The Internet of Things (IoT) is one of the biggest buzzwords in business. However, it’s more than just hype. IoT technology is starting to change supply chain methods already.
For the uninitiated, IoT is a surprisingly simple concept. Small sensors and devices now feature Internet connectivity, via wireless telecommunications. These are the ‘Things’ in IoT.
These connected devices can read data at many real-world locations, and can share it immediately with a central application via the Internet. This could make faster analysis and decision-making possible, leading to ‘smart factories’ that can innovate easily. Many are calling this a fourth industrial revolution, or Industry 4.0.
It’s not hard to imagine how useful the IoT could be in supply chain management. Here are three ways it’s already shaping the future.
Good supply chain management relies on accurate demand forecasts, which in turn inform effective inventory management rules. Traditionally, the data informing a company’s forecasts and rules has been collated daily, weekly, or even monthly. Now, as Deloitte Review writes, IoT systems can gather and process inventory data immediately.
These ‘cyber-physical systems’ (CPS) are constantly:
· gathering real-world data;
· sending it back to cloud servers for analysis; and
· receiving updated instructions based on that analysis.
This creates a real-time information loop, so that forecasts and inventory decisions are more accurate. Supply chain management systems could effectively self-configure, thousands of times per day. This will lead to innovations that reduce waste, cost, and human error.
IoT is also impacting the logistics side of supply chain management.
For some time now, embedded technologies such as RFID (radio-frequency identification) tags have allowed business managers to track a product’s journey through the assembly line. The data supports better process controls and efficiency.
Now, as Inbound Logistics describes, GPS tracking and internet connectivity are being added to these systems. The result is in-transit visibility across the whole world. Benefits will include reduced asset loss, better inventory management, and greater delivery fleet efficiencies.
Looking a little further into the future, new autonomous vehicles such as Amazon’s mooted delivery drones will also shape the future of supply chain management.
In theory, the drones can fly to any address to deliver goods with no human operator. These vehicles could fulfil orders, replenish stock, and meet other warehouse demands based on up-to-the-minute data. They will also work around the clock for no pay!
The IoT is changing business in a big way, with 81% of US companies planning to deploy solutions before 2019 according to a Machina Research study.
Are you ready to compete on these new terms?
If any of our observations strike a chord with you and your business; or you have more questions then please do get in touch. We would really like to hear from you.
Hexagon works with businesses on supply chain and business improvement. We utilise class-leading analytics and business intelligence, to quickly understand your challenges. We then provide implementation and ongoing support, to deliver the results we have identified are possible. We are passionate about helping you to succeed.
E-mail us on firstname.lastname@example.org or call us on 0113 873 0040.