The Internet Of Things ( IoT  ) in Supply Chain Management

The Internet Of Things ( IoT ) in Supply Chain Management

25/01/2017

Having just returned from the Global IoT (Internet of Things) Expo, there are a number of sectors which really stand out to me to be significantly affected in the next 2 years. 

One of the main areas is that of Supply Chain Management and Logistics. The movement of "stuff" from one area to another with an ultimate destination, has been at the core of industry for centuries. 

Although for many, the phrase IoT is associated to electronics or wearables, the Internet of Things is set to change many daily operational tasks across numerous sectors. 

Research carried out by Gartner suggests that many supply chain professionals have been trying to weigh up what the IoT evolution will mean to them. One key message is that it will certainly affect the way we think about logistics. Gartner goes on to state that there will be a 3 fold increase in connected devices by 2020, others quantify this as somewhere in the region of 50 billion devices being present by that time. 

This increase will heavily effect how supply chain leaders will access information and data on a minute by minute basis. The whole operational strategy will change significantly. Such a change needs to be carefully planned with objective management from this point on. 

Even those who do not choose to adopt an IoT solution for themselves, will have to embrace what is tipped to be the 4th Industrial Revolution. Having been at the Expo, we are much further on than reports have previously indicated. In my opinion, logistics will be one of the first to really see sector wide adoption and the associated expectations of such adoption by clients. 

The introduction of IoT will see the intelligent connection of people, data, processes and other "things" through devices and sensors. This will work hand in hand with the ERP and supply chain management (SCM) systems, providing rich data, insights and experiences beyond anything seen to date. 

Such rich data will present many benefits, from; enhanced warehouse visibility, improved customer interactive experiences, cold chain management or improved production processes. 

In-Transit Visibility

One key area of interest for many, is that of enhancing In-Transit Visibility. We all know that the eco-system in logistics is made up of many moving parts. The journey of the product may pass through many different hands during this journey - manufacturers,  suppliers, retailers, distributors and of course, the end user. 

One huge change which has been seen in the last few years is that of consumers buying direct from the manufacturer. This in itself present logistics firms with a number of new problems, albeit good ones. Their customer persona has changed, no longer are they dealing with commercial personas, they are now having to deal with the end user. We all know that expectations of the said end-user can differ greatly. Consider how your amazon order is processed and the lines of communication between you and the delivery operator. Expectations have been set at a high level, transparency,  2 way communication and flexibility are all words which spring to mind when considering such a process. 

So, how can the IoT not only bring logistics and SCM up to speed but move to the next level? 

At the backbone of in-tansit visibility is GPS and Radio Frequency Identification (RFID) connection with the cloud. The data delivered can range from location, identify, temperature and other tracking information. The harvest and subsequent data interrogation will promote full transparency at each stage of the logistical and SCM journey. Of course, how it is presented is another distinct area requiring attention and laser focus. We start to get into the realms of User Experience and User Interface Design. I won’t go into too much detail on this, as that in itself is a lengthy blog article, you may be interested in reading a little about it here

Gathering this data can not only allow for detailed delivery information to be recorded and communicated, embracing an ethos of “producing excellent experiences”. There are many other key benefits to such as monitoring temperature, impact, velocity. 

I will try and explain the application little better. If you place an RFID tag on a pallet which is placed on a truck with a corresponding receiver and transmitter, the information of the pallet will not only be delivered to the cloud but that of the truck and driver. Such data may include, time, speed, temperature, driving patterns and location (through GPS). As we often do at Boxmodel, we then fuse this data with other data feeds such a Weather and traffic reports. This then produces incredibly valuable data through algorithmic predictions, such as potential delays. 

Such fusion of real-time data with environmental data can provide highly valuable intelligence to all stakeholders in the SCM eco-system, allowing for efficient decision making promoting overall productivity and efficiencies. Such application can move what has historically been a reactive environment into very much a pro-active one, through the early receipt of information. 

So, think back to my example a moment ago. If through the use of open source feeds we can identify that the proposed route is subject to increased congestion, pro-active adjustment can reduce the potential impact. Such context-aware intelligence is highly enhanced by IoT applications. 

Essentially, the key message is that the implementation of IoT in SCM and Logistics has many benefits, through the supply of richer data, deeper intelligence for all the stakeholders in the supply chain eco-system. 

Remember, this doesn’t just apply to product visibility. Machine to machine or device to device communication applied correctly can: 

  • Optimise route planning and thus fuel efficiencies
  • Increase assets security - early identification of product issues
  • Stock Management
  • Data Harvest from user insights - sensors can monitor customer behaviour and product usage
  • Reduction in deadhead miles
  • Temperature control- this is a significant cost in terms of food waste each year

In summary, logistics and SCM companies need to consider the IoT now, consider how to implement it in operations. The whole IoT prospect for this sector is very much set to be part of the larger picture in the emerging digital business landscape, through interconnected devices, enabling better planning, working smarter, harvesting rich insight data and ultimately increased effective decision making. Couple this with Machine Based Learning (watch this space for another Blog) and we will change the landscape as we know it. 

There are many companies out there claiming to be experts in this field. Defining an expert is brave, but from our perspective, ensuring that clear objective planning is at the core followed up by delivery from highly experienced software and hardware specialists is key. 

Do feel free to contact me directly is you wish to speak about how this could affect you. paul@boxmodel.co.uk

 

 

 

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