Can IoT Make Supply Chains More Sustainable?

Posted by Advanced Mobile Group on Jan 20, 2023 8:00:00 AM


As a business, focusing on sustainability has never been more important. There is increasing pressure for companies to be as green as possible while also remaining efficient and cost-effective. These demands are not only coming from consumers, but workers, shareholders, and the government as well. Fortunately, technology like the internet of things (IoT) can help businesses and supply chains be more sustainable.

The Drive for More Sustainable Supply Chains

230124-can-iot-make-supply-chains-more-sustainable-1Supply chains can have a direct and massive impact on the environment, society, and your business’s financial results. One vital aspect of supply chain sustainability is the carbon footprint, which is the amount of greenhouse gasses a business emits during a specific period. The carbon footprint of a product’s supply chain can include emissions from raw materials, manufacturing, transportation, and storage. 

If we want to save the planet, one of the ways is to change the way goods move around it. We can do this by creating more sustainable supply chains. In a 2021 study, researchers from SAP and Oxford Economics wrote, “The moment for setting small-scale sustainability goals has passed. For companies across sectors around the world, creating and maintaining green supply chains is an increasingly urgent priority.”

Aside from doing the right thing and playing to consumer preferences, evidence suggests that focusing on sustainability can even be profitable. According to research from McKinsey & Company, companies with high ratings for social and environmental factors have a lower cost of equity and debt and outperform the market in both the medium and long-term. 

What is the Internet of Things (IoT)

The Internet of Things (IoT) is a collection of interconnected physical devices that monitor, exchange data, and deliver alerts. IoT devices are generally connected to computers via WiFi or data networks. They use sensors to measure and report things like temperature, movement, location, humidity, and more. 

IoT devices come in a variety of forms, including RFID tags, mobile sensors, and smart devices. In the supply chain, one of the most frequently used IoT devices is RFID tags, which can deliver real-time asset tracking, monitoring, and alerts that help minimize disruptions and streamline operations. 

Can IoT Make Supply Chains More Sustainable?

Thanks to technology, there’s never been a better time for businesses to actively pursue the goal of more sustainability. The rise of IoT solutions has created new opportunities to detect, track, analyze, and manage a supply chain’s carbon footprint. Here are some of the ways IoT is making supply chains more sustainable. 

Improved Efficiency in Manufacturing

The last thing a manufacturer wants is unproductive downtime. When resources aren’t being allocated efficiently, this leads to higher costs and tons of waste. When manufacturers use IoT technology, they can better predict and adjust to possible manufacturing bottlenecks like delayed supply shipments or worker shortages. 

A manufacturer isn’t being green if they are using antiquated equipment or producing tons of waste. IoT sensors can be used to run more environmentally-friendly manufacturing operations. For example, a manufacturer can use IoT sensors to optimize HVAC service and lighting in a large factory. They can also use sensors to detect when a piece of machinery isn’t working efficiently so that it can be serviced before it causes unnecessary downtime. 

Better Fuel Efficiency for Logistics Operations

230124-can-iot-make-supply-chains-more-sustainable-2It’s not cheap to move items from Point A to Point B. On average, it now costs more than $1,000 to fill up an 18-wheeler with diesel fuel. And those trucks leave quite the carbon footprint with an average of just 5.6 mpg. Businesses also move goods via freighters, planes, and trains. When these various vehicles are moving goods through the supply chain, transit routes need to be as efficient as possible. 

Using IoT technology, trucks can be re-routed to take advantage of better road or weather conditions. Likewise, the right IoT solutions can choose the best freight carriers and routes to reduce the time in transit and save energy. Even in a warehouse, IoT sensors can make forklifts and other operations more efficient and profitable. 

Reduction in Spoiled Goods

The food supply chain is unique in that it often deals with perishable goods. Food spoilage is a significant and costly issue in a world where consumers want the freshest products, and producers are struggling to maximize profits. 

Using IoT sensors on trucks, shipping containers, and individual products, the food supply chain can keep track of what items must be delivered by what data, as well as things like temperature and humidity levels. This technology can not only reduce the instances of spoiled goods but also prevent serious outbreaks like Listeria caused by the lack of traceability in infected goods. 

More Accurate Forecasting (Less Waste)

www.advancedmobilegroup.comhubfs20221213221213-what-the-pandemic-taught-us-about-supply-chainsBusinesses thrive and grow based on their ability to accurately forecast and meet demand. Fortunately, supply chain participants can be more sustainable and successful at the same time using IoT technology to improve forecasting. 

First, forecasting using IoT data helps businesses more accurately plan for the correct inventory levels, which drastically reduces waste. Second, IoT technology can improve tracking, which lowers the rates of lost or misplaced inventory. Finally, IoT devices can help businesses accurately predict and adjust to external factors, such as seasonality, weather, and other potential supply chain roadblocks. 

Advancements in IoT (Internet of Things) technologies are allowing businesses to prepare for the future by becoming more sustainable. A carbon footprint can now be monitored throughout the supply chain to see where changes need to be made to make the most impact. The supply chain will continue to benefit from IoT solutions like RFID tags as it enables the traceability of items and decentralization of information.

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Topics: RFID, Supply Chain, Sustainability

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