IoT has the potential to transform various industries and sectors, including supply chain management. Supply chain management is the process of planning, executing, and controlling the flow of goods and services from the source to the customer. IoT in supply chain management can be enhanced by providing real-time visibility, condition monitoring, forecasting, optimization, and risk mitigation. In this article, Nexle Corporation will discuss how IoT can improve supply chain performance, efficiency, and sustainability, as well as the challenges and opportunities that IoT presents for supply chain managers.
Use Cases of IoT in the Supply Chain
In order to better understand the benefits and challenges of using IoT in supply chain management, it is helpful to examine real-life examples. Use cases provide specific instances of how IoT is employed to solve problems or create opportunities in managing supply chains.
Through the examination of these use cases, a clearer understanding emerges regarding the enhanced efficiency that IoT brings to various operations. Additionally, we will know how IoT enables effective monitoring, better quality control, and more sustainable processes within the supply chain.
Smart Warehouse
The Smart Warehouse makes use of machines and computers to manage routine tasks such as moving racks and labeling products, among other things. It was a task that humans had performed in the past.
1. Amazon
All of Amazon’s heavy lifting and running errands are performed by robots. While working with the robots in their duties, humans could pay attention to tasks that need agility and the ability to think critically. The warehouse floor is covered with QR codes to help self-driving cars find their way around. Thanks to the automation made available by IoT in supply chain, Amazon can now stock twice as much product and retrieve it in a third of the time. Further, 40% savings has been achieved in fulfillment costs.
2. Nissan
The Internet of Things development service has been beneficial to Nissan in several respects. The first company utilizes the Internet of Things to monitor car shipments to overseas consumers. In contrast, the second company adopts an Internet of Things-based warehouse management system at its facility in the United Kingdom.
Remote Container Management
The RCM (Remote container management) system enables the tracking and real-time monitoring of temperature and humidity inside refrigerated containers, regardless of their physical location. The power connection status may be seen at any moment while the ship is in transit.
RCM is an application of IoT (Internet of Things) technology in supply chain management
3. Maersk
Maersk, a leading Danish corporation in the shipping and logistics industries, is responsible for developing a system called Remote Container Management. Perishable cargo spoiling may be avoided, waste can be cut down, and transportation schedule accuracy can be enhanced by using this system to monitor the temperature and humidity within shipping containers.
4. Aker
Agricultural suppliers benefit from Aker Technologies, an ag-tech company that offers an Internet of Things (IoT) system. This system utilizes drones, 3D video sensors, big data solutions, and machine learning. Using those products can detect crop damage caused by various circumstances and take appropriate corrective action as soon as possible.
5. Volvo Group
Volvo, a renowned company, exemplifies the various applications of IoT in the supply chain. They employ a cloud-based networked system to track car parts during their international shipments. Through the Internet of Things, Volvo can effectively monitor the whereabouts of their vehicles as they move across the globe to reach their suppliers.
Predictive Maintenance Solution
By using sensors, artificial intelligence, and data science, helps improve the maintenance of equipment. Because of this, the lowest maintenance costs are reduced while the amount of time the system is operational is increased.
6. NJTA – New Jersey Transport Authority
One organization that has successfully used IoT in the supply chain for better traffic management and rider protection is the New Jersey Turnpike Authority (NJTA). The data collected by Internet of Things sensors is used by the operators of traffic management systems as well as emergency services to enable faster response times at accident scenes and reduce congestion in the surrounding area.
7. DHL
The IoT capabilities of DHL’s system allow it to provide data to operators, who can then use it to guarantee a high availability of roller cages. To reduce the amount of energy that is used, DHL has set up a second Internet of Things operation that uses smart heating, ventilation, and air conditioning systems and makes changes in real time depending on factors such as the weather, the number of people in the building, etc.
Benefits of IoT in Supply Chain
Increased Visibility
From manufacturing to product sales, it affects the whole supply chain. Suppliers of raw materials may employ Internet of Things devices in supply chain to monitor the conditions that impact the reliability of their shipments in both time and quality. Such as keeping an eye on the well-being of crops, trees, and animals is a key component of agriculture, forestry, and livestock dairy farming.
Retail enterprises leverage IoT technology to enhance the accuracy of merchandise pickup and optimize material handling. By facilitating precise inventory management and providing valuable insights into customer traffic patterns, IoT enables merchants to effectively track items across shelves, giving them a competitive edge.
Better Collaboration
In the realm of businesses, those who still rely on outdated systems lacking data analytics capabilities face a notable challenge. However, with the implementation of cloud computing and data analytics, IoT-based solutions offer a way to remedy this situation. These solutions empower all teams within the value chain to collaborate using a unified and accurate dataset. Consequently, this not only enhances teamwork but also facilitates faster issue resolution.
Maximising Assets
Supply chain managers and logistics teams may optimize fleets, offer better route planning, and discover delayed assets with the enhanced connection now achievable by the IoT in supply chain. This can result in a reduction of almost 25 percent in driver hours. Additionally, these organizations can track the productivity of their assets, allowing them to make operational adjustments that increase output.
Better Customer Service
In successful supply chains, managers meet the delivery needs of their customers quickly and accurately. This leads to improved customer-business interactions and overall success. Real-time tracking of shipments and products allows for precise arrival time estimates and the ability to address delivery issues promptly. Managers can also make alternative delivery arrangements to meet service-level agreements.
Real-time Tracking Of Sensitive Goods
Supply chain management has always struggled with a significant obstacle known as asset tracking. Companies are responsible for checking that their inventory, both coming in and departing, is going to the correct destinations.
IoT asset-tracking devices enable businesses to monitor the whereabouts of their merchandise, shipping containers, and company vehicles in real time. This allows them to promptly identify any delays and have peace of mind knowing that their valuable assets are secure. By configuring geo-fencing, notifications can be received whenever a tracked object enters a designated area.
Forecasting Accuracy
Many businesses in the manufacturing and distribution industries continue to use outdated forecasting techniques. However, with the help of IoT sensors, they can move away from relying solely on estimates and transition to consumption-based planning. By keeping track of inventory, including existing items, businesses can gather the necessary data for making crucial decisions. Complex analytics can then analyze this information to find valuable insights, such as improving manufacturing times and avoiding product oversaturation.
Esg Compliance
Organizations are increasingly focusing on health and safety best practices and ESG issues. They want to ensure they comply with the law and meet the social standards expected by investors, customers, and other stakeholders. One effective solution they’re using is the data collected from Internet of Things sensors. This data allows them to make well-informed decisions and implement ESG compliance strategies quickly, reliably, and at a low cost.
Inventory Control
Supply chain and warehouse management would be incomplete without inventory tracking and control. IoT devices play a crucial role by monitoring stock levels and inventory locations, improving overall management and performance. Supply chain managers, such as those in distribution and transportation, may benefit from the accurate information IoT-enabled inventory monitoring systems provide.
Warehouse Automation
Automation has become more important in modern companies since it helps cut down on manual work, labor costs, the potential for human mistakes, the time it takes to provide resources and other factors. With the help of IoT, the manufacturing supply chain may finally implement the vital automation of the preceding management and industrial operations. Warehouse management drones may be used as an Internet of Things tool or a whole infrastructure can be built and managed remotely for overseeing logistical processes.
Paperwork Management
Employees often complain about paperwork, and in last-mile logistics, truck drivers carry most of the responsibility. Businesses may save time and effort by using smart logistics solutions to automate administrative processes like checking the accuracy of a trucker’s freight broker bond or handling a bill of lading, a document given by a carrier that proves receipt of products for transportation.
Read more: What are IoT Devices? All You Need to Know
Challenges of IoT in Logistics and Supply Chain
Sustainable Connection
Many Internet of Things platforms and devices depend on ongoing access to the internet and other short-range technologies like Bluetooth and Near Field Communication. This problem will be fixed mechanically when internet usage grows, and 5G becomes widely accessible.
Skill Gap
Employees in the warehouse and those operating company vehicles need to be trained on the best safety practices and guidelines for utilizing IoT-based supply chain management systems.
Data Storage
Potential advantages and disadvantages might be found in the huge information pool generated by IoT devices. A sufficient amount of server power is required in order to store and analyze the gathered data. In addition, data governance regulations have to be in place so that accurate conclusions can be made.
Security Threats
A safe Internet of Things framework is required before going all in on connected devices. Data leaks and other forms of external attack are possible results of weaknesses in the system. Machine learning (ML) and cryptographic hardware monitoring are two ways in which managers may lessen the impact of security risks.
Read more: IoT in Manufacturing: Top 8 Trending And Use Cases In 2023
Supply chain management can be transformed by the powerful technology of IoT. By utilizing IoT devices and sensors, managers gain better insight and control over their operations. This leads to reduced costs, less waste, improved customer satisfaction, and increased loyalty. Additionally, IoT enables the achievement of social and environmental responsibility. However, IoT in supply chain management is not a one-size-fits-all solution but rather a tool that can be customized and integrated with other technologies to create value for the supply chain and society.
