It’s not every day we get to say this, but technology is about to reward our patience in a big way. It’s easy to get pessimistic when tech seems to solve smaller and smaller problems, but the truth is, life in the supply chain will soon look very different — and it’s all thanks to emerging technologies.
The Internet of Things will be particularly consequential. The promise of connecting more of our production infrastructure and end products to the internet will help empower us with more and better knowledge than we ever thought possible. One of the first main arenas where the benefits of the IoT will make themselves known is in the supply chain.
Better Information, Forecasts and Cycle Times
The critical balance any business has to reckon with is how to remain as profitable as possible without overextending itself. Some of the chief concerns here include managing inventory and balancing production. Among other things, the IoT will allow us new levels of efficiency when it comes to just-in-time production, for example. That means running as lean an operation as possible.
It's all about forecast accuracy. Performing our work with ever-smarter machines by our side improves our forecasts by giving us better and more complete datasets to work with. Research finds that companies that excel at forecasting future demand end up running their organizations with 15 percent less inventory on average, 17 percent higher rates of error-free order-picking and 35 percent improvements in business cycle times in general.
All this translates into a more efficient, and consequently profitable, business. The IoT makes it possible.
Issues of Trust and Visibility
A recent survey indicated business is catching on quick when it comes to the benefit of internet-connected devices, machinery and vehicles. Of a surveyed 84 businesses, 37 percent indicated they were actively pursuing the adoption of IoT technology in their outfits. That might not sound like a big number, but it’s a pretty impressive adoption rate when you consider that IoT is not yet, at least not quite, a household term. Tech-minded consumers are already dabbling in the IoT thanks to smart home products like lightbulbs and garage door openers, but they don’t always call it by this new name.
However, the business world has been quick to catch on. Whereas gathering information from among multiple vendors and shippers and facilities used to be very difficult and unreliable, manufacturers will now have far more direct, more personalized and more actionable access to data all along the supply chain. Having several parties involved in any given process can often yield confusing or contradictory data — or even no data at all. Trust issues can be very real. Now, there’s a new way forward.
Leveraging the IoT in shipping can yield the ability to track every single individual item as it changes hands, rather than forcing you to rely on batch orders, trust or chance. This is either because the product itself might be internet-connected—either directly or through RFID chips in packaging— or because the apparatus that manufactures, inspects or moves that product to its destination is internet-connected.
The point is, everything about our products and how we make and handle them is in store for major changes. We will enjoy a wealth of new ways to more granularly and personally observe the progress of individual pieces of inventory as they move about the country and the world.
Service Expenses and Fleet and Machine Management
Maintenance is nobody’s favorite to-do list item, and yet it’s necessary in modern life. Consider how many machines with disposable components are involved in the design, prototyping, manufacturing, handling and distribution of a given food, textile, pharmaceutical or electronic product. It's nearly too many to count.
Thankfully, the IoT is literally making our machines self-aware, at least in limited ways. Supply chains of the near future will be staffed with machines that can monitor their own maintenance needs, alert the appropriate staff when worn-out parts need to be replaced and generally reduce the amount of mental and operational bandwidth required to keep our mechanical operations running smoothly. Expect a sharp decrease in downtime as your workflow improves and becomes more predictable.
From daily warehouse operations to managing inventory, streamlining new product development-clarifying logistics and making data more visible, there are few aspects of modern commerce, manufacturing and distribution that won’t see a productivity bump from the IoT. And this technology is already here, today. What will you make with it?