Internet of Things, or IoT is a powerful technology behind the curtains in revolutionized activities taking place in various industries including finance, health, education, Logistics, Supply Chain, and transportation. Market analysts predict the number of IOT connections to be growth up to 6.2 billion by 2030 which was 1.8 billion in 2020.
So, What is IoT? How does it help Logistics and Supply Chain? Let’s look into the concept prior dig into the depth.
IoT is a thing which has the capacity to convert anything physical into internet-based data. Don’t forget, we are in the digital era…
Physical things associated with the internet are the surface meaning. These “things” have been connected to a network using sensors, software, and other advanced technical devices through an internet system or through a Bluetooth system. Smartwatches, medical sensors, and security systems are examples of embedded Internet of Things. Your buddy “Siri”, the digital assistant of Apple devices and “Alexa”, the home assistant of Amazon line, are famous examples of IoT usage.
The Internet of Things is revolutionising the Logistics and Supply Chain industry. And it promotes innovations and creative solutions to the bottlenecks of Logistics and Supply Chain. Connecting raw material suppliers, manufacturers, vendors, distributors, wholesalers, and retailers are generic in a supply chain. And the need for process transparency is essential more than ever as customers are focused on green and healthy practices throughout the Logistics and Supply Chain activities. There are various functions from upstream to downstream including sourcing, procuring, production, product development, distribution, warehousing, and reverse logistics.
The complexity of the supply chain could lead to frictions like poor visibility in inventory, lack of transport coordination and fraudulent activities. IoT helps to improve the supply chain process by mitigating the impact of frictional points. Further, the IoT practices during the last couple of years are proven evidence of improved efficiency in Logistics and Supply chain activities.
Why Internet of Things is Important?
Real-time tracking, monitoring and coordination are significant mysteries of IoT, which were introduced to the supply chain industry to make the process productive and reliable. Tracking, monitoring, and coordination are underlined reasons for many discrepancies in the Logistics and supply chain industry.
For example, consider the shelf life of dairy products which is generally very low. Therefore, the inventory should be managed on a First In, First Out (FIFO) basis. Failing to do so could make a customer to procure an obsolete product from the market or to make you lose due to expired inventory.
A proper inventory management system/vendor management system could avoid such misfortunes in the supply chain and logistics process. RFID tags are a well popular concept in warehousing to monitor and minimize inventory expiration.
The primary purpose of using IoT in the supply chain is to formalize and effective the decision-making procedure. The use of AI (Artificial Intelligence) and ML (machine learning) further support advanced and more accurate decision making.
How IoT shape the Logistics & Supply Chain
As we are well aware by now, Logistics and Supply Chain combine complex processes from the point of raw material procurement to making available goods in market shells. And we spoke on reverse Logistics too in a previous article on return goods.
Here are some IoT implementations which ease the work of logisticians.
Tracking- Tracking is an essential part of the supply chain as it associates with transportation abundantly. IoT devices embedded with GPS (Global Positioning System) technology helps in providing real-time locational information of the products. If the product is deviating from the pre-defined route, the relevant party will be notified through IoT. This real-time tracking is useful in raw material transportation and finished good transportation. This will further ensure the reliability of the transportation process.
Storing- Different goods have different sorting requirements. Some require storing in dry places while some should be stored in cool places. The monitoring process of temperature, humidity and vapour of the store location can be continuously monitored with the help of IoT. If the set storing conditions are deviated system alert are issued. This is quite useful when transporting medical products, refer items like fruits and vegetables.
Backups- Route planning is another critical process in the Logistics and supply chain as this directly affects the delivery time. Internet of Things can help route planning considering data such as usual traffic congestion, road conditions and weather conditions. Further, IoT enables changing the route in real-time to avoid disturbances. Unavoidable delays also can be calculated under this feature.
Forecasting- Forecasts are made considering the historical demand & supply data seasonal impacts. IoT helps in this step with real-time information. You need real time numbers or the data in hand to deliver excellent customer services and IoT becomes your savior. You can connect the real time data into a well established demand planning solution.
Manage Fleet– DHL is a leading company when it comes to adopting innovative measure for efficient Logistics management. DHL has utilized Internet of Thing in managing their truck fleet. They have used smart technologies like next- generation wireless, radio-frequency identification (RFID), near-field communication (NFC) and Bluetooth Low Energy.
Maersk Line is a famous Danish shipping company which operates nearly 20% of the containers in the world. They have developed an IoT embedded Remote Container Management (RCM) system. Monitoring the storage conditions such as humidity and temperature of the refrigerated containers. This system leads to reducing the probability of spoiling foods, especially fruits and vegetables.
Amazon, the largest online retailer in the world, has been using robots in their warehouses since 2012. These robots’ essential functions are moving products to relevant workers, scanning barcodes, and tracking package movement. Currently, over 200,000 robots are working in Amazon warehouses, saving a considerable amount of time and cost for the company.
Reducing costs and improving efficiency can be introduced as the significant benefits of the Internet of Things or IoT. When it comes to the supply chain, there are some other benefits such as flexibility, accuracy, efficiency, and transparency. Many friction points have been sorted out with the invasion of IoT into the supply chain.
Here we have discussed how IOT shapes up the supply chain more productively. These impacts will increase over time with technological advancement. Concepts like big data and blockchain are evolving. And the Logistics and Supply chain industry will become more efficient with the developing concept. It is the responsibility of the company to determine what is best for their company and make the maximum use of the innovations for the betterment of the Logistics and Supply Chain industry.