Executive Briefings

How the Internet of Things Can Transform Your Mid-market Supply Chain

While the concept behind the "Internet of Things" has been around for about two decades, NEST, the web-enabled thermostat company recently purchased by Google, has popularized the concept. Today, a data-driven infrastructure of internet-connected devices that control utilities, guide our retail shopping experiences, and monitor our health is far from science fiction.

How the Internet of Things Can Transform Your Mid-market Supply Chain

For mid-market businesses focused on manufacturing, distribution or logistics, a network of low-cost sensors, two-way controllers, and machine-to-machine networks (M2M) can add new competitive advantages across the supply chain. There are four ways Internet of Things(IoT) solutions can be implemented across the manufacturing and supply network to improve visibility, efficiency, quality and safety.

How Does IoT Work?

The IoT and Cloud of Things (CoT) are very broad terms encompassing the web of embedded devices that communicate within a network or across the internet. These devices, or smart objects, include a variety of sensory devices (GPS trackers, switches, temperature probes, cameras, etc.) and actuating devices (valves, bulbs, locks, etc.) that communicate via low power radios, Wi-Fi and cellular. Interconnected devices can share the gathered sensory data, and then trigger a variety of responses ranging from something as simple as an email alert to real-world actions such as automatically closing safety valves.

Low Power, Low Barrier to Entry

Smart devices do not necessarily need a direct internet connection to function. Low power radio devices, such as those using ZigBee or 6LoWPAN protocols, can transmit data through a mesh network of intermediate devices, where data makes short jumps through the hive instead of relying on big antennas and centralized router. These mesh networks allow for smaller transmitters that draw less power, increasing the potential for integration into packaging, pallets and machines. In fact, some devices are so efficient that they run on ambient energy and do not require any other power source.

The lack of big antennas or a centralized router, and the low-to-no power requirements, reduces the need for costly infrastructure renovations. Unlike expensive environmental monitoring and automation systems of the past that required enterprise-level investment, the decreasing cost of network-connected devices offers new opportunity for mid-market companies to reduce the risk of worksite accidents or spills, spend on equipment maintenance, repair and overhaul (MRO), and time manually collecting and analyzing operational data.

Improvements Across the Supply Chain

Here are a few ways IoT and CoT solutions can be implemented across the manufacturing and supply network to improve visibility, efficiency, quality and safety.

Manufacturing Maintenance and Product Quality

Production facilities can integrate a network of sensors into machinery to improve quality of service, increase up-times, and reduce the costs of operation. Photographic instruments can scan disposable machine components, such as blades, and provide alerts for predictive maintenance. Similar scanners can also check raw materials for traits such as paint color, alloy strength, or fabric composition to confirm accuracy before they are used for a finished product. This data can be automatically uploaded to ERPs to provide an audit trail if necessary.

Monitoring the Cold Chain

Network-enabled sensors can be used in warehouses and vehicles to monitor temperature, humidity, unusual motion, salinity and spills. In cold chain management, for example, individual sensors that monitor power, temperature or motion can provide remote alerts for basic problems such as a temperature drop or an overworked compressor.

When integrated into a network that analyzes data from multiple sensors, real-time intelligence can be crunched to identify the difference between a malfunctioning refrigeration component and a freezer door that has been left open. Real-time collaboration between devices can indicate when to call for repairs, what temperature to keep a warehouse for a lower energy bill, and when to run machines for optimal lifespan.

Asset Counting and Tracking

From supplier to customer, sensors either applied to pallets/packages/individual components, or more broadly at the warehouse or truck level, can offer deep visibility across the entire supply chain and feed real-time location and stock-level data to inventory managers, order pickers, and vendors.

At companies where inventory volumes don’t merit frequent inventory counts, or in locations where information sensitivity prohibits on-site vendor visits, vendor managed inventory may not have been an option to-date. However, with the removal of physical barriers through stock shelves that update remote systems, new replenishment models are far more realistic.

For example, American Apparel originally set out to automate their in-store manual cycle counting process, but ended up eliminating the process all together by creatively using RFID technology. With ceiling mounted RFID readers, they could track in-store merchandise without the need for staff to count individual pieces. This reduced manual input error and allowed more time for retail associates to focus on selling.

At the warehouse, scales and visual sensors can alert workers to inventory levels on shelves, fill levels inside tanks, and unused paper or metal on spools. Instead of relying on bar codes and human error at shipping and receiving, a sensor network can weigh and scan inbound and outbound packages for accuracy. Deviations in weight, size, density and a variety of other parameters can immediately notify dock workers to problems. Based on this data collection, shipping collaboration solutions can match expected vs. actual received inventory against POs, ASNs and invoices to ensure accuracy and generate GRNs.

Forecasting & Inventory

This detailed information holds the potential for manufacturing and distribution companies to rethink how procurement operates. Unlocking a real-time snapshot of stock levels in transit, on retail shelves, 3PL distribution centers, and on-hand in warehouses, allows inventory planners, production managers and procurement officers to make more informed decisions about materials to hold, build or buy. When combined with procurement automation solutions, mid-market companies can receive advanced warning to shipping errors, while reducing data-entry errors and cycle time.

A (Supply Chain) Internet of Things for Competitive Advantage

Only 10 percent of industrial operations are currently utilizing the internet-connected enterprise, according to John Nesi, vice president of market development at Rockwell Automation, in Forbes. While mid-market companies strive to cut all inefficiencies out of their operations, extend the life of assets, and maximize market insights, those that take advantage of the IoT equalizer can increase competitive advantage against competitors of all sizes.

Mid-market companies have no excuse for complacency, as full infrastructure is not necessary for pilot tests. Solutions range from do-it-yourself  kits such as the popular (and cheap!) Xbee modules, to more expensive hardened professional development kits from Texas Instruments. This not only means that companies can test fully certified solutions at minimal cost (less than $100 for many full kits), but junior tinkerers are driving down the cost of programming talent.

Greater supply chain visibility via an IoT network can help mid-market companies cut down on lost margins throughout the supply chain and prepare for expansion, which are both critical to mid-market success. Undoubtedly, the Internet of Things offers one of the most disruptive technologies of the decade that both distribution and manufacturing companies need to evaluate for competitive advantage.

Source: TAKE Supply Chain

For mid-market businesses focused on manufacturing, distribution or logistics, a network of low-cost sensors, two-way controllers, and machine-to-machine networks (M2M) can add new competitive advantages across the supply chain. There are four ways Internet of Things(IoT) solutions can be implemented across the manufacturing and supply network to improve visibility, efficiency, quality and safety.

How Does IoT Work?

The IoT and Cloud of Things (CoT) are very broad terms encompassing the web of embedded devices that communicate within a network or across the internet. These devices, or smart objects, include a variety of sensory devices (GPS trackers, switches, temperature probes, cameras, etc.) and actuating devices (valves, bulbs, locks, etc.) that communicate via low power radios, Wi-Fi and cellular. Interconnected devices can share the gathered sensory data, and then trigger a variety of responses ranging from something as simple as an email alert to real-world actions such as automatically closing safety valves.

Low Power, Low Barrier to Entry

Smart devices do not necessarily need a direct internet connection to function. Low power radio devices, such as those using ZigBee or 6LoWPAN protocols, can transmit data through a mesh network of intermediate devices, where data makes short jumps through the hive instead of relying on big antennas and centralized router. These mesh networks allow for smaller transmitters that draw less power, increasing the potential for integration into packaging, pallets and machines. In fact, some devices are so efficient that they run on ambient energy and do not require any other power source.

The lack of big antennas or a centralized router, and the low-to-no power requirements, reduces the need for costly infrastructure renovations. Unlike expensive environmental monitoring and automation systems of the past that required enterprise-level investment, the decreasing cost of network-connected devices offers new opportunity for mid-market companies to reduce the risk of worksite accidents or spills, spend on equipment maintenance, repair and overhaul (MRO), and time manually collecting and analyzing operational data.

Improvements Across the Supply Chain

Here are a few ways IoT and CoT solutions can be implemented across the manufacturing and supply network to improve visibility, efficiency, quality and safety.

Manufacturing Maintenance and Product Quality

Production facilities can integrate a network of sensors into machinery to improve quality of service, increase up-times, and reduce the costs of operation. Photographic instruments can scan disposable machine components, such as blades, and provide alerts for predictive maintenance. Similar scanners can also check raw materials for traits such as paint color, alloy strength, or fabric composition to confirm accuracy before they are used for a finished product. This data can be automatically uploaded to ERPs to provide an audit trail if necessary.

Monitoring the Cold Chain

Network-enabled sensors can be used in warehouses and vehicles to monitor temperature, humidity, unusual motion, salinity and spills. In cold chain management, for example, individual sensors that monitor power, temperature or motion can provide remote alerts for basic problems such as a temperature drop or an overworked compressor.

When integrated into a network that analyzes data from multiple sensors, real-time intelligence can be crunched to identify the difference between a malfunctioning refrigeration component and a freezer door that has been left open. Real-time collaboration between devices can indicate when to call for repairs, what temperature to keep a warehouse for a lower energy bill, and when to run machines for optimal lifespan.

Asset Counting and Tracking

From supplier to customer, sensors either applied to pallets/packages/individual components, or more broadly at the warehouse or truck level, can offer deep visibility across the entire supply chain and feed real-time location and stock-level data to inventory managers, order pickers, and vendors.

At companies where inventory volumes don’t merit frequent inventory counts, or in locations where information sensitivity prohibits on-site vendor visits, vendor managed inventory may not have been an option to-date. However, with the removal of physical barriers through stock shelves that update remote systems, new replenishment models are far more realistic.

For example, American Apparel originally set out to automate their in-store manual cycle counting process, but ended up eliminating the process all together by creatively using RFID technology. With ceiling mounted RFID readers, they could track in-store merchandise without the need for staff to count individual pieces. This reduced manual input error and allowed more time for retail associates to focus on selling.

At the warehouse, scales and visual sensors can alert workers to inventory levels on shelves, fill levels inside tanks, and unused paper or metal on spools. Instead of relying on bar codes and human error at shipping and receiving, a sensor network can weigh and scan inbound and outbound packages for accuracy. Deviations in weight, size, density and a variety of other parameters can immediately notify dock workers to problems. Based on this data collection, shipping collaboration solutions can match expected vs. actual received inventory against POs, ASNs and invoices to ensure accuracy and generate GRNs.

Forecasting & Inventory

This detailed information holds the potential for manufacturing and distribution companies to rethink how procurement operates. Unlocking a real-time snapshot of stock levels in transit, on retail shelves, 3PL distribution centers, and on-hand in warehouses, allows inventory planners, production managers and procurement officers to make more informed decisions about materials to hold, build or buy. When combined with procurement automation solutions, mid-market companies can receive advanced warning to shipping errors, while reducing data-entry errors and cycle time.

A (Supply Chain) Internet of Things for Competitive Advantage

Only 10 percent of industrial operations are currently utilizing the internet-connected enterprise, according to John Nesi, vice president of market development at Rockwell Automation, in Forbes. While mid-market companies strive to cut all inefficiencies out of their operations, extend the life of assets, and maximize market insights, those that take advantage of the IoT equalizer can increase competitive advantage against competitors of all sizes.

Mid-market companies have no excuse for complacency, as full infrastructure is not necessary for pilot tests. Solutions range from do-it-yourself  kits such as the popular (and cheap!) Xbee modules, to more expensive hardened professional development kits from Texas Instruments. This not only means that companies can test fully certified solutions at minimal cost (less than $100 for many full kits), but junior tinkerers are driving down the cost of programming talent.

Greater supply chain visibility via an IoT network can help mid-market companies cut down on lost margins throughout the supply chain and prepare for expansion, which are both critical to mid-market success. Undoubtedly, the Internet of Things offers one of the most disruptive technologies of the decade that both distribution and manufacturing companies need to evaluate for competitive advantage.

Source: TAKE Supply Chain

How the Internet of Things Can Transform Your Mid-market Supply Chain