A lot has been written about the Internet of Things (IoT) and its impacts on almost all major industries, including transportation, retail, healthcare, finance, and accounting. But one of the most exciting areas of influence is the global supply chain. The Internet of Things shows its fullest potential in processes like supply chains.
Supply chain analysis requires an understanding that the production of any product is inherently dependent on a series of connections and links. When one, or more of the links are weak – whether due to outdated machinery, transport delays, or human errors – businesses end up with poorly functioning supply chains that are costly, with little returns.
The Internet of Things, through its network sensors, offers the much-needed connection in the supply chain – the link between the physical world and that of data. IoT allows companies to transmit critical data across different channels and break them down using powerful analytics engines to optimize any given supply chain component, that helps drive better decisions.
IoT Solutions in Supply Chain Management
Organization and efficiency are two main factors that tend to determine failure or success. If an enterprise can’t locate goods within its system quickly, create delivery schedules efficiently, monitor inventory effectively, or maintain equipment properly, it’s likely to suffer. But the good thing is that organization and efficiency are two areas where IoT excels.
IoT is a collection of interconnected devices that can track, report on, send, and exchange data. These devices (smart devices, chips, mobile sensors, and RFIDs) are linked to computer systems through Wi-Fi or data networks and use sensors to measure different environmental factors, including temperature, location, light levels, handling, movement, humidity, and speed movement. They also automate processes, minimizing human errors.
IoT systems allow businesses to:
Authenticate the location of products at any time
Monitor movement speed and their arrival time
Track storage conditions of products and raw materials
Streamline the shipment processes
Locate goods in storage
Deliver goods immediately upon receipt
IoT-enabled devices are increasingly being implemented to improve the visibility of logistic operations. For example, sensors can be installed in fleets for to offer real-time monitoring updates of transportation and delivery. They also are ideal for asset tracking and fleet management. With this technology in retail outlets and warehouses, there will be more visibility in production, inventory management, and predictive maintenance.
When connected to the global supply chain, IoT technology can help companies to track and monitor systems in real-time, allowing them to identify and solve problems before they escalate. Such real-time data can also be helpful for businesses to proactively service client demands, reduce downtime, and increase the supply chain’s overall efficiency. And thanks to improved efficiency and visibility across the supply chain, IoT technology enables companies to optimize their assets and ROI.
The Future of IoT Supply Chains
The concept of taking all of the “things” worldwide and linking them to the internet and each other (by extension) is a technological field that’s bursting with promise. The dawning of the age of the IoT is already influencing how supply chain management is happening. Things like organization, efficiency, and relevance are enhancing operations and service quality, with almost unlimited future potential. Here’s what’s in the future of IoT supply chains:
More Companies Will Join In
From the look of things, IoT is coming of age. Studies reveal that the number of enterprises using IoT applications rose from 13% to 25% from 2014 to 2019. The IDC predicts 13.6% yearly growth through 2022. In another survey, 75% of large manufacturers wanted to update their operations using IoT and analytics-based situational awareness by the end of 2019.
There Will Be More IoT Devices
Gartner predicted that there would be a 30-fold increase in internet-connected physical devices by the end of 2020. The same report indicated that IoT would reach 26 billion installed units by the same year and influence the data available to supply chain leaders and how the supply chain works, based on the industry.
Artificial Intelligence (AI) Will Continue to Grow
AI promises a smart new world of computers that can strategize, plan, calculate probabilities, evaluate options, and make the best decisions. Of course, IoT is the body that gives Artificial intelligence’s brain the ability to act. It also offers the information that AI requires to make smart choices. AI will serve a critical role in monitoring, analyzing IoT data, and sieving it into actionable themes. Machine learning, a type of AI that helps IoT devices to learn without someone having to program them, will then allow systems to adjust according to the company’s preferences.
IoT Will Address Vast Concerns
From what we see today, there are numerous reasons why more and more businesses are incorporating IoT into their operations. From the COVID-19 pandemic and political unrest to environmental concerns like weather conditions, fuel costs, etc. All these affect the way the shipping of goods is done globally. Not to mention today’s consumer, who is very specific about how, where, and when they get products. From consumer electronics, to their healthcare, people will turn to IoT and other technologies to navigate different situations.
5G Networks Will Continue to Drive IoT Growth
5G network was rolled out in 2019, but the coming years will see many companies switch to this incredibly fast network. 5G promises more ability to connect more smart devices at one go. Greater speeds mean the information gathered by the IoT will be analyzed and managed to a higher degree. It will also drive innovation in companies that create IoT devices (like sensors, identity chips, and computing devices) and boost efficiency and organization. Thanks to 5G, billions more IoT devices can be plugged into the global network, according to Ericsson.
There Will be Supply Chain Digitization
Efforts to connect all systems as well as implement new digital technologies will still be a priority in the future. Digitization in the supply chain creates transparency, eliminates silos, and enhances responsiveness. PwC foresees a digital environment that removes manual processes and offers a single view of the company and all its supply chain operations.
There Will be Plenty of Big Data
The growth in IoT, along with the digitization of the supply chain, will yield plenty of big data. IoT will prove valuable for supply chain and logistic managers who want to understand consumer behavior and usage patterns, enhance their inventory management and streamline eCommerce.
IoT Will Become Virtually Invisible
IoT solution will become invisible in the future. The real value of IoT lies in the automation and insights that are enabled when one has access to real-time data on all critical aspects of the business. Manual observation will become uncommon because all alerts will be sent to devices. The future of IoT is billions of cheap, small, low-powered devices that offer instant insights into every system, process, and asset that’s critical to supply chain companies. It is ubiquitous, invisible, and primarily driven by notifications.
John is a highly respected and seasoned C-level sales, operations and general management executive, with decades of proven success in growing sales and profits while vastly improving operational disciplines.
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