How IoT Will Impact The Supply Chain
There has been a lot written about the Internet of Things (IoT) and how it will affect nearly every global industry—from retail to connected vehicles. In my opinion, one of the most exciting areas of impact—albeit far less sexy than drones and self-driving cars—is the global supply chain.
When I think of supply chains, I think of the quirky TV show Portlandia. There’s an episode where two friends are dining out and, before ordering, they insist on knowing as much as they can about the very chicken they’ll be eating for dinner. They find out his name, appetite, and social habits. They even travel to the farm where he was raised to make sure it seems like a happy environment. It’s an option made possible due to the restaurant’s firm commitment to farm-to-table transparency. The process of assessing a chicken in real-time before agreeing to eat it may seem a bit outlandish (errr, Portlandish.) But with the IoT, we’ll be able to experience that type of transparency, and so much more.
Indeed, the IoT is set to revolutionize the supply chain with both operational efficiencies and revenue opportunities made possible with just this type of transparency. In today’s market, supply chain isn’t just a way to keep track of your product. It’s a way to gain an edge on your competitors and even build your own brand. The following are a few areas where we’ll be seeing the most advancement and change with the ever-advancing Industrial IoT.
When it comes to operational efficiencies, the IoT offers many:
Asset Tracking: Tracking numbers and bar codes used to be the standard method for managing goods throughout the supply chain. But with the IoT, those methods are no longer the most expedient. New RFID and GPS sensors can track products “from floor to store”—and I’d venture, even beyond. At any point in time, manufacturers can use these sensors to gain granular data like the temperature at which an item was stored, how long it spent in cargo, and even how long it took to fly off the shelf. The type of data gained from the IoT can help companies get a tighter grip on quality control, on-time deliveries, and product forecasting. Not too shabby.
Vendor Relations: The data obtained through asset tracking is also important because it allows companies to tweak their own production schedules, as well as recognize sub-par vendor relationships that may be costing them money. According to IBM—whose Watson AI technology has become a major resource on the supply chain scene—up to 65% of the value of a company’s products or services is derived from its suppliers. That’s a huge incentive to pay closer attention to how your vendors are handling the supplies they’re sending you, and how they’re handling your product once it’s made. Higher quality goods mean better relationships with customers—and better customer retention overall.
Forecasting and Inventory: Another bonus: IoT sensors can provide far more accurate inventories than humans can manage alone. For instance, Amazon is using WiFi robots to scan QR codes on its products to track and triage its orders. Imagine being able to track your inventory—including the supplies you have in stock for future manufacturing—at the click of a button. You’d never miss a deadline again. And again, all that data can be used to find trends to make manufacturing schedules even more efficient.
Connected Fleets: As the supply chain continues to grow—upward and outward—it’s even more imperative to ensure that all your carriers—be it shipping containers, suppliers’ delivery trucks, or your van out for delivery—are connected. Again, the data is the prize. Just like cities are using this data to get to emergencies quicker or clear up traffic issues, manufacturers are using it to get better products to their customers, faster.
Scheduled Maintenance: Of course, the IoT can also use smart sensors on its manufacturing floors to manage planned and predictive maintenance and prevent down-time that can cost so much.
The chance to know more—and understand more—about our customers, their buying habits, and the trends associated with them is invaluable. It allows businesses to form tighter connections with customers and, inevitably, market to them in new and better ways. Beyond the use of data for improved efficiencies noted above, for instance, businesses can get creative with supply chain transparency. They can build a reputation of social responsibility by allowing customers to access—and with AR, even see—where their product came from, who made it, and the conditions in which those workers lived. They can see who wore it—whose celebrity hands may have touched it—which countries it may have traversed to reach their homes. Heck, maybe supply chain is sexy after all.
How close are we? That depends. Research shows 70% of retail and manufacturing businesses have already begun to transform their supply chain processes. However, when it comes to supply chain, there is far from a level playing field. For the IoT to be truly effective, all members of one’s global supply chain must be connected. In an age when many companies are just now embracing the concept of mobility, that may take a while. Still, as technologies like blockchain and edge computing continue to take form, there is so much further we can go to make our supply chain even more efficient—and creative—than ever before. Perhaps that’s where the real excitement lies.
Written by Daniel Newman.
Daniel Newman is CEO of Broadsuite Media Group, principal analyst at Futurum and author of Futureproof.
Please view full article at forbes.com