IoT will eventually have some impact on all aspects of the supply chain. IoT technology embeds pallets, parts, packages, equipment, etc. with sensors, so they can be continuously monitored, automatically tracked and remotely controlled across networks. Introducing sensors and other technology into the warehouse creates opportunities for integration of physical objects into computer-based systems. Initial supply chain benefits of IoT technologies include improved monitoring of inventory and logistics processes. Use of IoT improves asset tracking and controls inventory automatically and much more comprehensively. Shipments can be tracked and traced through manufacturing and transportation processes in real-time. This results in improvements in delivery accuracy as well as customer service to enhance overall customer experience.
The Internet of Things enables vast automation improvements in inventory flow, monitoring of equipment and product expiration dates, stock replenishment, inventory control and maintenance. Automation and process improvements can dramatically reduce inefficiencies and costs and preserve profit margins helping businesses to remain competitive. There will be even more benefits for supply chain when more and more IoT-enabled systems become linked together. The integrated data and digital communication will allow for automatic adjustments within the supply chain. Real-time data is collected from combined sources. This gives software the ability to:
• Automatically re-route items based on customer changes
• Pro-actively replenish inventory based on exact data and the forecasted demand
Using IoT will help prevent loss of sales due to out-of-stock merchandise. This is because when stock is low, IoT-based systems will be able to proactively place orders for restock of various items automatically. A multi-location warehouse network with an IoT-centered supply chain has a distinct competitive advantage. This supply chain will be able to automatically match available products across distribution facilities with current demand and automatically schedule correct inventory levels for each facility. In cases where inventory is unavailable, the systems will be able to check raw material availability and manufacturing capacity. Having access to real-time data may enable the system to automatically request production of more product for specific destinations.
The ability to maintain temperature stability is extremely important when dealing with perishable foods. Fresh vegetables could last a week if the temperature does not fluctuate, but perishable foods will not last if temperature increases for a period of hours. According to the Food and Agriculture Organization of the United Nations, up to one-third of food perishes in transit every year. IoT based on connected sensing technology can minimize the loss of vegetables due to temperature fluctuations. It provides the exchange of critical real-time information and supply chain visibility, reducing the possibility of a disruption.
Asset tracking (RFID) allows a supply chain manager to know in real-time where a product, truck, or shipping container is located. RFID can enable tracking of goods whether they are passing through the Atlantic Ocean on a container ship or moving down an assembly line on a factory floor. When used with cloud computing and data analytics, these technologies can provide even more value. Used together, IoT & RFID can inform predictive models that enable up-to-the-second delivery information. This creates efficiencies in monitoring and receiving products, as well as improving the availability of assets like a forklift to load a truck.
Fleet drivers that move light trucks filled with packages around a residential area must consider many different factors such as weather, traffic congestion, time of day, day of the week, and whether or not a co-worker called in sick. All of these issues can alter the time required to transport packages from a warehouse to the customer. With so many factors, it is unrealistic to expect that the most efficient decision is always made by humans. However, cloud platforms that are fed data from the fleet as well as traffic models, weather reports, and other information, can plot a much more efficient route. Packages get to the customer faster, ensuring a better end-user experience. This also helps to reduce driver headcounts, fuel consumption, and maintenance costs. Finally, fleet management allows operators to know, based on analysis, that asset reliability, availability, and efficiency are all optimized.
The Internet of Things will create new challenges and demands on supply chains. As supply chain logistics businesses continue to adopt new IoT technology-enabled products and solutions, new benefits and savings will be realized. The decisions supply chain companies make about the IoT partners they work with as well as the software and equipment in which they invest should be based on the IoT opportunities that best benefit the needs of their companies and clients.