Visibility through data: a modern solution for supply chain
There’s no question that data is critical for organizations that want to better understand their business challenges and opportunities.
With data-backed insights, organizations can make more informed decisions that drive business performance. In fact, a study by Microsoft found that 51% of business leaders have a data strategy in place to drive revenue streams and productivity.
Data-backed insights are proving to be particularly important in the supply chain industry. As supply chains become increasingly complex—sometimes involving as many as 100,000 suppliers for multinational organizations—business leaders struggle to maintain visibility into what transpires from shipment source to destination. Below, we examine the impact of low visibility, and how that impact can be blunted with modern applications of IoT solutions that transmit data.
The need for visibility
Visibility is the operative word for supply chain stakeholders, informing logistics decisions that enable businesses to operate more efficiently, prevent product loss and increase profits. Unfortunately, visibility is a central challenge for supply chain managers today, with 94% of companies admitting that they don’t have full visibility into their supply chains.
Low supply chain visibility can be detrimental because it can prevent organizations from efficiently identifying occurrences of:
Disintermediation and data ownership: Supply chain managers must have complete visibility into the entire supply chain, no matter how complex, to ensure accurate shipment locations and time estimates for buyers. This information must be direct from the source, accurate and trustworthy. Otherwise, supply chain managers risk trusting a third-party source to handle this critical information.
Unfavorable container conditions: Without visibility, supply chain executives cannot monitor critical container conditions, such as temperature. This lack of visibility can cause the integrity of goods to be compromised—resulting in a slew of problems for a brand, ranging from compliance issues to customer mistrust.
Theft and other security issues: Not only can products simply be misplaced, but theft is a huge problem in the supply chain—representing $30bn in lost revenue for American companies each year. Without visibility into the shipment’s location, supply chain executives are left without a way to identify and prevent theft or other security issues.
Visibility through data
The good news is that visibility can be enhanced with IoT solutions that track shipments’ whereabouts and conditions up and down the supply chain. A Forrester report found that in 2019, 85% of firms will use data collected by IoT solutions to gain visibility into their business processes. This data can give supply chain stakeholders the insights needed to track assets, monitor container conditions and enhance security.
To ensure assets are tracked throughout their entire supply chain journeys, supply chain managers can have IoT-enabled sensors placed inside the container during the loading process to allow real-time geo-localization from the initial departure warehouse to its final destination. When connected to a global 0G network, these sensors can deliver information about container whereabouts across far-reaching distances. As shipments pass through checkpoints—whether that be the distribution plant four states away or across an ocean—the supply chain manager can watch the shipment progress and communicate accurate delivery estimates.
Communicating accurate delivery estimates is extremely important in providing optimal customer experiences and establishing customer trust. Today’s consumer not only expects fast delivery, but also accurate delivery estimates, according to Temando’s State of Shipping in Commerce report. These expectations can be challenging for businesses to set without visibility into the supply chain—which is why more than half of retailers don’t offer delivery date estimates.
With better tracking, businesses can not only better set delivery expectations with customers but can also get ahead of glitches in fulfillment processes. Data collected by IoT-enabled sensors can help businesses identify abnormal shipping behavior or weak links in their supply chain. Armed with this data, businesses could identity patterns of mistakes or mishandling that could lead to a change in their chosen supply chain partner or warehouse.
If, for example, a sensor reveals that a shipment is stuck in a warehouse for weeks at a time, supply chain managers can proactively reach out to the correct logistics provider to push them to move the product. This data can also be used to test different shipment routes to determine which are most efficient.
Monitor container conditions
IoT-enabled sensors can not only communicate the location of shipments but can also deliver updates on container conditions. For supply chain managers tracking perishable or fragile items, this is especially important. Imagine, for instance, a shipment of popsicles. If the temperature of that container is not properly maintained, the popsicles could melt and become a sticky, misshapen mess upon arrival. Outcomes could be more dire if containers of things like pharmaceutical products are not properly maintained, leading to a serious public health crisis that could devastate a brand’s reputation and drive costly legal fees.
Through IoT-enabled sensors monitoring container conditions, supply chain managers can be alerted to issues—and reconcile them—before they become catastrophic. Additionally, supply chain managers can track this data over time to identify where issues tend to arise, so they can remedy where there are likely to be more broken processes.
Detect security issues
In addition to using IoT-enabled devices to help mitigate the risk of mismanaging or misplacing goods, companies can also use the IoT to protect against theft, as certain cargo assets, like trucks or ships with valuable goods, have an increased risk of being stolen.
IoT-enabled sensors can help protect products on the road and in warehouses. Companies can set specific geographic parameters on the IoT sensors they attach to their products. This makes it so the sensor will immediately send an alert if a thief were to move the goods outside the geographic area that was previously set. The devices continue to transmit this critical location information seamlessly to enable quicker and easier recovery for the authorities and insurers.
Additionally, when companies track their shipments, they can determine if they are being transported safely. IoT-enabled sensors can monitor for dangerous driving conditions to ensure both their security of their drivers and products.
Even when products aren’t on the move, they are still at risk for theft. Warehouses have reported thieves that overwhelm alarm systems using mobile phone jammers, making it easy to enter and steal substantial amounts of goods. However, if that security system were connected to the same network that the IoT-sensors are connected to, buildings wouldn’t encounter this problem. A 0G network operates on radio signals that cannot be jammed, therefore reducing the risk of further monetary loss.
With the potential to revolutionize industry leaders’ understanding of their complex supply chains, data-backed insights provided by the IoT delivers crucial visibility into once obscured segments of a shipment’s journey. With greater visibility up and down the supply chain, organizations can set themselves on the path to operational efficiencies, superior customer experiences and a stronger bottom line.
For more information on procurement, supply chain and logistics topics - please take a look at the latest edition of Supply Chain Digital magazine.