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IoT and the Supply Chain

The challenges and opportunities for digital supply chains are vast and that is why the IoT (Internet of Things) and AI (artificial intelligence) is stepping up to play an even greater role than ever before. It wasn’t that long ago when the supply chain wasn’t a priority when it came to capital investments. And, supply-chain executives themselves were considered as nothing more as a support function.

How quickly things are changing. Today more and more manufacturers, retailers, and logistics companies are realizing they need to harness the IoT if they are going to meet the needs of today’s “on-demand economy.”

In fact, thanks in part to companies like Amazon, the supply chain is really becoming a vehicle for growth. What’s more, if real investments are made in digitizing the supply chain, it can provide a huge competitive advantage.

Just consider for a moment some of the research-backed realities. About 89% of respondents in a Zebra Technologies-commissioned study, agree that e-commerce is driving the need for faster delivery, and this reality is encouraging investment. What are the other 11% thinking?

But here’s something interesting: Respondents estimate their current inventories are 66% accurate, which is telling us there’s definitely room for improvement. And, what’s more, 55% of organizations still use paper-based processes to manage omnichannel logistics.

Any time there’s a paper-based process, there’s another opportunity to make workflow more efficient with the help of technology.

Some of the key challenges in meeting shoppers’ omnichannel product delivery and fulfillment expectations include inventory allocation, reducing backorders, and replenishment efficiency.

To meet these challenges, there is a need for new business models—especially as the lines between retailers, manufacturers, and logistics blur and these operations begin to overlap.

In other words, companies need to pursue a digital transformation of the supply chain. Intelligent fulfillment is one area that’s really important, and we’re seeing a lot of automated picking and sorting solutions. We’re also seeing a lot of data analytics. There is also one hurdle to supply chain decisionmakers and that’s the tremendous volume of data that’s suddenly available to them.

As diverse data sources, processes, and systems start feeding business leaders all this information, it’s not second nature to most folks how to turn this information into actionable data.

EY (a tax, transaction, and advisory services firm) produced a good report about the digital supply chain that points out the risks involved when diving headfirst into a digital transformation.

The fact is a lot of valuable business insight can remain hidden in a “lake” of complex data, and, worse-case scenario, without a data strategy, companies can even end up following false insights.

For instance, if you’re making decisions based on correlations and not causations, you could be led down the wrong path for your business.

But, when done right, data can give businesses critical insights that drive growth and profitability.

Product demand forecasting, for example, is the type of insight that can really give businesses an edge.

Some of the other opportunities businesses can reap from tech investments in the supply chain include lower supply-chain management risks, improved transport routing, reduced labor costs thanks to automation, and shorter delivery times.

Some of the other barriers to adoption are never as simple as they sound. The 2018 MHI Annual Industry Report “Overcoming Barriers to NextGen Supply-Chain Innovation” takes a look at 11 key innovations on supply-chain operations and strategies, including robotics and automation, predictive analytics, IoT, AI, drones, wearable technology, 3D printing, blockchain, and more.

This year’s survey unveils three main barriers to the adoption of next-gen supply chain innovations: business case and ROI (return on investment), skills and workforce, and trust and cybersecurity.

When we talk about building a business case for the IoT, it’s not always easy, in part because determining ROI is not necessarily straightforward.

Depending on the situation, there may not be much objective data available on new and disruptive technologies, and the case studies that are available are probably from a company that’s different from yours, so we’re not comparing apples to apples.

Another hurdle is not having the right people on board. In order to drive and execute next-gen supply chains, your organization needs to have leaders and employees who have certain technical skills and who are willing to get onboard with a vision that may seem a bit nebulous at first.

We need to be looking for ways to attract young people to supply-chain operations, and one way to do that is to leverage technology.

And then when the new generation of workers starts to take the helm, they’ll be more likely to invest in and demand the use of technology. It will become a self-reinforcing cycle leading to greater tech innovation and adoption in supply chain.

The third barrier as noted earlier, trust and cybersecurity, I have discussed several times in this column. No need to focus too much on cybersecurity this time around, but blockchain technology will start to play an increasingly important role in enabling safe and secure transactions among supply-chain partners. Supply chains are changing, and digital transformation is making is happen.

Want to tweet about this article? Use hashtags #M2M #IoT #retail #supplychain #security #data #cybersecurity #cyberattack #AI #blockchain #analytics #machinelearning #artificialintelligence #bigdata #IIoT

By |2018-11-13T16:58:40+00:0011/14/2018|

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