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IoT: The ultimate enabler for a digital supply chain

The internet of things is coming to a supply chain near you.
There will be 50 to 200 billion connected “things” by the end of this decade. Regardless of which research numbers you follow, we are about to be inundated by connected devices and things. IoT will be throwing off mountains of data — even more information to be added to our existing mountain of big data. This information will take on a new form and pace. Possibly smaller data points, but at a more rapid pace and coming from parts of our supply chains that were otherwise dark. The promise of this is to not only light up these dark parts of the supply chain, but also to fundamentally change how our supply chains operate. We should view this as a key component of the digital transformation of supply chains.

The digital journey is only beginning. IoT will be a vital part.
There is very little in our day-to-day lives that has not seen the impact of the digital revolution. How we think of point-to-point transportation will never be the same due to Uber. Where and how we stay when we travel has been radically changed due to Airbnb. How we listen to music no longer revolves around CDs, records or tapes. The very idea of purchasing a full album is foreign to many who have been accustomed to accessing music via services such as Pandora, Spotify, Apple and Amazon music. Watching television is not limited to our family rooms, nor is the activity restricted to time slots. Commercials, in some ways, are becoming a thing of the past.

While these are consumer-centric examples, the digital revolution’s impact is felt throughout B2B commerce, specifically in the supply chain. Supply chains are beginning to reap the benefits of digitization. How? From greater visibility throughout the supply chain. Industries from agriculture to automotive and consumer goods, heavy industry and retail, have all started to extract value from enhanced digitization throughout their supply chains.

In the chocolate industry, brands such as Mars have a greater view into cocoa production in sub-Saharan Africa through greater usage of connected farms. Companies such as Harley Davidson are more in tune with their manufacturing facilities thanks to IoT. Logistics firms lean on telematics to do a better job with fleet and asset management, and to capture greater efficiencies with regards to load management and routing.

However, many of these digital enhancements are being felt in pockets of supply chains. The digital revolution is not a tidal wave impacting all aspects of the supply chain with a giant bang. Rather digital, and in large part IoT, is taking hold at specific parts of the supply chain. At times this is being leveraged to enhance existing processes, while in other situations we are seeing new transformative business models emerging. A good start. The exciting opportunity for supply chains will be when they are fully connected, fully networked. For this IoT holds out much promise.

IoT is a vital step towards a truly digitized and networked supply chain.
A truly digital supply chain is one where processes and business models are centered on digital communications. It’s a world where the mechanical and digital are integrated in such a way as the physical world has a digital mirror of information and data. This digital mirror allows the physical to be more efficiently managed, to be used in different ways and to allow the physical world to take on new business models otherwise not possible. This digitization revolves around a greater access to, and usage of, data. This data is rich with information, consumed in a timely fashion and leveraged to make greater business decisions.

Supply chains shouldn’t simply look to place sensors on objects and assets, but rather, understand why being able to “see” more from these objects can benefit their business. IoT plays an important role in this vision. It will add a layer of visibility and access to data that supply chains are otherwise blind to.

As supply chain professionals continue to work down the digital road, they need to take into consideration a number of these technologies and innovations. IoT is just one cog in an otherwise complicated and dynamic ecosystem.

All IoT Agenda network contributors are responsible for the content and accuracy of their posts. Opinions are of the writers and do not necessarily convey the thoughts of IoT Agenda.

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