How IoT Impacts the Supply Chain

Oct 22, 2019

Digiteum Team

iot supply chain

IoT

How IoT Impacts the Supply Chain

IoT is a revolutionary technology for every major industry — including retail, transportation, finance, healthcare, and accounting. The Internet of Things shows its potential to the fullest in processes like supply chain. Management, forecasting, and oversight applications help fleet managers improve the operational efficiency of distribution and add transparency to decision-making.

All areas of the supply chain can be improved with the Internet of Things. In this post, you’ll find out how IoT devices impact the industry and what the applications of the technology are that even a small business can afford.

How IoT Devices Change Supply Chain Management

IoT supply chain

Tracking and monitoring are the main objectives for IoT deployment in supply chain management. The technology allows warehouse and fleet managers to keep track of their cargo and inventory.

However, there’s more to the Internet of Things than its asset management potential. Here are the most prominent effects of the IoT supply chain revolution:

  • Real-time location-tracking. The Internet of Things provides supply chain managers with a coherent stream of real-time data regarding the location of the product and the transportation environment. You will be alerted if the product is shipped in the wrong direction and will be able to monitor the delivery of ready goods and raw materials.
  • Storage condition monitoring. Thanks to environmental sensors, supply chain managers can track the shipment process — the temperature inside the vehicle, pressure, humidity, and other factors that could compromise the product’s integrity.
  • Forecast the movement and the arrival of the product. The amount of detail supply chain managers get thanks to IoT devices improves the quality of decision-making and increases the precision of delivery forecasts. Thanks to real-time tracking, a supply chain IoT company will be able to predict the final delivery date as well as forecast and mitigate risks before they occur.
  • Locate goods in the warehouse. IoT improves the efficiency of warehouse employees, allowing them to spend less time on locating a delivery. Thanks to real-time location trackers, the workers will know the exact aisle for a specific parcel. Combined with artificial intelligence, IoT is a stepping stone for automated vehicles that can retrieve devices with no human supervision. The Internet of Things enables a seamless workflow that is impossible to achieve otherwise.
  • Improve contingency planning. IoT devices help supply chain managers plan routes, taking into account the number of accidents or other delay-inducing occurrences that happened on the highway. The Internet of Things curates all data needed to develop flexible contingency plans and get to the cause of existing delays. The technology offers supply chain managers real-time alerts that increase the speed of risk mitigation.
IoT supply chain

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The Role of IoT for Different Industry Sectors in Supply Chains

Supply chain management is a multi-faceted field. Throughout the delivery, dozens of operations unfold simultaneously and it’s crucial for managers to streamline them. The Internet of Things is the technology that helps build big-picture views and create complex yet functional frameworks for supply chain management.

Here’s how the technology touches upon various aspects of supply chain management — including communication, logistics, and others.

1. Asset management

IoT systems facilitate asset information updates. Instead of logging the data manually into a spreadsheet, a manager can rely on the software to update the status of all assets. On top of that, the Internet of Things improves asset tracking in retail by attaching an RFID tag or a barcode to each item, supply chain managers can get instant access to key insights on each delivery — the contents of the parcel, storage manuals, and so on.

2. Automation

IoT supply chain

The full potential of this technology shows when it comes to managing large warehouses for major retail companies. The Internet of Things supply chain applications empower a connected device that autonomously locates the goods and moves them around the warehouse.

The human-technology convergence in manufacturing and supply chain helps warehouse managers increase the productivity of their workers by engaging them in more complex and demanding tasks.

3. Improved resource management

IoT facility management

The Internet of Things helps reduce the operating costs of supply chain managers by detecting resource leaks. IoT use cases for supply chain offers stakeholders enough data to understand if the company is spending more resources than it’s putting out.

Connected systems help implement the principles of predictive analytics into all stages of supply chain managers, detecting equipment errors before the system shuts down completely. The power of predictive analytics is widely used in healthcare right now — it is the next big thing in supply chain management as well.

By being able to forecast system failures, supply chain and warehouse managers will significantly reduce the machine downtime.

4. Transparency

The Internet of Things improves the efficiency of communication between all parties involved in the logistics cycle. A manager will be able to check if drivers comply with internal policies, if the product is stored the right way, and if there aren’t any delays between the warehouse and the customer’s doorstep.

Having access to real-time location, productivity, and environmental data will help provide the end client with regular delivery status updates, improving the overall satisfaction with the manager.

Benefits of Internet of Things in SCM

With the growing popularity of the Internet of Things in mind, more businesses seek to reap the benefits of the technology in the supply chain. In case you are wondering how IoT can improve your company’s efficiency and reduce operating costs, here’s an overview of its benefits in SCM.

  • Higher speed. Route-planning tools and connected IoT supply chain management platforms increase the overall supply chain speed efficiency exponentially. The Internet of Things shortens the feedback circle, allowing for faster decision-making, helps mitigate delay risks, and improves the efficiency of locating goods within the warehouse.
  • Improved flexibility. Connected platforms are faster and easier to access than the on-premises systems. By building a cloud-based IoT system, a supply chain manager ensures all parties involved in the process will have access to relevant data. On top of that, a connected IoT service will present all collected insights in a way that’s relevant to a particular scenario, helping guide workers every step through the supply chain.
  • Higher accuracy. IoT provides managers with detailed insights on the goods turnover, helping retailers and supply chain managers know how many units of every product should be ordered. The Internet of Things reduces the impact of human error, as well, by helping identify packages and navigating drivers on the road.
  • Improved segmentation. IoT helps sort through data and determine patterns that would indicate the reasons that improve or hinder the profitability of every SDK. The technology helps retailers and supply chain managers segment products with the target audience in mind. Thanks to the Internet of Things, all company stakeholders will have a better understanding of what types of customers are attracted to a product.
  • Increased efficiency. IoT empowers a wide range of connected platforms geared towards employees. Tools like smart glasses help instruct warehouse workers seamlessly to ensure they spend less time completing a task. Also, IoT captures efficiency-related data and brings more awareness into resource and labor management. Thanks to the technology, supply chain managers will ensure all the parties involved in the delivery perform to the best of their ability.

Challenges of Using IoT in Logistic and Supply Chains

IoT supply chain

Despite the growing popularity of digital transformation, most companies still use outdated legacy systems to manage deliveries and track assets. Implementing the Internet of Things into an environment that is the patchwork of the old and the new is challenging for most managers — here’s why:

1. Skill gap

Adjusting to managing connected systems will require intensive training for warehouse workers and vehicle drivers. Explaining the security practices and outlining the guidelines for using corporate platforms is a time-consuming process.

Finding a team skilled enough to design a solution that caters to the company is a challenge on its own, considering the lack of professional IoT training. With the international tech talent shortage in mind, supply chain managers should understand that hiring skilled professionals will be a time-consuming process.

2. Increased data storage challenges

Large data pools are one of the numerous advantages the Internet of Things provides supply chain managers with. However, with that power, comes the responsibility of acquiring enough server power to store and process all the collected data. Company managers will need to develop data governance policies, look for data scientists and analysts to ensure they drive the right conclusions from IoT-based insights.

3. Security threats

Building a secure architecture is another objective supply chain managers have to tackle before fully transitioning all processes to connected platforms. Data processing and storage vulnerabilities can result in outside attacks and leaks, tanking the company’s reputation and increasing the cost of failure.

The good news is, by implementing the concepts of machine learning and cryptographic hardware monitoring, company managers can mitigate outside security threats and access all stored data safely.

4. Connectivity issues

IoT heavily relies on having a stable Internet connection. Since fleet drivers are moving from one location to another, there’s not always a reliable network. As Internet coverage increases and 5G becomes widely available — the connectivity issue is likely to mitigate itself — for now, supply chain managers have to put up with it.

Bandwidth is another issue to keep in mind when implementing IoT in the supply chain. Connected platforms usually consume a lot of bandwidth and require a high-level server farm to operate smoothly.

Examples of IoT in Supply Chain Management

IoT supply chain

Global brands push the frontier in using the Internet of Things for the supply chain management. Here are a few IoT in supply chain examples of how large-scale corporations benefit from IoT on a daily basis:

  • Amazon. Back in 2012, the company acquired connected robots for warehouse management. The main task of automated technology is to identify products by scanning QR-codes on the parcel. By implementing IoT in the warehouse, Amazon uses the human workforce more productively, allowing people to focus on tasks like packing, wrapping, or inventory management.
  • Volvo. The company is using a connected cloud-based system to monitor the shipment of car parts from different countries. Volvo uses the Internet of Things to track vehicle delivery to the corporation’s international suppliers.
  • Nissan. The car manufacturer relies on IoT automation to connect various industrial plants. The company has implemented intelligent warehouse management systems at its factory in Sunderland, UK.
  • New Maersk Line. The Danish shipping company piloted its Remote Container Management System back in 2016 — it monitors the temperature and humidity of the goods in containers, reducing food spoilage and resource waste. The platform monitors sea conditions and improves the precision of weather conditions planning.
IoT supply chain

IoT Supply Chain Development with Digiteum

Recognizing the need for automation and the opportunities digital transformation brings along is a major step towards improving operating efficiency. However, it’s just as important to find a skilled team for IoT solutions implementation.

If you want to streamline your supply chain management, bring more visibility and transparency every step of the way, Digiteum is the right team to be in charge of IoT implementation for your business.

The technologies we use help businesses accomplish these objectives:

  • Collect and process data;
  • Find patterns and build precise predictions with machine learning;
  • Access all collected data in real time.

Our tools support all the common environmental sensors — you’ll be able to track the temperature, humidity, concentration of chemicals and gases in the air, pressure, and other variables.

Conclusion

The Internet of Things has a vast range of IoT applications in supply chain management. It facilitates the tracking and monitoring of goods, brings more transparency to the communication process, and increases the precision of planning.

An IoT-based platform is a great investment for small businesses and large companies alike, as long as you have a clear objective for what you need the technology to accomplish for you. Onboarding a skilled team for the design and development stage is crucial as well. To make sure your IoT solution for supply chain meets the modern tech trends and is fully functional, reach out to Digiteum — an innovative team of software developers.

We’ve designed IoT tools for retail, finance, education, supply chain, and other major industries. Take a look at our portfolio to see the full range of domains and skills Digiteum developers have tackled.

To discuss all the ways IoT can revolutionize supply chain management for your business — leave us a message. We’ll get in touch right away!

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