The Internet of Things (IoT) is often thought of as electronics or wearables – the kind of technologies that are used and customised by an individual consumer. However there is a much bigger story – the IOT supply chain.
The IoT supply chain growth
Industry research by Gartner highlights that the Internet of Things (IoT) is going to impact businesses with its exponential implementation reaching 26 billion devices by 2020, “…IoT product and service suppliers will generate incremental revenue exceeding $300 billion, mostly in services, in 2020. It will result in $1.9 trillion in global economic value-add through sales into diverse end markets.” This increase will “significantly alter how the supply chain operates.” As devices are embedded with technology that can communicate and interact with other devices, supply chains will be impacted. Specifically, how supply chain professionals access information.
Increasing visibility throughout the distribution supply chain
Distribution logistic systems are made up of many moving parts, products can be handled and transported between manufacturing, suppliers, the distribution centre, retailer, and finally to the end customer (and sometimes back again). With so many transaction points within the supply chain distributors need a responsive and informed supply network.
How does IoT facilitate the agile supply chain?
IoT is further enabled by GPS and RFID (radio frequency identification) technologies to transmit data such as fleet location in real-time. Detailed visibility of an individual item can be provided directly from the manufacturer to the retailer. Not only can distributors automate shipping and delivery by exactly predicting arrival time; they can monitor vital details like temperature/humidity control, which may impact the product in-transit. IoT technologies can also bring in other data like weather conditions, traffic conditions with possible re-routes, and driver-specific data (i.e., driving pattern, rest times, average speed).
Combining real-time sensory data with environmental data can provide superior intelligence to all supply chain stakeholders. This allows decisions to be made that drive overall productivity allowing operatives to be proactive. For example, information about a traffic jam before the trip starts has much higher value than getting the alert when the fleet is already stuck in the traffic. Applications such as Prodware’s Mobility suite can feed information directly from the business management system to remote workers in the field on nearly any device.
IoT supply chain benefits
The benefits stretch beyond just operational efficiency, by allowing devices to “talk to each other” in the right way, IoT can help supply chain professionals:
- Reduce product losses with real-time updates allowing proactive monitoring
- Reduce fuel costs with optimised fleet routes by monitoring traffic conditions in real time and re-routing fleet
- Manage warehouse stock by automatically monitoring inventory levels to reduce out-of-stock situations
- Establish customer insight with embedded sensors which can provide visibility into customer behaviour and product usage
- Increase fleet efficiencies – in the United States deadhead miles (non-revenue miles) can account for up to 10% of total fleet miles, according to the EPA, and 28% for private fleet.
- Monitor equipment and carry out preventative maintenance ( This is discussed in detail in our previous blog using the example of Rockwell Automation – Predictive and preventative maintenance with Microsoft’s Azure IoT Suite)
- Monitor temperature stability to reduce waste; many products need to maintain a certain temperature during transit – the Food and Agriculture Organisation of the United Nations, highlights that one third of food perishes in transit every year.
- Identify inefficiencies – For example, a container may land at the distribution warehouse but not be unloaded until several hours later. With IoT, Operation Directors can establish when a container has been received and the time lag between arrival and inputting into the system, to set KPIs and correct inefficiencies.
Deeper intelligence into supply and demand will not only benefit manufacturers, distributors, and retailers, but also consumers, as their demands can be more thoroughly understood with a further level of intelligence.
Bringing it all together – IoT and the supply chain
The real value of the IoT for distribution is in connecting the infrastructure to broader business process software, to successfully combine IoT data with business transactional data in one shared database.
ERP and supply chain management have been partnered for quite some time, IoT technology enhances ERP and CRM solutions such as Microsoft Dynamics NAV, Microsoft Dynamics CRM and Microsoft Dynamics AX, by intelligently connecting people, processes, and data via devices and sensors. This deeper intelligence can come to life in many different ways when it comes to supply chain data and intelligence – from automation of the manufacturing process to improved visibility and best practice within the warehouse. Connected devices enable organisations to work smarter, plan better, and foster more intelligent decision making processes. To find out how your business can benefit from integrated technologies contact Prodware today.