A lot has been written concerning the Internet of Things (IoT) and how it will impact almost every sector of the economy. However, one of the most exciting effects it will have is in the realm of supply chain management (SCM).
SCM entails providing the right product, at the right place, at the right time, to the right customer. However, it’s not an easy process because it comes with a lot of challenges – transportation hitches, lethargic cargo monitoring, theft, etc. Intel’s Blog shows that close to 30% of perishable produce from the farm doesn’t make it to the table.
Despite the challenges in SCM, it is still possible to increase operational efficiency and provide revenue opportunities. By leveraging edge computing and IoT, organizations can benefit from sense-and-respond feedback systems that enable them to track goods effectively. So, let’s look at seven ways IoT will transform the future of supply chain management.
1. Asset Tracking
Supply chain efficiency is highly dependent on asset tracking. Although tracking barcodes and numbers were the norm in SCM, the introduction of IoT will certainly expedite the process. Moreover, it has the potential to increase the quantity and quality of information available.
By using Radio-frequency identification (RFID) and GPS sensors, organizations can track goods to their exact locations. With the information provided by IoT asset tracking, companies can discover any inefficiencies that would otherwise never come to light. Ultimately, this will help them to get a tighter grip on their quality control processes.
Vehicle manufacturer Volvo uses a connected cloud-based system to track the shipments of its car parts along the supply chain. The company also uses IoT to monitor vehicle delivery to the corporation’s international suppliers.
2. Monitor Storage Conditions
Some goods, such as chemicals and food, need to be stored in ideal conditions. Using specialist IoT devices, companies can monitor the humidity, temperature, and other environmental factors that may not favor the goods in transit.
The sensors can trigger alarms if the conditions breach certain thresholds. They can also provide granular data, such as the time spent in the cargo. Moreover, they provide status updates for items that are either at the risk of damage or damaged while on transit.
In 2017, Maersk piloted the Remote Container Management (RCM) system that enables its fleet to track and relay data such as temperature to the cloud. The system can reduce the number of spoilt goods in transit by updating the shippers on temperature and humidity.
3. Vendor Relations
IoT can significantly change the way contracts are sealed, thereby enhancing productive vendor relations. The data obtained from asset tracking can allow companies to twist their production schedules and recognize the vendor relationships that are financially bleeding them.
Shippers can also specify requirements for product storage and issue warranty claims whenever storage conditions are intolerable. The transparency in the tracking process ensures that all the claims are based on facts and not speculation. Ultimately, higher quality goods translate into better customer relationship management, which increases the customer retention rate.
4. Forecasting and Inventory Management
IoT, through the use of sensors, can provide more accurate accounts of inventory than humans. When the inventory has sensors, it is possible to monitor stock levels and receive instant alerts when the reorder level is attained. Apart from inventory monitoring, the sensors can provide data, which once analyzed, can be used for better planning.
E-commerce giant Amazon is an example of a company that is increasingly using IoT in its inventory management. The retailer has a semi-automated warehouse with WiFi robots to scan QR codes on its products, and with a click of a button, it can track inventory with ease. The warehouse employs over 400 robots who work alongside human workers.
Also, Alibaba launched its fully robotic warehouse in 2018. The smart warehouse has over 700 guided robots that transport parcels and conveys goods to delivery trucks. The full automation of the warehouse has helped the retailer to save much time and undertake error-free deliveries.
Logistics company DHL has also piloted several innovations in its warehouse. The company uses robots, drones, autonomous vehicles, smart glasses, and many more in its operations. With proper visual support, workers can identify products with ease and sort parcels expeditiously. Recently, the company partnered with Cisco to create a platform that would facilitate real-time supply chain monitoring.
5. Connected Fleets
Fleet management can be very cumbersome, especially during bad weather periods and peak seasons, when goods on transit are many. To get a picture of the challenges of fleet management, consider what DHL or FedEx drivers go through before making deliveries. Variables such as weather, traffic congestion, and sickness can all determine the time it takes for a package to reach the customer.
Through the use of IoT, such delays can be limited by using maintenance schedules for the fleet. Also, it can ensure that you have adequate carriers to facilitate seamless cargo movement. Any roadside breakdowns of the fleet can be tracked, enabling faster repairs for timely deliveries to the customers. Soon we will witness a widespread usage of self-driving vehicles, and logistics companies will leverage them to their advantage.
Tyre manufacturer Continental Tire uses an IoT-enabled tire monitoring platform for commercial fleets. The system sends alerts if tire pressure varies from its defined value. Using the information shared, fleets can minimize the number of breakdowns and increase a vehicle’s uptime.
6. Predictive Analytics
Predictive analytics helps several companies to create effective business development strategies, make smart business decisions, and manage risks. IoT can provide businesses with predictive analytics solutions to be used for route and delivery planning and to identify any defects before damage occurs. Manufacturers can use smart sensors on their manufacturing floors to manage predictive and planned maintenance, preventing downtime and its associated costs.
Continental Tire is an example of a company that has a connected floor. To solve the problem of misplaced components within its vast plant environments, it resorted to using IoT. It has WiFi sensors placed on carriers and then integrated with stock management systems. The system enables workers to view individual carrier locations from their mobile devices.
7. Transparent Marketing
In earlier days, consumers were unconcerned about the origins of the products and how they made it to the store. Nowadays, health consciousness, coupled with human rights concerns, has made everyone sensitive. IoT, coupled with blockchain technology, will enable brands to show their consumers their ethical and responsible sourcing.
With IoT, companies can exhibit their supply chain processes with transparency, enabling consumers to build trust in brands. Companies eager to appeal to the socially and health-conscious client base can rely on the technology to demonstrate their brand values.