More than half of major new business processes and systems will incorporate some element of the Internet of Things (IoT) by 2020, according to Gartner, Inc- Jan 2016
With e-commerce becoming more complex with every passing day, businesses require predictions that can help them manage these upcoming challenges. During this pandemic, IoT is playing a major role for businesses in upgrading logistics & streamlining supply chains. It is playing a crucial role in making the supply chain systems more intelligent and equipped to handle different supply chain issues that come their way.
What is the Internet of Things?
Internet of Things or IoT is a global network of computing devices, machines, and appliances that are embedded with software and other technologies so data can be exchanged. Many appliances and specialized devices are connected to built-in IoT sensors and these sensors are further connected to the Internet of Things platform. This platform connects, and integrates data from different devices and uses analytical algorithms to share data to apps designed to address specific user needs.
The supply chain network becomes highly complex as the business scales up. Dozens of operations are involved simultaneously even in the case of a single delivery. The supply chain managers have their tasks cut out to streamline and coordinate supply chain operations effectively.
How is the Internet of Things (IoT) Transforming Supply Chain Businesses Today?
IoT devices provide advanced analytical insights to make production and business processes more efficient. These smart connected devices allow for the automation of business tasks that would otherwise incur huge manpower costs. Read about the ways the Internet of Things (IoT) is transforming supply chain businesses today.
Real-Time Tracking
IoT provides supply chain managers with organized and detailed real-time data on their product shipments. This data involves the location of products, transportation environment, and logistics personnel.
The real-time tracking feature alerts supply chain managers when the product gets directed to the incorrect location or lost during transit. It helps them proactively monitor the delivery of ready products and the logistics of raw materials.
IoT has enabled many supply chain businesses to manage their operations right from sourcing and manufacturing to last-mile delivery.
Maximizes Inventory Control
Using IoT technology for inventory systems helps businesses track critical elements of the supply chain in real-time. It enables them to accurately predict the future inventory needs that help them avoid shortages and make smarter purchasing decisions. It allows businesses to do supply chain planning in a way that minimizes delays and meets customer demand.
IoT systems have transformed businesses in a way that they can prepare in advance for any out-of-stock situations and devise effective backorder strategies.
By automating inventory management tasks, IoT systems can free up employees’ time. This allows employees to focus on the most crucial business operation tasks without any distraction from tasks that are easily handled by computers.
IoT systems automatically update information on business assets seamlessly. They save supply chain managers from logging data into spreadsheets manually. Its asset tracking feature provides access to insights on delivery, contents of packages, etc.
Improves Storage Control
Earlier, it was a huge challenge for businesses to manage the logistics of temperature-sensitive products. But things have changed drastically in the past decade. The logistics of time-sensitive and temperature-sensitive products are increasing every year. One of the major reasons for it is the rapid development of IoT technology and systems.
Specialized sensors of the IoT systems help supply chain managers track the storage conditions of goods during the shipment process. It measures the temperature inside a storage warehouse or a logistics vehicle based on a variety of products that could compromise the integrity of the product. It enables them to address potential damage issues before the shipment arrives at the destination. The IoT technology ensures that the goods are stored and managed properly in the future.
Improve Supply Chain Maintenance Measures
Supply chains are highly interconnected today with many devices, appliances, and machines. If there is a machine malfunction in some supply chain touchpoints, it can stall the operations in the entire supply chain, adding time and expenses for the business personnel. However, with the advancement in technology, supply chain technology has evolved significantly to address these challenges efficiently. It encompasses a wide range of tools and software that help in monitoring, optimizing, and automating various processes across the supply chain. So, if you are wondering what is supply chain technology, it’s essentially the backbone that streamlines operations and enhances overall efficiency.
With IoT technology, businesses can monitor a spectrum of supply chain performance metrics. It predicts the breakdowns and malfunctions of machines that allow them to plan preventive maintenance schedules in advance. The predictive maintenance alerts from IoT-connected devices help businesses improve the lifespans of equipment and reduce unnecessary maintenance expenses.
Using IoT systems has enabled supply chain managers to identify resource leaks and reduce the supply chain operating costs. Its valuable insights helped them determine the areas where they overspend and maximize their revenue potential.
Consistent Supply Chain Transparency
Miscommunication in the supply chain touchpoints causes additional burdens and incurs higher costs. IoT technology can improve the quality and efficiency of all parties involved in the supply chain and logistics cycle. The interconnected IoT devices help fleet managers check if their drivers are adhering to the internal regulations. It even enables them to identify delays between the warehouse and the product’s final destination, making last-mile deliveries cost-effective.
IoT devices automatically update the recent changes in the logistics operations of a product.
Ex: If downtimes are increasing for a number of vehicles in a fleet, IOT systems quickly update that to the management and the internal stakeholders. This not only helps them schedule predictive maintenance but also builds a long-term strategy to manage delays induced from vehicle downtimes.
Improve the Route of Deliveries
The on-time delivery rates in the last-mile delivery depend on the route a fleet takes. Decades earlier, drivers used to ride the fleet with some random routes and deliver the goods. Today, with the increased volume of goods to be delivered, businesses are able to maintain consistent on-time delivery rates due to the use of IoT technology.
The IoT technology helps fleet managers generate predictions on traffic, routes, vehicle performance, etc. that helps their route optimization process. The interconnected IoT devices in all vehicles in the fleet helps logistics managers compare the planned and actual routes driven by their riders. This improves the route optimization process and generates accurate insights for the delivery routes in the future.
Conclusion
Since the COVID-19 pandemic, businesses have started to rediscover their supply chain operations and adopt new technologies. Businesses that quickly adapt and implement IoT systems can enable seamless logistics operations compared to their competitors. This will help them maximize profit margins and maintain the consistency of supply chains in the coming years.
