Supply chains are unwieldy things with a lot of moving parts, many of which often end up heading in different directions. The key to running them effectively is to streamline until you’re blue in the face. The Internet of Things (IoT) has long been touted as the technology that will change the way the world works, and nowhere is this truer than in the supply chain, where it has the potential to vastly simplify operations.
Currently, there are 4.9 billion devices connected to the internet, which is more than one device for every other person in the world. Cisco estimates that, by 2020, there will be in excess of 50 billion devices connected to the Internet across the world - just 17% of which will be computers.
The IoT affords an incredible level of connectivity. Utilizing this is a huge challenge for supply chain leaders, but it has many applications to help gain a competitive edge. These include:
Perhaps the biggest impact the IoT will have is on monitoring stock levels. When stock is low, the IoT will automatically place orders for the items. It also enables better record keeping of inventory replenishment and withdraws. IoT can integrate data from logistics to provide an accurate and comprehensive view of replenishment and withdrawals.
IoT platforms can marry various pieces of transactional data with other factors that might impact the journey, such as weather data, to provide logistics operators with a clear overview of when items will be required to be somewhere, and when would be best to send them. This is especially beneficial for perishable goods or those that require special transit conditions.
Cargo can also be traced throughout the delivery process with the IoT, and it allows manufacturers to initialize computer installation processes during transit, which will speed up implementations.
Equipment monitoring can also be used to predict when equipment needs service and maintenance. It constantly monitors machinery for signs of damage, enabling organizations to deal with potential problems safely before they reach pass crisis point, helping to prolong the life of a company’s machinery. It also prevents potentially dangerous incidents from occurring, shutting down any connected equipment that might worsen a situation. Fundamentally, risk management across the supply chain will move away from reaction to prevention with the availability of real time data.
While the IoT clearly has great potential, the technologies are yet to fully mature, and new applications continue to emerge. Will 2016 be the year that IoT explodes? It’s doubtful, as it will likely still be some time before people realize its full potential. Those who do so first, however, hold a huge competitive advantage.