By Nishant Rathi, Founder & Director, NeoSOFT
The supply chain is a complex ecosystem of manufacturers, suppliers, distributors, retailers, vendors and various people who play a part in moving goods from their source to the intended customers who could be local or overseas. Disruptions in this interlinked ecosystem affect customer experience and revenue. End-to-end visibility of the supply chain would make it easier for stakeholders to take informed decisions and soften the effect of disruptions on their business. Digital transformation and the use of IOT (Internet of Things) devices has allowed organisations to extract data and gain visibility in near real-time, leading to cost optimisations and better response times.
IOT: Providing Real-Time Connected Intelligence
The market for IOT devices is increasing as innovators continue to design sensors that more accurate and energy efficient. The worldwide IOT supply chain industry is projected to grow from US$12.4 billion in 2023 to US$41.8 billion by 2033.
IOT sensors in the supply chain can gather data and share information in real-time throughout the ecosystem. They are vital for efficient supply chain management. These could be simple sensors or intricate systems that monitor the environment, track movement, provide visuals and more. Data analytics solutions make sense of all this data pouring in, detecting patterns, providing insights and using historical data to predict events before they occur, enabling companies to take timely action and mitigate disruptions. With data, companies in the supply chain industry will be able to operate more efficiently and take the guesswork out of business decisions.
Intangible Benefits of IOT Devices
Real-time environmental data like ambient temperature, stock levels in warehouses, location, weather, etc are some of the variables that are supplied to analysts in the supply chain. This helps managers in several ways:
Superior Inventory and Risk Management: Warehouses charge for the space they provide, so suppliers need to ensure use these areas to the fullest. Data from IOT devices helps managers ensure that goods are stored in the right conditions and that space is not being underutilised. It also helps to keep check on inventory levels at all times to prevent theft. Any discrepancy or anticipated delays will alert managers so that evasion action can be taken before they escalate into something more damaging.
Enhanced Predictive Maintenance: Unforeseen machine failures puts pressure on the production line and results in heavy capital expenditure. This can be avoided with IOT devices that relay information related to the machine’s health. Analytic solutions use historical and real-time data from these devices to flag issues before they occur, allowing managers to prevent disruptions and hold timely maintenance checks.
Automation and Resource Optimisation: IOT devices have helped organisations automate tasks and improve efficiency levels. Systems can be configured to perform a set of actions based on triggers set in place by managers in the supply chain ecosystem. This frees up manpower for more important tasks and supervision. AI/ML integrated into data analytics has further allowed systems to crunch larger volumes of data generated by these devices at a much faster rate.
Customer experience: Damaged goods and delayed deliveries make customers unhappy, making them more likely to share that negative sentiment online and offline. Advanced tracking and demand forecasting ensures that consignments are handled with care, damaged goods are weeded out and timely status updates are provided to the end-user to ensure a positive experience.
Challenges: Legacy Systems and Cyber Crime
Legacy systems, the growing sophistication of cyberattacks and costs associated with the implementation of IOT devices is slowing the adoption rate in the industry. Organisations should implement IOT solutions that provide wider support for older systems and offer more integration options. Here, middleware and a phase-wise approach can help minimise disruptions to daily operations.
Companies also need to ensure that their systems do not become a target of cybercriminals. Data, whether in transit or at rest, needs to be encrypted at all times to ensure total privacy. Regular security audits and employee training can help lower instances of cyberattacks on IOT-enabled supply chains.
IOT implementation can be complex and costly. However, its long-term benefits far outweigh the potential losses caused by disruptions. Organisations should plan a phase-wise approach, starting with pilot trials to stay within the fiscal budgets.
Integrating IOT into the supply chain will provide much-needed visibility to businesses in the ecosystem. Major tech innovations will further improve their effectiveness as well. 5G (and later 6G), for instance, will shorten response times with near real-time data capture. AR/VR will lead to a more immersive experience, lending itself especially well for training purposes. On the security front, blockchain baked into IOT platforms will help secure data more effectively, and AI/ML integration will help data custodians make smarter, more accurate decisions. Together, all these innovations will drive the adoption and improve the effectiveness of IOT devices in the supply chain industry.
