IoT in Supply Chain

 Digital technology continues to expand at a rapid fire pace. Executives who are able to understand and apply these new technologies to their business gain an enormous competitive edge over the competition. I have witnessed this first hand. Starting my career as a technical professional provided me with early insight into how technology affects business. It was my job to understand and communicate the benefits of new technologies to decision makers.

As my career grew from technical profession into more executive roles, this experience has proved invaluable. I have seen many of my C-level business associates struggle with understanding the correlation between technology and business outcomes. This is especially true with one of the most important innovations to impact the supply chain industry, the Internet of Things.

The Internet of Things (IoT) connects our physical world to the Internet, giving us access to unlimited information about our devices. Location, temperature, speed, any information that can be tracked through sensors is suddenly available at our fingertips. Consumers have seen this technological revolution within their own homes with the invention of smart thermostats, connected kitchen appliances, and even electric toothbrushes enhanced with a personalized brushing app.

While IoT becomes more commonplace in homes and the consumer industry, supply chain business owners are positioning themselves to integrate IoT into their own businesses. IoT will give early adopters a competitive edge over other companies as better insight to their supply chain leads to an increase in both operation efficiency and revenue. 70% of manufacturing and retail businesses have already begun overhauling their systems to adopt IoT technology, according to a survey from GT Nexus and Capgemini. Here are some key ways in which IoT has the potential to revolutionize the supply chain.

1. Fleet Management

Managing a fleet of vehicles is a monumental task, so it is no surprise that business owners are turning to technology for help. Software that connects vehicles with GPS to provide real time data on location and operation is already transforming the industry. Imagine having the ability to pull data from an entire fleet of vehicles and use this data to determine the optimal operation speeds and patterns for maximum productivity. IoT allows fleet managers to identify inefficiencies through information pulled from their connected vehicles. As fleet management software continues to develop, supply chain managers will increasingly have a more holistic understanding of their fleet, facilitating smarter decision-making that improves overall efficiency while reducing costs.

2. Asset Tracking and Inventory

Asset Tracking is not a new concept in supply chain, but it is about to get a big upgrade. For decades vendors have used barcodes and scanners to track their inventory location. This is a tedious and error-prone process that requires items to be scanned with each location change.

With IoT, each item in inventory can be configured with a sensor programmed to send real-time data about the item’s location and status. Through GPS, location tracking becomes automatic, removing the need for manually scanning inventory. IoT jumps beyond scanning systems to track more than just location to oversee additional factors. Medicine is one example. Many medicines begin to degrade in the heat, and must be kept below a maximum temperature at all times. A medical related supply chain could apply IoT to track temperature sensitive inventory and provide an alert if temperatures rise too close to the authorized limits. Temperature data can even be recorded and stored, giving supply chain managers a completely new insights into their inventory’s history.

3. Equipment Maintenance

Machinery and vehicles are at the heart of any supply chain. Without this equipment to build and transport items the supply chain would cease to exist. Businesses work hard to proactively keep their machines healthy with procedures such as preventative maintenance. While these practices are less costly than equipment failure, preventative maintenance still requires considerable down time and planning. IoT has the power to simplify this complex and costly process by connecting machinery and vehicles to sensors that will detect issues before they even occur. This will decrease the frequency of both preventative maintenance and failure.

4. Forecasting

As many supply chain business owners know, forecasting can be the most complex component of any business.  With so many moving parts, predicting inventory needs and customer demands seem like a nearly impossible task. Supply chain managers require data in order to make smart decisions, and IoT has the power to provide these decision-makers with data on anything in the physical world. This is where IoT has the potential to make the biggest impact. The aggregate data IoT provides about various aspects of the supply chain can be analyzed to provide insights to guide business forecasting.

The Internet of Things makes the unknown known, by connecting our devices to the Internet. Fleet management, asset tracking, equipment maintenance, and forecasting are just a few ways in which IoT will revolutionize the supply chain. With access to more data than ever before, supply chain owners gain new insight into their business which empowers them to make smarter and more efficient decisions.

Resources

How IoT Reinvents Supply Chain Management - Rae Steinbach, Data Science

How IoT will Impact the Supply Chain - Daniel Newman, Forbes

The Internet of Things (IoT) and it’s Impact on Supply Chain Visibility - Zete’s