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The Supply Chain And The Growth Of IoT

How is the supply chain set to evolve as the use of IoT increases?

12May

The Internet of Things is set to have a huge impact across every industry and sector in the coming years. Gartner, Inc. has forecast that by 2020 there will be 30 times more physical devices able to leverage Internet connectivity to communicate with one another. By that point, the number of installed units in the IoT will have risen from 0.9 billion five years ago up to 26 billion.

The supply chain is set to be one area to see the most disruption from the growth of IoT. The benefits are numerous. Manufacturers will be able to achieve new levels of efficiency and vastly improve their use of resources - vital in a global supply chain in which managers must optimize their organizational structures across oceans and continents.

This will happen in a number of ways, some of which we are already beginning to see.

With new IoT technologies, companies will be able to draw more insights into their manufacturing operations than ever before using real-time data flow. One way that this can be used is the constant monitoring of machinery for signs of damage. This will allow organizations to deal with potential problems as early as possible, rather than waiting for them to pass crisis point. Not only does this prolong the life of a company’s machinery, it could also prevent potentially dangerous incidents from occurring, even 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.

The ready availability of data that IoT technologies will bring is also set to provide a boon to understanding how many the different components throughout a chain link up. Stakeholders will have far greater intelligence at their disposal, and supply managers will be able to better optimize processes to cut costs.

Another key benefit lies in the increased ability to track products through the chain. Improved in-transit visibility helps keep the supply chain agile and allows certain processes and settings to be altered automatically in preparation for its. One example is the temperature setting in a warehouse, which can be changed so as not to negatively affect the quality of the product. The implications of such capabilities for costs are vast, as well as the environment. 

IoT technology can also help keep check on demand at any point in the chain. Automated messages can be sent as to where a product is needed, leading to better inventory designation.

All of these changes will require a great deal of re-skilling for supply chain professionals. They must adapt to the changing nature of their role and focus on getting the most out of the structure in place, as Michael Burkett, managing vice president at Gartner argues: "Supply chain teams will have to take ownership for coordinating the delivery of quality-perfect orders of these digital-physical products. This extends beyond developing and ensuring quality of a single device to managing the larger complexity of these connected systems."  

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