Global supply chains are undergoing dramatic disruptions in the wake of rapid technological advancements, changing customer expectations, and pandemic-related upheavals. This article explores how businesses can use IoT solutions to streamline their supply chain.
As the world becomes more connected and technology advances, we are seeing a surge of new opportunities to optimize global supply chains. Never before has it been so easy to monitor and manage inventory and product flows across geographical boundaries. Emerging technologies like the Internet of Things, cloud computing, data analytics, and artificial intelligence are helping businesses drive efficiency and reduce costs across the board.
Within the next decade, IoT is expected to connect half of all physical assets
on Earth. That's a whole lot of sensors and equipment that will be capable of collecting and sharing data. Because supply chains essentially involve the movement of assets from one point to another, this growth is set to have a massive impact on supply chain management (SCM).
In today's article, we discuss how IoT advancements are shaping the future of supply chain management and processes.
How Does IoT Relate To Supply Chain Management?
The Internet of Things is a fast-growing topic in the business world, and its scope spans from improving manufacturing to enhancing retail. One of the most beneficial capabilities that IoT brings to the table is its potential to improve supply chains by positively impacting the processes, tools, and technologies involved in product and service delivery.
A new report by McKinsey Global Institute
estimates that by 2025, IoT could improve supply chain productivity in companies worldwide by as much as $1 trillion annually through;
- 12% reduction in inventory costs by streamlining processes and optimizing resource management
- 6-9% growth in sales revenue due to faster delivery times
- 4-6% improvement in customer satisfaction through product availability and deeper market insights
Using IoT To Streamline The Supply Chain
In supply chain management, tracking and monitoring are the two primary goals for IoT implementation. IoT enables warehouse and fleet managers to keep a closer eye on their inventory and respond quickly to abnormalities.
However, the Internet of Things can offer a lot more value than just asset management. Here are five convincing reasons to use IoT in SCM.
1. Streamlined Supply Chain Processes
The possibilities for improving the efficiency of your supply chain processes with IoT are numerous. For example, sensors placed throughout a warehouse or factory can give inventory managers the data they need to decide when to restock supplies, which raw materials to replenish, where to ship products, products, how to plan resources, and so on.
In the field, IoT tracking devices can give you an accurate view of a shipment's position at all times, enabling you to make the necessary downstream arrangements well in advance for a smooth-flowing supply chain.
2. Reduced Operational Costs
IoT solutions, if well implemented, connect to your company's data flow and create open communication channels within teams, departments, and trading partners, enhancing transparency across the supply chain.
For instance, IoT devices that deliver real-time location updates about goods-in-transit to all involved parties create a cohesive, well-aligned ecosystem that can identify and respond to disruption with greater agility and efficiency. That way, you and your partners can avoid unnecessary expenses like storage charges, demurrage, and reshipment costs.
3. Deeper Customer Insights
IoT can enable your company to gain better insights into consumer patterns and preferences in several compelling ways. For instance, embedding sensors within products can be an effective way to determine usage trends and collect valuable feedback for product improvement.
In warehouses, IoT devices can track item movement and create accurate, continuously updated classifications of fast-moving and slow-moving products. With this data, you can develop marketing strategies that are well aligned with customer needs.
4. Reinforced Asset and Resource Protection
The Internet of Things assures asset protection by enabling on-demand repair services. IoT sensors embedded in machines, equipment, and vehicles can deliver timely performance updates to technicians, allowing them to deploy effective progressive maintenance.
Similarly, sensors in inventory items can make it easier for warehouse and logistics managers to address damaged inventory, minimize losses, and improve customer satisfaction.
5. Improved Resource Management
IoT solutions have demonstrated value through automation. In warehouses, connected barcode scanners deliver real-time inventory data and machine monitoring services to operators, minimizing the time and resources required to track stock and inspect equipment. Consequently, staff can be free to take up more strategic, impactful tasks.
Additionally, an IoT system with GPS capabilities can help you keep track of staff members in the warehouse or the field. You can then use this data to identify resource gaps or inefficiencies and implement measures like hiring new staff, relocating personnel to understaffed activities, rerouting delivery trucks, or downsizing your team where appropriate.
Achieve Supply Chain Agility With The Right IoT Solution
In a highly dynamic and disrupted supply chain, flexibility and agility are critical requirements of success. Your business must be well equipped and ready to respond to unprecedented situations at all times.
IoT solutions can profoundly affect supply chain responsiveness by enhancing how you monitor processes, disseminate information, and make decisions. By utilizing IoT technology, you can improve your ability to meet changing demands, reduce wasted resources, and achieve a formidable competitive edge.
If you are in the market for IoT solutions and services tailored for supply chain management, you have come to the right place. IoT2Market is the most comprehensive online IoT marketplace.
Create a free IoT2Market
buyer account and get your business one step closer to a streamlined, robust, IoT-powered supply chain.