internet of things supply chain

How the Internet of Things (IoT) Supports a Resilient Supply Chain

Acceleration Economy CXO2

In How Cloud Computing Can Help Build a More Resilient Supply Chain, I described how supply chains and their challenges will remain front and center in the news and in government as long as consumers continue to suffer from lack timely delivery of goods such as computer chips, building materials and automobiles. I’ve highlighted some of the ways cloud-based technology could provide a solution to supply chain challenges and help the many business leaders struggling to meet consumer demands. In this article, I’ll dive into one of those technologies: the Internet of Things (IoT).

What is IoT?

Oracle describes the IoT as a “network of physical objects – ‘things’ – that are integrated with sensors, software, and other technologies for the purpose of connecting and exchanging data with other devices and systems on the Internet”. These “things” run the gamut from smart TVs and doorbells to motion-sensitive security cameras and temperature sensors for office HVAC systems.

While Oracle’s definition is true, it doesn’t really tell us why the IoT matters. We have millions of connected gadgets around the world providing massive amounts of data, but how does that help our supply chain issues? I have identified three ways the IoT can help, such as:

  1. Improved logistics traceability
  2. Allow scalability
  3. Improve micro-factory performance

3 ways the IoT supports the supply chain

1. Logistics traceability

An important aspect of improving supply chain issues is gaining a better understanding of where goods are at all times. Goods are constantly in motion, beginning with the transportation and production of raw materials, then through the manufacture of finished goods, and finally ending up on store shelves or direct-to-consumer delivery. However, the last three have seen many disruptions in this process.

From labor shortages in factories to low availability of shipping containers, the causes of supply chain slowdowns have been many and complex. That’s why the ability to get real-time updates on the location and trajectory of these goods can make all the difference in controlling and optimizing logistics processes.

Rather than depending on periodic manual updates, we can use the IoT by including tracking devices in packages or shipping containers. Think of it as the difference between having a tracking number that tells you “package received at regional hub” or “package in transit” and seeing a live feed of “where the truck carrying your package is right now.” Even in the warehouse, these tracking devices can let you know exactly where your pallets of goods are at all times, allowing you to more quickly locate products that need to be shipped or get real-time inventories. .

2. Scalability

As I mentioned in my previous article, one of the root causes of supply chain issues is the inability to adapt to changes in demand. Often, the mismatch between demand and supply is the result of timing: the knowledge that demand has increased comes too late to increase production, and lead times suffer.

Here, real-time processes combined with process automation and scalable cloud technology can help. By combining data provided by IoT devices throughout the supply chain with predictive analytics, you can receive a much faster alert that your demand is changing and requires rapid adjustment of supply parameters and increased or a reduction if necessary.

3. Micro-factories

Micro-factories are another way to leverage IoT to create an agile and resilient supply chain. What are micro-factories? Imagine small, highly automated production centers located at strategic points close to where materials or goods are needed. Micro-factories do not require large areas or spacious buildings and can be built and started much faster and cheaper than traditional factories.

Micro-factories allow companies to quickly increase production capacity while reducing shipping costs, making them an important strategic part of supply chain optimization. They rely heavily on the IoT to quickly make decisions about what to produce and where the goods should go. In a traditional factory you can walk around and make sure everything is running smoothly and see the process first hand, but a manufacturing system with many micro factories requires an automated system that can be modeled and analyzed in real time without the need to travel personally to each of these facilities.

Final Thoughts

I think these use cases only scratch the surface of what is possible for the supply chain using IoT devices. One way to get an idea of ​​how your supply chain could benefit from the IoT is to start by mapping out a process and asking yourself, “How much visibility do I have into the process at point A and point B and moving goods between point A and point B?” followed by “Which IoT device could provide this information?” and “What framework is needed to manage these devices? Fortunately, there are many specialized companies for you help ask and answer these questions. I’m very interested in seeing how these companies differentiate themselves and which cloud providers offer the best IoT engagement opportunities.

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