Supply chain management and logistics, for example, that have for long relied upon human inputs and capabilities have found a new hero in IoT. The addition of sensors, identity chips, and communication devices that are constantly connected to the cloud and analytics engines have brought a new wave of automation in business that delivers constant feedback and enables better business decision making for organizations of all sizes. So what are those five ways in which IoT has helped revolutionize supply chain management and logistics for global businesses? Let’s take a closer look.
What can IoT do for supply chain management
In a connected world where consumers and businesses have direct access to each other from halfway around the world, data becomes an extremely precious commodity and an integral variable in the growth of a business. Traditionally, this data has been difficult, if not impossible to collect. Once the data was collected, it had to be sorted and analyzed manually for it to make a real impact on the business bottom line.
For example, a vending machine that shares real-time feedback with the warehouse management system and informs it when the inventory is running low and automatically places an order for those items makes a payment to the suppliers and generates a quick report for the manufacturer on the sales figures. This can allow companies to better segment their target audience in a particular geographical location and focus their energies on marketing efforts accordingly.
Such automation is no longer a piece of science fiction fantasy. It is for real and it is happening all around us. Another example can be seen at airports where RFID tags on baggage ensure the safe delivery of luggage to its intended destination. With a reduced number of incidents of misplaced luggage, airlines can easily reduce their costs of having to compensate customers for such mishaps. When taken to the next level, use of RFID tags in conjunction with GPS, weather, and traffic, etc. on large cargo consignments can enable businesses to track optimal routes of delivery by land, air or sea, and improve the overall efficacy of the supply chain. And all of this in a day’s work.
A responsive supply chain
Businesses are no longer confined to a single channel to reach out to consumers. As a result of this omnichannel market where everything and everyone is connected, it becomes pertinent for organizations to embrace IoT to enable a responsive supply chain that evolves constantly at every stage. Real-time supply chain data collection and analysis can help businesses to accurately track and assess inventory movements with the help of sensors, and hence be in a position to accelerate or reduce the supply of inventory based on consumer demand.
Smart warehouse management
IoT enabled supply chains can operate efficient warehouses with a visible impact on the bottom line. Asset losses, temperature variations, order fulfillment, payment tracking, and other such operational hurdles can easily be optimized for accuracy and efficiency. For example, if assets in a warehouse are connected to the internet via small GPS enabled RFID tags that work like The Google Android Device manager to locate an android phone, they can easily be tracked anywhere before they become a problem. Such a system can not only ensure efficiency but also protect against theft or damage to the inventory.
Supply chain business intelligence
The increased connectivity in the supply chain offers sizeable business intelligence to the organization. It includes financial data, customer data relevant for marketing, sales, and operations, and allows improved accuracy in forecasting consumer demand. This in turn, ensures better coordination between different departments that allows considerable savings in cost and time for the business. Not only that, supply chain forensics data ensures that things that went wrong during the process of delivery can be identified and rectified before it turns into a bigger problem for the business.
IoT has proven to be a boon for supply chain managers in the retail sector. Every device, our cars, our phones, and even satellite radios share a lot of valuable information about our habits and preferences on the cloud. Companies can analyze this information and find out the kind of car we drive and if we have kids or not. And this analysis can help them transform their business in the way they manage the creation, procurement, and delivery of products across their supply chain.
Fleet and fuel cost management
Everyone uses Google Maps to know about traffic conditions and optimize their commute. IoT, however, can help logistics go a step further and learn from the traffic patterns at specific times of the day, temperature, humidity, altitude, etc. to maximize fleet and fuel cost management. GPS devices embedded in pallets or even deployed on the vehicles can analyze historical data to ensure optimal delivery routes and times, and also keep a close check on fleet maintenance and driver health at every stage.
Reduce transit damage
Nearly 30 percent of perishable items are destroyed during transit across the globe. That is a significant financial hit on the business. According to UNFAO, most of this damage is caused by unregulated temperatures and poor storage conditions. It sounds like an elementary and uncomplicated task. But just think about how difficult it can be to regulate and maintain a steady temperature inside a car while traveling cross country on a highway, and you’ll get the picture on how difficult it is to do the same inside a fleet truck. Simply plugging this gap with IoT monitored consignments can reduce this transit damage and ensure that more perishables can reach their destination unharmed and on time.
The evidence in favor of the Internet of Things is clear, and it is just about getting ready to alter the supply chain and logistics sector from within. Not only will this change relieve stress off the retail industry, but also ensure that the best products and services reach the consumers at the right time. Although IoT has been considered as a technology set limited to wearable devices for consumers and connected cars, it has emphatically proven itself as an integral part of the warehousing, factories, and supply chain segments. And the companies that have been the early adopters have already witnessed the possibilities IoT holds for their business by making them more responsive to consumer needs.