Much has been made of the transformative effects of IoT on the supply chain. Although the logistics industry was one of the first to use IoT devices for shipment tracking, this is just the tip of the digital iceberg, with Gartner predicting there will be over 26 billion connected, smart devices on stream by 2020.
The next wave of IoT will unleash a tsunami of improvements in the supply chain that will upend the way operational and business challenges are approached. More streamlined operations, highly personalised services, new user experiences and improved safety are all there for the taking.
The catalyst for the acceleration of IoT adoption in the supply chain arises from the intersection of a few complementary tech trends. These include mobile computing and in particular the imminent arrival of 5G networks; the consumerisation of IT; the race to the cloud; and AI-fuelled big data analytics. Advances in all of these areas is making it possible to reap benefits across the entire logistics value chain – from warehousing operations through to freight transportation and last-mile delivery.
The value of an IoT-enabled supply chain is that it makes it possible to monitor in real time your equipment, systems, packages and people and to connect these dots. This means that the performance of every asset can be measured and decisions taken promptly to pre-empt any problems down the line.
The vast tracts of data gleaned from sensors and other IoT devices can be analysed in real time to derive insights that can help to inform decisions on anything from warehouse asset management and product inventories, through to shipment locations, ambient temperatures, and ultimately retail purchase rates. The upshot is that inventories can be automatically restocked and product arrival times predicted. Crucially, potential delays or quality control issues can be flagged and acted on, and any fluctuations in demand can be reacted to immediately.
Improved warehouse asset management
In the warehouse, this translates into the ability to use IoT sensors to alert managers when an asset such as a conveyor belt or forklift truck is being over-used, or when it is lying idle. By building up a picture of the times of day when there is a backlog or spare capacity, for example, managers can rethink their strategy and make the factory floor more productive.
Smarter inventory management
Also in the warehouse, IoT-enabled tags transmit signals from each pallet to the warehouse management system so that inventory levels are always up to date and out-of-stock situations can be avoided. Quality control is another important application for IoT: for example, when temperature or humidity thresholds are about to be compromised for a perishable item, the sensors will trigger alerts to managers who can then take immediate, corrective action.
Predictive maintenance and stock
Predictive maintenance is another important area for IoT. Sensors connected to ERP systems can monitor parts that need replacing and automatically send an alert before a fault occurs, or before the device runs out of vital supplies. This reduces the need to hold excess inventory, helps with maintenance planning, and, over time, will let organisations predict seasonal highs and lows and increase or decrease stock levels accordingly.
Full visibility into the movement of goods is also possible with an IoT-enabled supply chain, signalling the end of logistics blind spots. Right now, phone calls and email communications are still commonplace, with the status of assets generally only recorded when goods reach certain checkpoints. Either side of these checkpoints it is impossible to know where the inventory is located, whether carriers are providing the right service levels, and where the bottlenecks and inefficiencies are in the supply chain.
Using IoT for real-time cargo tracking and monitoring eradicates these milestone-based track and trace solutions and offers automated end-to-end in-transit visibility instead. By connecting enterprise IT platforms to shipping containers and lorries via a mix of sensors, GPS, mobile networks and the cloud, it is possible to grab a multitude of data points on aspects such as the condition, geographical location and temperature of goods, as well as give insight into whether they may have been tampered with. Having immediate access to this data means that businesses can make smart decisions quickly - and pre-empt or minimise any potential issues. In-transit visibility also allows businesses to optimise the supply chain by, for example, modifying shipping routes to reduce carbon footprint, or to improve cargo security.
The last mile
Smart analytics and real-time alerts also mean that carriers have complete visibility of the logistics trail and can keep the end customer informed at every step, which also brings greater efficiencies. By integrating the IoT-enabled track and trace platform into enterprise workflows, carriers can take advantage of tools including efficient route optimisation, live tracking, and predictive delay calculation, while a mobile application ensures their couriers can pick and deliver seamlessly with real-time updates.
With customers valuing trust and reliability highly when making a purchase, having the tracking information sent directly to a smartphone app provides them with confidence in your service and reduces calls to customer helplines too.
End customer feedback
Manufacturers and retailers will also be able to harness the power of IoT to gain insights into how their products are actually being used by customers. This feedback loop will help them to improve and expand their product offerings, and to offer predictive maintenance services on, for example, electrical goods.
Smarter supply chains
In order not to be left behind by the competition, companies need to move now to start injecting IoT into their supply chains. IoT brings businesses real-time, end-to-end visibility and control across their supply chains, as well as greater automation and big data analytics. The upshot is a radically improved supply chain process that lets businesses drive down costs by becoming more efficient, as well as use data analytics to make more informed decisions around a wealth of new market opportunities.
Kushal Nahata, Co-founder and CEO, FarEye