Gartner predicted that by 2020, the internet of things will add an estimated $1.9 trillion to the global economy. As such, it would only be fair to say that the world is witnessing its 4th industrial revolution, driven by the phenomenal adoption of IoT by various industries globally. Among the several business-critical processes that are impacted by this revolution, supply chain operations and their management is one such process.
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Michael Burkett, Gartner’s managing vice president said, “It’s important to put IoT maturity into perspective because of the fast pace at which it is emerging, so supply chain strategists need to be looking at its potential now.” IoT systems are built around standard technologies, allowing easy connectivity of business applications and devices throughout the supply chain. Further being cloud-based, these systems are availed as a service, making their implementation economical.
Let’s take a look into some of the ways how IoT is impacting supply chain operations.
Achieving significant operational efficiency
IoT-enabled physical sensors provide a goldmine of information to monitor and manipulate supply chain processes. This data reveals key business insights when processed using an analytical engine coupled with cloud platform, like that of Azure HDInsights. The supply chain components are the critical nodes to tap data and power the machine learning algorithms, thus providing critical business intelligence to optimize the supply chain process for greater efficiency.
The IoT system helps build a connected environment to provide end-to-end visibility into the supply chain. This also uncovers elements that can help enterprises make more informed actions at every stage of the supply chain process. It also helps improve communication between manufacturers/producers, transportation companies and the recipients/clients. The key advantages of using IoT devices in the supply chain process include real-time insights and visibility, predictive anomaly detection and forecasting maintenance, which help in improving operational efficiency of the supply chain process.
Greater operational transparency and supply chain visibility
IoT devices comprised of sensors and communication modules are used in trucks, ships, railways, airplanes, warehouses, etc. These devices collect important data such as temperature and atmospheric conditions and transmit it to the cloud in real time. This data is stored, analyzed and made available to cloud-connected devices anywhere in the world, enabling remote monitoring.
Cloud-driven IoT solutions provide real-time alerts on conditions such as temperature anomalies and storage equipment malfunction, thus allowing unmatched supply chain visibility on mobile and web applications with a capability to control the ongoing operations in real-time.
Proactive and rapid replenishment of items
IoT devices integrated with storage containers or process machines sense when they are running low on inputs or some necessary items. Consequently, they raise alerts and/or push them to cloud for remote monitoring. This allows appropriate measures to be taken immediately for replenishment.
Many IoT devices also communicate with the supplier and place an order when a necessary item is about to go out of stock. Thus, IoT-connected devices enable quicker and more proactive replenishment without requiring a lot of human interaction. This reduces bottlenecks in production and transportation processes, preventing unnecessary loss of time and avoiding any future losses in revenue.
Sensors and communication modules are used to monitor the functioning of important equipment and machinery within the supply chain. When any equipment begins to malfunction, the sensors in IoT-connected devices detect it and send the respective data via the communication module to the cloud. This data is then analyzed and maintenance or replacement is scheduled well before the occurrence of failure.
The data accumulated over time is also useful for detecting data patterns that indicate future failure possibilities. Such intelligence enables better forecasting of problems and timely corrective intervention of faulty operational trends. Thus, IoT and analytics-driven solutions impart predictive maintenance which significantly reduces the chances of overpriced downtime.
Prevention of consignment loss
Tracking of consignment and preventing it from being lost during transportation is one of the biggest challenges faced by companies. Most of them use manual data entry methods which are prone to human error as the distance and stages of transportation increases. Also, loss of consignment leads to a significant damage both in terms of revenue as well as reputation of the company.
To overcome this challenge, cloud-connected IoT tracking devices allow continuous real-time monitoring of consignment from remote locations. This also ensures that a close scrutiny is maintained on the progress of a consignment along the delivery route, minimizing any chances of it being lost.
Better management of fleet
Vehicles equipped with IoT-connected devices make fleet management much more efficient. Sensors collect data pertaining to vehicle location, tire pressure, engine temperature and collision and send it to the cloud for remote monitoring. This data allows efficient tracking and management of fleet and also ensures that each vehicle runs in perfect condition.
Analytical solutions on this captured data permits prediction of maintenance, minimizing unanticipated vehicle breakdowns and repairs. This makes transportation safer and also helps in accurate estimation of the budget.
IoT is revolutionizing supply chain operations. If you haven’t yet explored its potential for transforming your business, it’s about time you did. IoT consultants can help connect thousands of physical assets to the cloud, mobile devices and backend ERPs/CRMs, and build systems of intelligence using the Azure IoT Platform. As an instructive example, check out how a leading food distribution giant optimized its supply chain operations with an Azure-based IoT solution for 100% visibility on mobile devices.
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