How The Rise Of IoT Will Drive Supply Chain Visibility And Transparency

The impact of IoT on supply chain management


Visibility and transparency in the supply chain have never been more critical. Modern customers are becoming more and more interested in the ethics and sustainability of the practices of companies they utilize. A 2015 study by Nielson found that 66% of respondents would pay more for a product or a service if the company was committed to positive social and environmental change. This commitment needs to be demonstrated throughout the supply chain and it needs to be obvious to consumers where it is - and isn't - being adhered to.

Visibility, meanwhile, is vital to ensuring the company's supply chain works as a well-oiled machine. A recent Business Continuity Institute report stated that two-thirds of supply chains lack end-to-end visibility. True visibility is essential in today’s uncertain global landscape. The Business Continuity Institute’s 2016 Supply Chain Resilience Report found that 70% of businesses had experienced at least one disruption over the past year. And the more complex the supply chain, the more vulnerable it is to losing visibility.

In an increasingly digitized world, there's a convenient solution to both issues: the Internet of Things (IoT). According to Gartner, by 2020, the number of devices connected to the internet will more than triple, estimates suggesting there could be as many as 20.8 billion globally. IoT devices and mobile capabilities are set to reform the supply chain with revenue opportunities and operational efficiencies. So, how will the rise of IoT drive supply chain visibility?


Speaking to Dovetail, Tony Martins, VP of Supply Chain and TEVA Canada argues that "the speed of the chain is not really related to the systems used by various companies - it's all about people, and people talking to people." IoT devices can be used to improve vendor relations with communication happening in real-time. This improved communication will in turn increase productivity. With organizations not waiting for other areas of the supply chain to get in contact via email or another method, time can be used more efficiently, reducing labor hours throughout the supply chain. This not only means greater visibility, but happier employees and better working conditions at every stage. The resultant positive social change coupled with visibility will in turn appeal to broader range of consumers.

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Inventory processing

Increased use of IoT sensors in supply chains will also make tracking assets considerably easier, providing much more accurate inventories than humans. Accurately forecasting demand has its limitations and stock levels can be adversely affected by many outside inefficiency factors. Irregular, unpredictable spikes in demand can be caused by unexpected events like a sudden fashion craze, or a heatwave skewing consumer demand.

Smart devices connected to the IoT can radically increase a company's ability to monitor and deal with ever-changing variables. For example, when stock is low, an in-store smart management solution could provide proactive, real-time information. This will enable automatic shelf replenishment. An IoT-enabled equipment monitoring system could also provide predictive maintenance information, letting engineers know about potential break downs and costly disruption.

According to the Food and Agriculture Organization of the United Nations, up to one third of food perishes in transit every year. Maintaining temperature stability is vital when it comes to an inventory of perishable products. Dairy products, for example, need to be kept chilled and if this is disrupted for even a few hours it could result in wasted stock. IoT-enabled sensors can minimize such wastage. This reliability and the exchange of critical real-time information enables successful supply chain visibility. Less wastage also means greater sustainability throughout the business - exactly what the modern consumer is demanding.

Strengthened fleet management

Currently, phone calls and emails are still commonplace in establishing the movements of fleets. This is set to change with the increased use of IoT sensors in vehicles, connecting fleets more efficiently. The use of sensors means it's easier to predict delivery times and communicate issues that may occur on the journey, such as weather conditions or delays. This in turn will mean a more transparent and reliable feedback to the customer about delivery times as well as increased communication throughout the whole chain.

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