How IoT Will Change the Supply Chain Forever

Posted by Advanced Mobile Group on Jan 19, 2017 2:33:37 PM


When it comes to the Internet of Things (IoT), it’s no secret that it has the ability to change the way we operate a lot of different things we do in this country. For example, you’ve already seen a massive change when it comes to connected homes and connected cars where both of these products are now constantly connected to the internet thus changing our experience and how we use them forever.

While those types of technologies are fun and can help the average consumer, there is a much bigger trend when it comes to IoT and the comes in the form of the supply chain. As it stands now, the IoT is setting up to completely change the supply chain forever and the results that are going to happen are quite drastic.

 Current Status of IoT

The IoT is currently changing everything we know about how companies that offer delivery and fulfillment are running their businesses. While one of the more popular methods of deliveries today involves using a third party to do so, the IoT has the ability to completely change how this process is run and you’re going to see directly how it has the ability to affect what we know about the supply chain. In 2015, tech giant Cisco and the delivery company DHL got together and estimated that IoT technology can have an impact of more than $1.9 trillion on the supply chain. 

While it might seem like this is a shift that will take a lot of time to complete, you can already see that is not the case. As it stands now, more than 70% of the retail and manufacturing companies around are already beginning to shift to digital methods for their supply chain and logistics operations.

 IoT and Asset Tracking

The main thing that IoT is going to impact when it comes to the supply chain is asset tracking. While it is not new by any means, the way asset tracking is done is going to be completely overhauled and the changes will be drastic. For example, the older tracking system has used barcode scanners to manage all of their inventory, but the new method is going to improve on that big time.

The new asset tracking is going to provide you with more usable data, especially when you go ahead and combine it with other IoT technologies.

As noted early, the effect on the supply chain might not be taking place right away but it is a shift that has already begun and is going to continue to increase as time goes on. By time 2020 rolls around, you’re finally going to see that the IoT is going to significantly impact how the supply chain is operating. Specifically, it is going to improve how information is accessed. 

For a long time already, ERP and supply chain management have gone together for a very long time. When you ass in the IoT technology, then you’re going to find that both of these technologies are going to be intelligently connecting all over the board. These improvements are going to help in the supply chain from automating the process in the manufacturing to improving the visibility of what is inside the warehouse.


Visibility of In-transit Goods

One of the biggest ways that the IoT is going to affect the supply chain is the visibility of in-transit goods. While the logistics system and supply chain has a lot of moving parts, one of the biggest problem is not know what is going where and when your goods are going to come in.

If you don’t know where your goods are or what goods you have, then it is difficult to try and keep an accurate inventory. With the IoT, you’re going to be able to have increase in-transit visibility thanks to both GPS and RFID technology.

These technologies are going to give you a ton of information that will provide you with identity, location and plenty of other tracking information and this is where it has a huge impact on the supply chain. By tapping into these technologies, the companies are going to have full visibility of their products starting from the manufacturer going all the way to the retailer, so you never have to worry about where the products are.

Not only is this data going to allow companies to completely automate their shipping and know exactly where the products are, but you’ll be able to monitor different factors in the delivery of goods such as the temperature if you happen to be transporting goods that are in need of refrigeration.

 What the Future Supply Chain Will Actually Look Like 

If you’re wondering how IoT is going to bring all of this together, then the following explanation is going to help make a lot more sense to you. The process is going to start by putting an RFID chip into a pallet or a shipment crate and then in the shipment vehicle, you will need to add in a combined integrated device and then all of the data is going to be put into the cloud.

From there, the device is going to be able to identify the pallet and can share it’s location with GPS but it can also tell you a ton of different information such as the traffic and weather conditions as well as data regarding how the driver is performing. Thanks to this, you’re going to be able to see the driver’s information such as their driving pattern and their average speed. 

With this data, then you’re going to find that you are able to get a better understanding of how your overall logistics management is working. By analyzing the data of a large number of deliveries and shipments, you are going to be able to recognize patterns among your drivers and shipments. With this data, you will have easily be able to increase the success of your deliveries to maximize your time and profits.

The Power of Data 

Even further, this data can help improve your success of a delivery before the delivery has even left. For example, if you find that there is a traffic jam on the intended route, then you are going to be able to reroute the delivery to avoid the traffic jam and get the delivery to your faster. If you do not have this technology, then you are not going to know about the traffic jam and delays until you are already stuck in traffic and delaying your shipment.

 What Supply Chain Professionals Should Do

Of course, all of these different scenarios are going to applied to a lot of different area in the supply chain and the IoT means that you are going to get rich and deep data and intelligence that can help supply chain professionals do a lot of different things including:

  • Reducing the asset loss by finding a solution to a problem before it is too late
  • Save fuel costs by optimizing your routes after knowing all of the traffic conditions
  • Ensure your food will not perish. As it stands now, nearly 1/3 of all food is going to go bad in transit due to temperature issues but with this, you can monitor those temperatures.
  • Manage warehouse stock to accurately know how much inventory you have in stock without running the risk of running out.
  • Enhance user insight by putting sensors in so you can monitor the customer behavior and product usage.
  • Increase your fleet efficiency by mapping out the best possible routes to ensure that you are no wasting time by going on a route that is unnecessary. While it may not seem like that is a problem, nearly 10% of the miles accrued by trucks are unnecessary miles that could have been avoided by a better route.

 As you can see from all of the information that was presented above, there are so many great things to get excited about when it comes to the impact that IoT will have on the supply chain. Unfortunately, it’s important to understand that the full application of this project has yet to take effect and it will be time before it fully comes into focus for most companies and manufacturers.

However, it is wise of everyone to pay attention to this technology as it is now so that they can easily and effortlessly adopt this technology when it comes time to do so. It won’t be long before the IoT shapes the supply chain and transportation industry and allows companies to work smarter, better and use a lot more intelligence when it comes to making some of the most important decisions in their business.

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Topics: Internet of Things, Supply Chain

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