How IoT Continues To Transform Supply Chain Management
The supply chain has been much in the news lately. People who had never before heard the term are now using it in everyday conversation. It’s easy to understand why. Severe and ongoing supply chain disruptions have threatened to tip an already fragile global economy into a full-blown recession. As a result, store shelves have been emptied. Inflation rates are soaring worldwide. Stores, factories, and distributors are shuttering their operations, which serves only to further destabilise the supply chain. But there is hope. Innovations in the Internet of Things (IoT) are promising to transform supply chain management processes, rendering the supply chain more efficient, cost-effective, and reliable than ever.
The Relationship Between the IoT and the Supply Chain
The Internet of Things (IoT) refers to the vast network of internet-connected devices that are used to automate business processes. When used as a tool in the supply chain, IoT devices exhibit immense promise across a wide array of functions, from the continuous monitoring of shipments to the mitigation of risk.
Shipment Tracking
One of the most important capabilities of IoT in the supply chain is the capacity of IoT sensors to track shipments in real-time. This is imperative for more accurately predicting shipping and arrival times. The timeliness and accuracy of shipping status updates mean that warehouse managers, for example, have the information they need to make their loading bays run more efficiently.
Likewise, the ability to continuously track shipments in real-time means that logistics and fleet managers can activate contingency plans in the event of an unexpected delay. This might involve, for instance, the deployment of shipments from alternative hubs should the original shipment be delayed or damaged. The result is a more efficient, reliable, and resilient supply chain, store shelves that remain stocked, and businesses that remain well-supplied and operational.
Product and Inventory Monitoring
IoT devices don’t just provide an unprecedented capacity to track shipments, these devices can also provide comprehensive information on products and inventories. For example, IIoT sensors are increasingly being used in cold chain supply to continuously monitor shipping and warehousing environments.
This includes the ability to assess ambient temperatures and humidity levels to ensure that products are not exposed to damaging shipping or storage conditions. In addition to monitoring environmental conditions, these sensors can automatically send alerts to stakeholders, such as shippers, when conditions reach the danger zone. Many sensors also can trigger a response, such as adjusting “smart” thermostats or dehumidifiers, to maintain the requisite conditions.
The ability to monitor and modify product conditions automatically and/or remotely gives stakeholders an extraordinary ability to avoid inventory losses while optimising quality control.
IoT and Efficiency
Anyone who has ever worked in the supply chain industry understands all too well how complex and convoluted it can be. However, the advent of IoT is rapidly transforming the supply chain by making it more efficient.
This derives from the exceptional capacity of IoT to analyse supply chain processes and identify inefficiencies within the system. This includes, for example, the ability to identify redundancies and superfluities in the supply chain and to recommend corrective actions to spur efficiency.
IoT data analytics can also be used to pinpoint underperforming nodes in the supply chain, enabling decision-makers to formulate evidence-based improvement strategies.
IoT and Risk Management
As shown above, IoT sensors can be used to identify and manage risk across a variety of processes, including responding to shipment delays and preventing inventory losses.
It’s not only in shipping and storage that IoT devices work to manage risk. Indeed, perhaps the greatest benefit of using IoT in supply chain risk management lies in the devices’ predictive capacities. IoT devices were designed to perform a diverse array of data analytics, including analysing inventory management strategies and market conditions to define a future need.
This enables supply chain managers to make data-driven decisions regarding product inventories. Thus, the supply chain manager is better able than ever before to reduce the risk of both inventory shortfalls and surpluses through a combination of external market forecasts and internal customer analysis.
The Takeaway
The supply chain has been a hot topic for years now and for all the wrong reasons. The good news, though, is that innovations in the Internet of Things (IoT) are promising to transform the narrative. Through the advent of technologies that provide real-time updates on shipments and storage, the delays that are today all too common may soon be a thing of the past. Likewise, IoT sensors are protecting products from damage, preventing inventory losses and ensuring product quality. Moreover, the immense capacity of IoT to acquire and analyse supply chain data equips managers to more effectively mitigate risk by rendering the supply chain more efficient and resilient than ever. This means, ultimately, IoT is proving itself to be a powerful ally in the fight against supply chain disruption, regardless of the cause.
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