Supply chains are in the midst of a digital revolution, led in large part by the Internet of Things. But to level set, IoT at its core is about a new stream of data. A different type and pace of data. Data that has the potential to be digested at an unprecedented pace and data that will have different characteristics. But it remains at its core zeros and ones. Data is only as useful as what you do with it. So where could supply chains find benefits with IoT?

Greater insights into processes allow for incremental improvements. With greater visibility and capabilities to measure and improve existing processes, supply chains will immediately reap benefits from IoT. Think asset management, predictive maintenance and granular inventory tracking. For example, heavy machinery manufacturers can provide enhanced connectivity to their machines. They will be capable of monitoring the usage patterns on a whole host of aspects, from anywhere on the globe. Maintenance and up-time for these assets will be greatly enhanced. Or companies adding more IoT to their transportation nodes, such as Dylan’s Candies, can use IoT to not only track shipments of their chocolate products, but also constantly pull data such as temperature and vibrations. This allows the brand to ensure proper handling and delivery of the product.

Opportunities for transformative changes at hand. The excitement of IoT is in the potential for transformative changes. Once IoT becomes more ubiquitous, the opportunity for transformative changes will become unleashed. Think of what businesses and new opportunities opened up once the railroads were fully developed. Likewise, for the internet. IoT will illuminate what was once dark within our supply chains. What business opportunities does that create? Supply chains will have the potential to get closer to the edges of the network. Consumer product brands such as Tide and Clorox are already looking to leverage greater connectivity via IoT to gain insights into consumer usage and replenishment cycles. We are witnessing this in the effort by Amazon, aligned with these brands, to get order pods into consumers’ hands. Other brands such as Nike, Adidas or Under Armour are increasing their connected clothing lines. Imagine their supply chain when they are not simply providing workout gear but can integrate the data they are pulling from the connected clothing into a remote training service.

IoT holds the promise of adding levels of measurement and insights into many processes within the supply chain. Supply chains need to look at leveraging IoT to improve existing processes while keeping an eye towards more transformative opportunities.

The Outlook

2017 promises to be a year for IoT to take the next step with regard to supply chains. Companies and their supply chains need to prepare for this digital revolution. Focus on the incremental improvements that can be made for your supply chain while keeping an eye on possible transformative changes in the future.