Five Ways IoT is Changing Supply Chain
By Rob Stevens
In a world where you can monitor everything from your refrigerator to your pets in real time on your phone, it’s no surprise that supply chain is experiencing its own IoT revolution. IoT, or the Internet of Things, refers to a new technology framework in which products are constantly connected and sending real-time data to the cloud. As supply chains grow ever more complex, companies are adopting new digital solutions built on an IoT foundation, and these solutions are enabling a new level of end-to-end visibility into in-transit goods. Below are some of the key ways in which IoT is changing the face of supply chain today.
New IoT technologies are helping companies gain and maintain visibility in every part of their supply chain. Always-connected IoT tracking devices can detect location, temperature, shock and other key shipment metrics, then send that data to the relevant people in real time. Some shipments last for weeks or even months and those in-transit goods can represent an enormous unknown variable for many supply chain managers. By incorporating IoT tools, managers are shedding light on those dark spots, gaining insight into vital information about their products and processes.
Greater visibility means managers have the information they need to reduce waste across their supply chain. Insight into the location and condition of a shipment before it arrives helps companies avoid delays, expedite replacement shipments for damaged goods and pinpoint problem areas in their supply chain for targeted improvements. In the past, companies have relied on loggers and other tools that provide condition data after the fact. As a result, they have often been forced to throw out damaged goods or prepare extra shipments. An IoT solution offers real-time data straight from the cloud, enabling companies to prevent problems before they occur and avoid unnecessary waste. With access to the right information at the right time, companies can limit waste, limit overhead and run their supply chain leaner and more efficiently.
Improving Customer Satisfaction
As companies like Amazon and Uber set new standards for fast, on-demand services, customer expectations in every industry are rising. Consumers demand a new level of precision and quality when they order products and the IoT-powered supply chain is making that possible. When shipments are connected to the cloud with an IoT solution, managers can get to-the-minute updates regarding the location and condition of their goods. Companies can warn their customers ahead of time if a product will arrive late or damaged in any way and they may even be able to use the advance warning to fix the problem before the shipment arrives. IoT is giving companies the tools they need to deliver a superior experience to their customers, enabling greater levels of customer satisfaction with less hassle.
With more visibility and less waste, companies have begun to eliminate the unpleasant surprises that were once the bane of supply chain management. In the past, companies might not discover bad news such as a late or damaged shipment until an angry customer called or invoices were left unpaid – too late to do anything about it and a recipe for a day of headaches and phone calls. IoT is changing all that. Managers are gaining awareness of their in-transit goods and learning about problems as soon as – or even before – they occur. The IoT supply chain allows managers to focus on preventative action and improving inefficiencies, not putting out fires.
Enabling Data-Driven Decision Making
As more supply chain managers adopt IoT tools into their management processes, companies are gaining access to huge, previously invisible data sets. Access to that data is useful not only because it helps managers solve problems in real time, but also because it creates the foundation for eliminating future problems. With insight into where problems occur on a macro scale, companies can make informed decisions that have an impact across the entire supply chain. IoT is providing data that enables companies to optimize their supply chain from end to end, making decisions that are driven by data, not guesses.
And this is only the beginning. Companies are just starting to realize the potential of leveraging the huge amounts of location and condition data that the IoT supply chain can generate. As IoT tools grow more widespread and those data sets grow more complete, companies will begin to apply advanced analytical tools, turning that data into useful, actionable insights. It’s an exciting time to be in Supply Chain.
Rob Stevens is co-founder and chief revenue officer at Tive, a provider of sensor-driven tracking solutions to deliver full visibility into products as they move through the supply chain.