Five Ways IoT is Improving the Modern Supply Chain

August 28, 2018

February 5, 2024


x min read

As supply chains grow more complex, many manufacturers and 3PLs are turning to the Internet of Things, or IoT, to make sure that they stay competitive in the modern, global world. But how exactly is IoT benefiting the modern supply chain? Below, we've identified five key ways in which the IoT-powered supply chain is enabling new levels of visibility and operational efficiency from end to end.

1. Environmental Monitoring

For many companies, insight into the real-time temperature and humidity of in-transit goods is vital to ensuring high quality levels and a top-notch customer experience. For example, a pharmaceutical company may have millions of dollars riding on a shipment of temperature-sensitive drugs arriving undamaged for a time-critical product launch. Or a high-value foods company may be interested in understanding variation in humidity levels while shipments are transported between facilities. Many manufacturers are concerned with environmental factors such as temperature and humidity, and so they rely on IoT solutions to monitor that data, send real-time alerts if excursions occur, and provide actionable analysis for future improvements.

2. Shock Damage Alerts

In addition to environmental condition, some manufacturers are also interested in gaining real-time visibility into in-transit damages caused by mishandling. From industrial equipment to electronics and automotive components, many goods are highly sensitive to being dropped, tilted, or otherwise handled incorrectly en route. For example, large electronics companies have begun to integrate IoT tracking and alerting systems into their supply chains to get an immediate notification if a shipment of TV screens, server racks, or other fragile products or components experience potentially damaging tilt or shock levels. Armed with this real-time knowledge, the manufacturer is able to plan ahead and mitigate fallout due to damaged product.

3. Avoid Delays with ETA Alerts

Of course, the IoT-powered supply chain isn't just about condition monitoring. IoT also enables real-time location tracking for in-transit goods, making it possible to predict and avoid shipment delays. Especially when it comes to high value shipments such as luxury goods or critical materials, insight into the precise location of goods as they travel across borders and multiple modes of transit is vital. With trackers attached to each shipment, manufacturers are able to stay up to date on exactly where their goods are, giving them the information they need to identify potential delays and plan ahead before it's too late.

4. Reduce Waste

Real-time insight into damages and delays is huge on its own. But shipment-level alerts are actually only the beginning. Built on a foundation of IoT, the modern digital supply chain makes it possible to reduce waste throughout all operations. For example, with comprehensive data regarding where shipments are and which areas tend to encounter more or less problems, managers can intelligently assign buffer stock to high risk areas, and lower safety stock levels in low-risk areas. In addition, if the manager knows that a shipment is likely to arrive late or damaged, they can shift schedules to reduce factory downtime and wasted labor hours. In this way, IoT data makes it possible to reduce waste and allocate resources more efficiently, enabling the manufacturer to cut costs and improve the bottom line.

5. Data-Driven Optimization

Ultimately, access to data means you can implement data-driven optimization strategies. Frameworks such as Lean and Six Sigma are old news in the production side of manufacturing, but when it comes to supply chain management, a lack of data has historically made it difficult for many companies to successfully incorporate these methodologies. With real-time visibility and comprehensive datasets regarding shipment duration, damage rates, and other key metrics, it becomes possible to adapt data-driven tools to the supply chain side of the business.

For example, some manufacturers have begun to use IoT data to conduct Statistical Process Control analysis, or SPC, in supply chain management. SPC is a statistical method for identifying outlier data points and immediately updating processes as soon as early signs of a problem arise -- be it high damage rates, inaccurate ETAs, or other supply chain issues.  These sorts of tools enable significant, quantitative optimization, not just of a single shipment or route, but of a company's entire supply chain operations.

The Modern Supply Chain Runs on IoT

 Today, we are just beginning to see the impact of IoT on the industrial supply chain.  From damage reduction and improved ETAs to comprehensive waste reduction and end-to-end optimization, the possibilities for the IoT-powered supply chain are limitless. If you'd like to learn more about how IoT tools can revolutionize your supply chain, request a demo with Tive today.

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