT) is a network of physically connected objects that can send, receive, and exchange data. In most cases, data or Wi-Fi networks are used to connect IoT devices to computer systems.

IoT devices use sensors to measure a variety of environmental variables, such as location, temperature, humidity, light levels, movement, handling, and movement speed. The form factors of IoT devices vary, and they include RFID chips, smart gadgets, and mobile sensors.

We are all aware of smart home automation technology, one of the most mainstream applications of IoT. IoT has huge applications in various industries, such as healthcare systems, military, manufacturing, agriculture, etc.

IoT devices have revolutionized supply chain management or SCM. It’s much effortless to understand where goods are, how they are being stored and when they can be expected at a specific location.

How Can IoT Transform Supply Chain Management?

?Monitoring Storage Conditions

-?????????Different raw materials and products require different storage conditions.

-?????????IoT Integrated devices can monitor storage conditions locally (local temperature, humidity, etc) and create alerts based on changes to these conditions.

-?????????Such devices help in dealing with such problems faster and helps in maintaining the quality of products.

Efficient Inventory Management

-?????????Using RFID or similar tagging systems and sensors can keep track of inventory automatically.

-?????????They can also be integrated with mixed reality technologies, like Microsoft Hololens, to keep track of location of goods in a warehouse more efficiently.

-?????????82% of store executives expressed anxiety about shortages during the 2021 Christmas season, and 55% have made plans to switch to alternative suppliers. It could be challenging to complete this process quickly enough to satisfy the increased demand of the season using traditional inventory management. When their inventory reached a certain level, retail outlets may use IoT technology to rapidly send orders to distribution facilities.

Location Tracking

-?????????GPS technology can help keep track of the location of goods

-?????????Can be used to calculate more efficient routes

-?????????Can be integrated with inventory management

-?????????Can be used to verify the position of goods

-?????????Can help with issues regarding dislocation of goods along the supply chain.

-?????????Provide real-time shipment tracking instead of relying on specific checkpoints.

-?????????Can be used to forecast product movement.

Benefits of IoT in Supply Chain Management

Contingency Planning

-?????????All data collected can be used to develop flexible contingency plans in case of errors and failures.

Increased Speed, Efficiency And Accuracy

-?????????Smart route management, real-time inventory management, and real-time tracking increases the accuracy and efficiency of handling goods.

-?????????Data sharing can be much easier, leading to the relevant people being in the know and can solve problems faster.

Automation And Reduced Labour Costs

Use of IoT can automate things that otherwise require manpower. IoT is poised to comprise more than 22 billion devices by 2025 and over the past decade, especially in the last few years, IoT has become one of the most crucial tools of modern technology.

Office buildings can also be made more efficient through automating their functionality in terms of environmental requirements such as lighting, humidity control, and more.

In factories where manufacturers automate maintenance reporting and diagnostics, the combined solution of automation and IoT can provide information on each aspect of the manufacturing process to reduce accidents and increase efficiency. IoT and automation can work together to power?security systems.?

IoT technology is here to reduce human-to-human or human-to-computer interactions. That approach helps not only reduce costs associated with personnel but also eliminate possible flaws and mistakes.??

Challenges Of IoT In Supply Chain Management

Data Storage Challenges

-?????????Cloud storage might not be reliable and on-site/off-site storage of data require additional infrastructure and labour.

Skill Gap

-?????????Workforces might not have the knowledge or skills to adapt to rapid technology development.

-?????????Requires extensive training of warehouse workers and drivers.

Security Issues

-?????????Data management and storage isn’t leak-proof. Can be vulnerable to attacks or leaks.

Connectivity

-?????????IoT requires reliable network connectivity, which might not be available at all times during transportation.

Let’s Quickly Take A Look At Some Real World Use-cases In The SCM Scenario

-?????????IoT devices can be used by farmers to monitor soil moisture and select the best time for planting or harvesting.

-?????????IoT-enabled cameras can help manufacturers find flaws in their goods and reject them.

-?????????By monitoring and sounding an alarm if raw materials are exposed to high temperatures, chemical manufacturers can ensure that the materials remain secure.

-?????????Manufacturers can benefit from "just-in-time" production by getting ready to make things as soon as they are expected.

-?????????To guarantee that products arrive at stores in the best possible condition, food retailers can keep an eye on the temperature and humidity of commodities in storage.

-?????????Retailers may follow products as they travel to distribution facilities by working with specialised logistics fleets.

Here Are My Concluding Thoughts

Understanding how technology has affected supply chain management and the Internet of Things in manufacturing today can provide us a glimpse of future developments. The current nexus of IoT and supply chain management solutions is not new; rather, it is the latest development in a long line of technological advances that have steadily advanced the sector up to this point.

However, the step that many businesses are taking to connect their Internet of Things (IoT) devices to centralised management platforms is expected to significantly enhance the state and performance of the international supply chains that every industry depends on.

Also, when we talk about supply chain management, we cannot miss out on talking about warehouses and the very critical role they play in SCM.

Customers may never be aware of the warehouse component of the SCM because it is not a customer-facing activity, yet without it, their shopping experiences would be negatively impacted.

Sales of online goods are increasing at a never-before-seen velocity. People are now using online purchasing for even the most basic needs due to the growing pandemic.

This suggests that processes need to be streamlined so that business leaders may reduce returns while also avoiding mistakes, accelerating the delivery process, and maintaining the regular intake of inventory. If one can't give their consumers an exceptional level of service in the face of increased competition, it will be quite challenging. A completely functional & properly organized warehouse with optimum resources can help one achieve this.

I will be talking about this aspect in greater?