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How is IoT ecosystem revolutionizing Supply Chain networks and Logistics?

The world is adapting itself to the digital age changes. We are getting more familiar with the terms of the disruptive technologies that are making it happen. Internet of things (IoT) is one of them. The term was coined by in 1999 by Kevin Ashton, a British technologist. It refers to the connected ecosystem of devices and gadgets, which is benefiting businesses and industries of all types. These devices can be RFID chips, smart devices, or mobile sensors. According to Gartner, by 2021, one million IoT devices are going to be purchased and installed each hour. Logistics and supply chain management is one of the beneficiaries of this technology.

The Council of Supply Chain Management Professionals defines a supply chain as the “companies that participate in the design, assembly, and delivery of a particular product.” By tracking goods, management, forecasting, and oversight applications,IoT is set to improve the operational efficiencies, revenue opportunities,and add transparency to decision-making in this sector.

For example, the supply chain for bananas involves suppliers of seeds, growers, distributor networks, facilities for storage and ripening, logistics, and grocery stores. Along each step of that journey, there exist a variety of challenges. For example, what if a shipment gets lost? How do stakeholders know exactly where a shipment may have been lost along the supply chain? Additionally, there are implications for storage conditions, given the banana has a limited shelf life that can be extended or reduced based on external circumstances. Who is responsible if a large shipment of bananas arrives spoiled at the grocery store?

Here are the most prominent effects of the IoT supply chain revolution:

Real-time location-tracking: Using IoT trackers, one can get real-time updates on data regarding the location of the product and the transportation environment. Supply chain managers will be alerted if the product is shipped in the wrong direction and will be able to monitor the delivery of ready goods and raw materials. E.g.,  Amazon is using WiFi robots to scan QR codes on its products to track and triage its orders.

Predict the transportation and the arrival of the product: The amount of options supply chain managers get using IoT devices improves the quality of decision-making and increases the accuracy of delivery forecasts. Real-time tracking enables a supply chain IoT company to predict the final delivery date, identify and mitigate risks before they occur.

Monitor Storage Conditions: Perishable goods like food and hazardous goods like chemicals need to be stored in ideal conditions. Specialist IoT devices can monitor areas like temperature, humidity, exposure to an atmosphere, light intensity, and other environmental factors. These devices may even trigger an alarm if certain thresholds are breached. This makes it much easier to track the quality of goods through the supply chain and to reduce spoilage.  E.g., New Maersk Line piloted its remote container management in 2016. This system helps to gauge the temperature, the humidity of the goods, monitor sea conditions, and improve the precision of weather conditions planning.

Improve contingency planning: IoT devices help supply chain managers plan routes, taking into account the number of accidents or other delay-inducing occurrences that happened on the highway. The Internet of Things curates all data needed to develop flexible contingency plans and get to the cause of existing delays. The technology offers supply chain managers real-time alerts that increase the speed of risk mitigation.

The benefits of using IoT in supply chain management are higher transparency, improved flexibility, better segmentation, and increased efficiency and speed. It helps in the efficient storage and distribution of products due to the more accessible location of goods in warehouses. Also, it case of any issues in the usual routes, IoT can suggest alternative routes to the delivery of products in the given time. There are many more use cases for the use of IoT in the supply chain, such as transportation and last-mile delivery to the end customer. Despite all the advantages, for successful transformation and up-gradation of supply chain network and logistics, through IoT, all members and stakeholders must be ready to introduce it into their framework. With the advent of edge computing and Blockchain, one can expect to see more such changes in the future.