The global supply chain landscape has become increasingly fraught over the past few years.
In the wake of the COVID-19 pandemic, supply chains have contineud to face near-constant disruption. These pain points have ranged from climate-crisis-fueled droughts to geopolitical conflict. Rising prices and economic instability have conspired to destabilise the sourcing and movement of goods around the world. As a result, a greater focus on resilience over cost has crept closer to the top of the CSCO’s agenda.
However, it’s hard to identify how to protect a supply chain from disruption — let alone leverage that supply chain to create new value — without strong visibility into that network. This is where Internet of Things (IoT) technology is supporting supply chain managers and CSCOs. The technology provides new levels of visibility, resilience, and control over their operations. Defined as a network of physical devices and sensors interconnected digitally and used to gather information, the IoT is making supply chains smarter, easier to track, and better prepared for the unexpected.
Here are five of the ways that IoT technology is transforming the supply chain.
Tracking shipments
One of the most obvious and straightforward applications for IoT in the supply chain is digitising the tracking process. Traditionally, updates on goods moving through the supply chain have been sporadic, or nonexistent until the final delivery.
IoT sensors enabled with GPS are changing that, however. For high value items, IoT technology like GPS trackers, RFID tags, wireless temperature sensors, and other devices can ensure that goods can be monitored at every stage of their journey. Customers using something like FedEx’s SenseAware or SAP IOT Logistics can track cargo for changes in environmental conditions, location, delays, and even alterations to routes.
Cold chain management
The cold chain is a temperature-controlled supply chain that moves, stores, and distributes sensitive and perishable goods. This can include vaccines, chemicals, sea-food, meats and dairy products.
As any deviation from the ideal temperature range can affect the freshness of food and the efficacy of medicines, proper monitoring of the cold chain is essential. IoT sensors that issue an alert if the cold chain is broken are a critical piece of the puzzle for supply chain managers attempting to gain visibility into these complex and critical systems.
Sourcing authentication
Whether it’s specialty coffee that needs to be traced from a single point of origin to the small batch roaster, or a multi-million dollar shipment of lithium that needs to reach an EV battery manufacturer without touching a Chinese-owned processing plant, regulations are making it increasingly important to have verifiable visibility into every step of the sourcing and supply chain process.
However, some industry experts have argued that basic IoT-based supply chain management systems fail to provide confidentiality and security. In combination with blockchain technology, IoT devices can more reliably authenticate the origin and subsequent steps in the journey of a product or material. This allows organisations to avoid ptential goods seizure or tariffs when entering new markets, and comply with ESG commitments.
Warehouse automation
Artificial intelligence and machine learning have been applied to great effect by logistics teams. The technology has significant potential to help pick, arrange, and otherwise move goods through warehouses. Amazon has been using an increasingly sophisticated variety of robots in its warehouses since 2017. The global market for warehouse automation was valued at $16.23 billion in 2022. It is expected to hit around $71.03 billion by 2032.
However, AI tools and automation platforms need a bridge between the digital and physical worlds in order to work. IoT forms that bridge, allowing digital tools to gather accurate data in real time about the physical world. The information gathered from these IoT sensors can then be used to pilot fleets of robots. It could also direct human pickers, control the ambient temperature, schedule deliveries, and oversee numerous other warehouse management tasks.
Predictive analytics
IoT can not only provide critical insights into what’s happening in the supply chain right now. The technology can also use the data it gathers, in combination with AI, to make educated guesses about the future. IoT creates huge amounts of information constantly. Sensors placed throughout the supply chain, from warehouse operations to transportation and delivery are continually reporting on location, temperature, time-to-process, and other useful information.
With the application of digital tools, this data can be used to forecast trends, pain points, and demand patterns. At a time when supply chain managers are overwhelmingly preparing for a future where disruption is the norm, rather than the exception, predictive analytics using IoT-derived data are a vital tool.
- Digital Supply Chain
