Executive Briefings

Opinion: How IoT Will Impact the Supply Chain This Year

There has been a lot written about the internet of things (IoT) and how it will affect nearly every global industry — from retail to connected vehicles.

In my opinion, one of the most exciting areas of impact — albeit far less sexy than drones and self-driving cars — is the global supply chain.

When I think of supply chains, I think of the quirky TV show Portlandia. There’s an episode where two friends are dining out and, before ordering, they insist on knowing as much as they can about the very chicken they’ll be eating for dinner. They find out his name, appetite, and social habits. They even travel to the farm where he was raised to make sure it seems like a happy environment. It’s an option made possible due to the restaurant’s firm commitment to farm-to-table transparency. The process of assessing a chicken in real-time before agreeing to eat it may seem a bit outlandish (errr, Portlandish.) But with the IoT, we’ll be able to experience that type of transparency, and so much more.

Indeed, the IoT is set to revolutionize the supply chain with both operational efficiencies and revenue opportunities made possible with just this type of transparency. In today’s market, supply chain isn’t just a way to keep track of your product. It’s a way to gain an edge on your competitors and even build your own brand. The following are a few areas where we’ll be seeing the most advancement and change with the ever-advancing Industrial IoT.

Operational Efficiencies

When it comes to operational efficiencies, the IoT offers many.

Asset tracking: Tracking numbers and barcodes used to be the standard method for managing goods throughout the supply chain. But with the IoT, those methods are no longer the most expedient. New RFID and GPS sensors can track products “from floor to store” — and I’d venture, even beyond. At any point in time, manufacturers can use these sensors to gain granular data like the temperature at which an item was stored, how long it spent in cargo, and even how long it took to fly off the shelf. The type of data gained from the IoT can help companies get a tighter grip on quality control, on-time deliveries, and product forecasting. Not too shabby.

Vendor relations: The data obtained through asset tracking is also important because it allows companies to tweak their own production schedules, as well as recognize sub-par vendor relationships that may be costing them money. According to IBM — whose Watson AI technology has become a major resource on the supply chain scene — up to 65 percent of the value of a company’s products or services is derived from its suppliers. That’s a huge incentive to pay closer attention to how your vendors are handling the supplies they’re sending you, and how they’re handling your product once it’s made. Higher quality goods mean better relationships with customers — and better customer retention overall.

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In my opinion, one of the most exciting areas of impact — albeit far less sexy than drones and self-driving cars — is the global supply chain.

When I think of supply chains, I think of the quirky TV show Portlandia. There’s an episode where two friends are dining out and, before ordering, they insist on knowing as much as they can about the very chicken they’ll be eating for dinner. They find out his name, appetite, and social habits. They even travel to the farm where he was raised to make sure it seems like a happy environment. It’s an option made possible due to the restaurant’s firm commitment to farm-to-table transparency. The process of assessing a chicken in real-time before agreeing to eat it may seem a bit outlandish (errr, Portlandish.) But with the IoT, we’ll be able to experience that type of transparency, and so much more.

Indeed, the IoT is set to revolutionize the supply chain with both operational efficiencies and revenue opportunities made possible with just this type of transparency. In today’s market, supply chain isn’t just a way to keep track of your product. It’s a way to gain an edge on your competitors and even build your own brand. The following are a few areas where we’ll be seeing the most advancement and change with the ever-advancing Industrial IoT.

Operational Efficiencies

When it comes to operational efficiencies, the IoT offers many.

Asset tracking: Tracking numbers and barcodes used to be the standard method for managing goods throughout the supply chain. But with the IoT, those methods are no longer the most expedient. New RFID and GPS sensors can track products “from floor to store” — and I’d venture, even beyond. At any point in time, manufacturers can use these sensors to gain granular data like the temperature at which an item was stored, how long it spent in cargo, and even how long it took to fly off the shelf. The type of data gained from the IoT can help companies get a tighter grip on quality control, on-time deliveries, and product forecasting. Not too shabby.

Vendor relations: The data obtained through asset tracking is also important because it allows companies to tweak their own production schedules, as well as recognize sub-par vendor relationships that may be costing them money. According to IBM — whose Watson AI technology has become a major resource on the supply chain scene — up to 65 percent of the value of a company’s products or services is derived from its suppliers. That’s a huge incentive to pay closer attention to how your vendors are handling the supplies they’re sending you, and how they’re handling your product once it’s made. Higher quality goods mean better relationships with customers — and better customer retention overall.

Read Full Article