IoT in Supply Chains: 7 Ways of Process Optimization
Despite the rapid technological progress, supply chain management remains a complex task. The product’s way from the manufacturer to the final distribution involves numerous point-to-point interactions that are in most cases supervised by emails and phone calls. Items can transit through different locations, and it may be hard to maintain end-to-end visibility on their way. The lack of control on any stage can dramatically harm the efficiency of planning and slow down the entire supply chain.
Luckily, there are some technologies, such as the Internet of Things, that can restructure and optimize these processes. Such networks already contain about 26 billion devices, and this number is expected to triple by 2025. Are you curious as to what impact IoT may have on supply chain and logistics? How do you optimize the supply chain with IoT? Learn it from our overview.
Roles of IoT and Big Data in Supply Chains
IoT has the power to connect various devices and sensors into a network that can work without further human intervention. Such an ecosystem will constantly generate, exchange, and collect “live” data, providing much more visibility to every process within the supply chain. The sensors can report on conditions and GPS, optimize energy consumption, and alert of potential dangers.
There are several benefits of IoT in supply chain management:
- Improved inventory visibility;
- Real-time shipment tracking;
- Early identification of possible issues;
- Efficient supply and demand planning;
- Better quality management, etc.
7 Ways of Supply Chains Optimization with IoT
In fact, IoT can impact all aspects of the supply chain, from logistics to warehouse management, eliminating blind spots and inefficiencies. Now, let’s look at several examples of IoT in the supply chain in detail.
People are already tracking numbers and barcodes of goods throughout the supply chain, but RFID and GPS sensors can help to monitor the entire journey of each particular item. Such devices can provide you with granular data about storing conditions, transporting time, etc. You can even learn how long it takes for your products to fly off the shelf. Such data can be vital for maintaining quality control, providing on-time deliveries, and minimizing losses.
You may be surprised that suppliers are responsible for 65% of the product’s value. That’s why you should pay closer attention to your vendors and how they are handling your products, and asset tracking can help to recognize the relationships that might cost you money. By paying attention to the items’ quality, you can determine unreliable suppliers and intervene before your customers receive a bad experience.
Regardless of whether you have your own storage or use third-party warehouses, it is usually very hard to understand how much stock is in there. Items get moved in and out all day long, some goods can be left unaccounted for or even stolen, so real-time stock levels are seldom measured.
But sensors attached to boxes/pallets can dramatically improve the situation. They can detect the real-time location of all the items you have and even alert workers if the goods are leaving outside the schedule. Another benefit of such devices is accurate forecasting, as you can use their data to determine trends and make the supplying and manufacturing schedules as efficient as possible.
Similar smart sensors can also be placed on manufacturing floors to monitor the conditions and plan maintenance. Any unexpected issues at the production stage can put your schedules at risk and thus cost you both time and money. Proactive actions can help you to maintain constant manufacture and prevent downtime.
Prevent Counterfeit and Substitution
The brand reputation can be severely damaged by counterfeit and substitution that can potentially happen anywhere within the supply chain. Identifying such issues is difficult even for a small business, and it can become an impossible task for cross-border trade.
This issue becomes solvable if you supply your packages with smart sensors. These devices can detect when the box has been opened and report it back to the manufacturer.
With IoT, the supply chain can become much more accessible for inspection. Augmented reality systems can help managers to explore any stage of the product’s journey without being physically present at that place. Gathering data from thousands of sensors, you will be able to reconstruct the entire journey of every item, detect possible issues, and react proactively to prevent service interruptions.
Asset tracking data can have many other applications. For example, it can give you an opportunity to learn more about product performance after a customer buys it. Previously, you could gather such insights only by inspecting the product, but now you can virtualize this task and use such post-sales data for further improvement.
Both small businesses and big companies can benefit from applying IoT in the supply chain. It can help you to track assets within the entire chain, eliminate the blind spots, improve inventory management, and increase overall efficiency. What is more, the data in the IoT network will grant valuable insights on the potential issues, helping you to act proactively before they impact your revenue and reputation.
If you want to enhance your business with IoT, the Axisbits team can always help you with supply chain optimization.