Sep 08, 2021

IoT: The Eyes and Ears of the Supply Chain

Supplychain
DigitalSupplyChain
Logistics
IoT
5 min
Widespread IoT technology would revolutionise SCM, but as pioneers have discover, you have to run before you can walk

Every emerging technology follows a familiar trajectory, an inverted bell curve of sorts. The breakthrough draws an initial wave of excitement and hype, followed by a period of heightened anticipation, before quickly dropping off when experimental pilot schemes struggle, and the reality falls short of the promise. Once use cases have been proven and the technology matures, the hype rapidly picks up once more, but it is here, at the nadir of the technology lifecycle, where the story of Internet of Things (IoT) technology and its application in supply chain currently sits. 

IoT refers to a rapidly growing network of connected devices and objects which capture and relay data such as temperature or location in real time. Smart speakers and wifi-connected home appliances are common examples in the consumer market, and the technology is on the precipice of widespread adoption throughout the world’s interlinked supply chains, as RFID chips. mobile sensors, and more.

According to Gartner, IoT is at the bottom of the Trough of Disillusionment, the low point preceding broad application as an industry-standard technology. Mike Burkett, analyst and Research VP at the Gartner Supply Chain Practice, says that although companies are increasingly investing in the technology, and implementing it, “they struggle to define the best opportunities for using its measurement and tracking capabilities”.

Source: Gartner


Supply Chains Need IoT

But the truth is that supply chains need IoT. Gartner’s report forecasts near ubiquity before the end of the decade. Five-fold growth in IoT application is expected between 2018 and 2028, with 1.9bn IoT endpoints in use across manufacturing and natural resources industries by the end of the 10-year period. 

These connected devices are becoming the eyes and ears through which professionals visualise and monitor their supply chain. As supply chains become ever more complex and global than ever before, supply chain leaders need greater visibility to surmount supply shocks, such as port closures, material shortages, and demand spikes. 

Here, the data collection capability of IoT technology comes into its own. Routinely used to monitor inventory, track the movement of mass shipments, and provide geolocation on individual pallets, parcels and containers, supply chain leaders have never had access to such accurate information. It has also been the key technology in Industry 4.0, allowing for more accurate maintenance, repair and operations (MRO) in manufacturing and production, as well as providing real-time data for digital twins in industrial settings. 

Top 3 Benefits of IoT Supply Chain Solutions


Internet of Things (IoT) won’t solve every problem or enhance every process, but it can remove human error and collect data from environments that are too hazardous or complex via manual methods.

Automation 

Everything from shipment verification efficiency to order accuracy can be increased through automation. IoT automatically scans shipments, relays accurate information on what, where, and when, and lowers the need for manual labour - a significant time and cost-sink for complex and time-sensitive logistics operations. 

Documentation 

How often do supply chains falter due to missing paperwork or errors? More often than you’d think. Using data collected by IoT devices, smart logistics platforms automatically fill in documentation and verify paperwork, removing human error and bringing inaccuracy close to zero. Professionals are freed to handle paperwork that requires human oversight. 

Real-time visibility

Knowing where a shipment is at any given moment is the most important data point for logistics professionals. IoT devices provide real-time data on location, speed, and other factors such as temperature for cold chain operations. Much of this data would be impossible or infeasible to collect manually. Professionals are better informed to mitigate disruption, can forecast more accurate estimated time of arrival, and maintain transparent communication with customers and other stakeholders. 

IoT and Post-Pandemic Problems  

 

The pandemic placed greater pressure on supply chains to be more resilient and elastic, prompting a wave in investment in digital platforms, powered by data captured through IoT. 

“As we prepare for a post-pandemic era, companies’ increased know-how and awareness of solutions like RAIN RFID, IoT and AI will play a key role in evolving the industry’s approach to solving supply chain issues from reactive to proactive, setting them up for future success,” says Jill West, Vice President of Strategic Communications at Impinj.

But more data alone, does not solve the manifold issues that supply chains face. People are now free to problem solve and dedicate their time and expertise to exception management. “But as the volume of real-time and accurate data about the movement of goods rises, so too do the demands on operations teams to make sound business decisions quickly and with confidence, often using AI-powered systems that thrive on improved data to make better decisions,” West adds.

Though IoT devices are revolutionising the fundamentals of supply chain management (SCM), it is the edge cases where the technology will have the largest impact. Gartner analyst Burkett says: “We have categorised IoT as a transformational technology because it has the potential to impact many areas of the supply chain in a broad and profound way.”

Janssen Pharmaceutical is trialling an IoT monitoring strategy to strengthen the security of sensitive shipments, including medicines (considered a controlled product), in Australia. The pilot is part of a wider initiative to bolster local capabilities in the complex APAC region, and forms a 

“Our team is building a sustainable supply chain by growing capabilities that will improve responsiveness and the security of shipments,” explains Chris Ewer, Vice President, Janssen Supply Chain Asia Pacific. 

“The team in Australia is initiating a trial in the second half of 2021 to monitor every pallet of controlled product with an Internet of Things (IoT) enabled device that provides real-time updates about the shipment location,” he adds. "Building these capabilities in Australia gets us closer to our local patients and customers, giving us greater insights into their needs. This also helps us provide value, reduce our costs, and maintain reasonable prices to enable sustainable growth." 

Though the whiplash of last year’s COVID-19 breakout has subsided, the impact of the virus has forever changed the way supply chains operate. The efficiencies of the Just in Time supply chain have been supplanted by resiliency and agility, where data is key and transparency is everything. IoT will form the backbone of the data-led supply chains of the near future, and organisations that fail to invest and react risk falling behind the new global standard. 


 

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