The growing number of devices that are being connected has made the Internet of Things (IoT) a key technology for businesses across industries, and the supply chain is no exception. The tightening market competition combined with the complexity of consumer demands and digital disruption has driven retail chains to redesign their operations. The global IoT market is projected to grow from $157b in 2016 to $457b by 2020. Leading all the industries in IoT spending will be manufacturing, logistics, transportation, and utilities.
The IoT is capable of impacting all aspects of the supply chain, from better tracking of assets to controlling inventory and limiting inefficiencies. The metrics and KPIs used in IoT are capable of improving the speed, accuracy, and scale of supply chains while redefining compliance, quality management, and manufacturing intelligence. By applying big data and IoT, businesses can speed up implementations, automate restock options, monitor equipment, forecast demand, and achieve much more.
Let us take a look at how businesses can leverage IoT to create an integrated Supply Chain Management (SCM) system.
Warehouse automation will witness the highest growth rate as the competitive benefits are enormous. Businesses can better utilize their warehouse space as they can optimize capacity and inventory management with IoT. Compared to traditional forklift operations, automated warehouse systems can increase the storage capacity by 400%. In addition, Radio Frequency Identification (RFID) and other connected devices can help automate the asset tracking as well as the real-time shipping of inventory.
The large amount of data produced by big data and IoT can be used to gain insights and reveal patterns of crucial production units, through which logistics providers can make better and faster inventory-related decisions. IoT-powered inventory management and automated warehousing systems can further increase the capacity a hundred times higher than the traditional operations. Since it is also connected to a central database, logistics can serve the entire supply chain from raw material delivery to manufacturing and the finished product delivery to stores.
As IoT continues to impact transportation initiatives, businesses can use this opportunity to leverage the data to streamline processes from the first to the final mile. Globally speaking, nearly $43b tons of trade goods are transported by air freight, $9.5b tons by boat and $8b by road. Being an expensive variable in the supply chain cycle, understanding optimizations in transportation can uncover a large cost-saving opportunity in freight forwarding, trucking, and postal services.
IoT can provide that additional visibility, allowing ships to be tracked with the help of an automatic identification system. This system transmits the data between ships, stations, and satellites enabling milestone tracking and elimination of wait time. Fleet management systems can also monitor truck fleets’ idle time, speed, downtime, and other important metrics, which saves logistics providers’ time and money. By integrating the RFID systems, computers, and mobile scanners, organizations can gain end-to-end visibility into their assets and streamline their operations better to keep their fleet moving.
Manufacturers can use IoT-based solutions including digitized workflows, greater collaboration, and innovation to improve the safety and efficiency of their workforce. Cognitive insights gained from integrating the IoT can be used to optimize resources around production, thereby improving the expertise of the workforce. IoT technology also enhances workplace safety by tracking the movements of people and machines and identifying the movements that pose a greater risk.
With IoT-enabled tracking and monitoring, warehouse operations can be made more efficient, as businesses will be able to enact better processes. RFID-equipped tools can help track warehouse associates and aid in understanding shipping related processes. Secure monitoring of the equipment and environment in real time also helps field technicians take action before any problem arises. As IoT advances, logistics providers and SCM companies need to embrace the IoT-enabled technologies to stay one step ahead of the competition. The revolution will bring in great improvements in the industry, with the potential to reveal insights through the entire process. Everything from fleets to individual sensors can be monitored and analyzed to improve cost-effectiveness and efficiency. Streamline the entire chain through ERP planning software that can change your data into actionable insights. Talk to us today.