IoT Technology in the Supply Chain and Logistics

Posted by Land Link on Aug 8, 2018 12:53:59 PM

iotIn keeping with our Supply Chain Technology series, we want to discuss in this article the applications and benefits of IoT technology in the supply chain and logistics functions. So, let's begin with a firm understanding of what the "Internet of Things" is. 

Let's start with understanding a few things:

High speed, broadband internet has become the standard, the cost of connecting is decreasing, more devices are being created with Wi-Fi capabilities and sensors built into them, technology costs are going down, and smartphone penetration is sky-rocketing. All these things are creating a "perfect storm" for the IoT. Simply put, IoT is the concept of basically connecting any device to the Internet. Devices can also be interconnected to communicate with each other via the internet. This includes everything from cell phones, coffee makers, washing machines, headphones, lamps, wearable devices and almost anything else you can think of. This also applies to components of machines, for example, a jet engine of an airplane or the drill of an oil rig. If it has an on and off switch, then chances are it can be a part of the IoT. The analyst firm Gartner says that by 2020 there will be over 26 billion connected devices, some even estimate this number to be much higher, over 100 billion. The IoT is a giant network of connected "things," things in this explanation include people. The relationship will be between people-people, people-things, and things-things. In the very near future, you will have to think of little more than setting your alarm clock. After that, all your devices will know to start the coffee, preheat the oven, turn on CNN for the morning financial news...whatever we used to do manually will all be done for us through IoT. The reality is that the IoT allows for virtually endless opportunities and connections to take place, many of which we can't even think of or fully understand the impact of today.

So Let's Take A Look at Some Supply Chain Applications

Much like Blockchain technology, IoT will provide enhanced visibility and control in the supply chain and logistics operations. The supply chain is a complicated system with many literal and figurative moving parts and adding IoT technology in a useful way won't be simple.
So let's examine some of the first steps toward successful implementation of IoT in your organization.

Like Most Projects Check for A Sturdy Foundation

There are two fundamental technologies which must be in place before a successful IoT implementation strategy can begin. The first is ERP, (Enterprise resource planning is an industry term for the broad set of activities that help an organization manage its business. An essential goal of ERP software is to integrate back-office business processes and facilitate the flow of information within an organization so business decisions can be data-driven.) The second technology is MDM, master data management. MDM is a comprehensive method of enabling an enterprise to link all its critical data to one file, called a master file, that provides a common point of reference. When properly done, master data management streamlines data sharing among personnel and departments. In addition, master data management can facilitate computing in multiple system architectures, platforms, and applications. At its core, MDM can be viewed as a "discipline for specialized quality improvement" defined by the policies and procedures put in place by a data governance organization. The goal is to provide the end user community with a "trusted single version of the truth" from which to base decisions.
To be successful, IoT in supply chain management requires both technologies to be in place before IoT implementation. ERP supplies a data library, MDM organizes critical company data and together with IoT your company has strong, transparent relationships with its manufacturers, suppliers and delivery teams with reliable data-driven intelligence. 

A Comprehensive Supply Chain Assessment

To get where you want you must have a strong understanding of where you're starting from. Evaluate IoT among other technologies to see if it is, indeed, the smartest way to solve any issues that come to light in your assessment. Because the use of IoT in supply chain management is still new for many companies, it may be useful to study how companies that are successfully using it are doing so. The Spanish clothing retailer integrated IoT sensors into its distribution center allowing for the sorting of as many as 60,000 articles of clothing per hour. That information is sent to the company's MDM technology, which shapes sales decisions in stores and online channels based on this data-driven analysis. Ultimately, what matters most is how your company can use IoT in your supply chain management. What issues can IoT best solve? For example, aside from tracking merchandise, companies should determine if IoT sensors are needed to control the integrity of perishable products, such as food or medicines, or if they will help monitor the wear and tear of manufacturing equipment. It's basic ROI research that shouldn't be avoided. IoT will not be needed everywhere, but where it is implemented, it is demonstrating some solid ROI percentages, improving product quality and enhancing consumer safety. 

Look to An Expert When You’re Ready for Implementation

IoT, as a technology, is not a complicated vision but implantation can be challenging, and improper implementation can be costly in both dollars and time. This is not a plug and play technology. It has a complicated back-end, from your supply chain assessment we know that we are only integrating specific components of our supply chain and everything needs to communicate with each other the accurate data needed for optimal operation. Since IoT is a new technology, there are limited qualified personnel to help you with successful integration. Look to the experts at Land Link for a referral to a qualified integration specialist.

Collaborate with Your Suppliers

Under ideal circumstances, suppliers and purchasers both having IoT implementation will dramatically affect the ease, accuracy, and transportation of goods between parties. So, take some time to query suppliers as to their implementation plans. There may be some synergies that could make things run more efficiently. It's simply a matter of time before every significant commercial enterprise has adopted Blockchain, IoT, and the Digital Supply Chain protocols. 

Devise an IoT Strategy to Manage Terabytes Data This Technology Is Going to Generate

Most business decisions moving forward are going to be data-driven. Within your Enterprise Resource Planning objective should be protocols for managing specific data from various collection sources. Whether it be production, inventory or shipping, this data all has value and needs to be effectively managed to maximize its potential on the system functionality. For help on devising a data strategy or on any topics in this article, please don't hesitate to contact one of our industry experts at Land Link Traffic Systems. To keep up to date on the technology that is driving our industry subscribe to our blog or simply visit us

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Topics: Supply Chain Management, Industry Trends, Technology