How is IoT Transforming Supply Chain Management

February 28, 2023
How is IoT Transforming Supply Chain Management

The Internet of Things (IoT) is transforming the operation of every business, including supply chain management. If you have yet to learn, IoT refers to a network of physical devices, software, sensors, etc., that can collect and share data through the internet. 

On the other hand, supply chain management deals with all the activities related to delivering a product from raw material to the consumer. So the supply chain is a complex system with many operations, such as demand management, product planning, inventory management, etc. However, implementing IoT in supply chain management can help you simplify complex processes and drive more sales. 

In this detailed guide, we will discover more about IoT technology and supply chain management. But before that, let's understand the current challenges in supply chain management.

Current Challenges in Supply Chain Management

As mentioned earlier, the supply chain is a complex system involving many processes, stakeholders, and touchpoints. So obviously, there are numerous current challenges in supply chain management. 

1. Lack of Real-time Visibility

Lack of visibility is one of the most significant supply chain challenges. To manage a supply chain successfully, the stakeholders should have clear visibility into the movement of goods and materials. Poor visibility leads to inaccurate and delayed shipments, making you lose complete control over the flow of resources. 

2. Inventory Management

Inventory management in the supply chain ensures that you have enough raw materials to deliver orders on time. So managing large volumes of materials is a challenging task for the stakeholders. Both the shortage and excess availability of resources can seriously affect the efficiency of the process. 

3. Cash Flow Management

Managing expenses is another tedious task in supply chain management! Stakeholders will always be under pressure due to the increasing costs of raw materials and shipping charges. In addition, they also have to ensure the products are delivered on time and manage the cash flow related to shipping, storage, manufacturing, packaging, distribution, and more. 

4. Demand Forecasting

Managing ever-changing customer demands is an integral and challenging part of the supply chain. Inaccurate demand forecasting leads to loss of money and resources, disrupting the entire supply chain. So stakeholders should gather relevant data from past sales and apply analytics to create an accurate demand forecast plan. 

5. Implementing the Right Technology

Implementing the right technology can solve most of the challenges mentioned above. However, the availability of numerous advanced technologies, such as the Internet of Things, Artificial Intelligence, Machine Learning, etc., has also left the stakeholders needing clarification about choosing the right one. These technologies can offer better workflow, improved efficiency, accuracy, etc. So the real challenge is choosing the best technology and implementing it effectively in your supply chain.

How is IoT Transforming Supply Chain Management?

As already said, IoT can alter and digitise many processes related to supply chain management by connecting devices and sensors and allowing them to exchange data with each other. So here are some critical IoT solutions for supply chain management.

1. Real-time Visibility

One of the best IoT benefits in supply chain management is real-time visibility. IoT sensors can offer real-time data on different properties of raw materials and goods. For example, stakeholders can see the exact location of goods and estimate the time needed to reach the destination. You can also know the temperature and humidity of goods from anywhere. As a result, you can track goods with better accuracy, reduce the wastage of resources and improve efficiency!

2. Predictive Maintenance

IoT also offers predictive maintenance in the supply chain. Supply chain managers can predict the failure of machines by analysing the data shared by IoT devices and sensors. By doing this, you can prevent the loss of machines by performing maintenance on time, thus reducing machine downtime. Predictive maintenance also improves the machine's performance and life.

3. Customer Experience

Enhanced customer experience is another top IoT benefit because IoT devices can provide real-time updates to customers regarding the status of their orders. In other words, customers can know the exact location of their order and the expected delivery date from anywhere. Eventually, businesses can enhance customer service and loyalty.

4. Automation

As you know, supply chain management involves many repetitive tasks such as data entry, inventory management, order tracking etc. IoT in supply chain management can save you a lot of time and effort by automating these tasks. Moreover, supply chain managers can invest more time in strategic studies rather than wasting time on repetitive tasks. Plus, automation also improves overall efficiency and reduces errors.

5. Efficient Inventory Management

As mentioned above, inventory management is a crucial yet challenging task. IoT sensors can provide real-time insights into inventory status, helping you make informed business decisions and prevent product shortages. These insights can also let you predict future inventory needs based on customer demands. In addition, IoT devices also let you know about physical factors like product damage, leakages, broken packaging, etc.

6. Asset Tracking

Like inventory management, IoT systems can facilitate asset monitoring and tracking. However, instead of logging the data manually, supply chain managers can now use IoT systems like intelligent materials, sensors, RFID tags, etc., to check the status of each asset item. As a result, managers can quickly acquire all critical data on the delivered product or material.

Benefits of Implementing IoT in Supply Chain Management

  • Since the IoT supply chain can provide real-time data regarding the location, temperature, etc., of goods, you can track them with better accuracy.

  • The IoT devices mounted on machines let you know exactly when to perform maintenance, allowing you to avoid machine failure and unplanned downtime.

  • The IoT supply chain can help you efficiently manage inventory without worrying about material shortage or delay.

  • The IoT supply chain allows customers to know the status of their orders and shipping details from anywhere.

  • Since IoT systems can automate many time-consuming operations related to the supply chain, managers can save a lot of time and effort.

  • Managers can make better decisions and forecasting using the accurate data analytics IoT devices generate.

  • Since IoT supply chains work entirely on software with human intervention, you can experience higher productivity and efficiency.

  • As you know, IoT devices coupled with sensors can provide real-time data on environmental conditions, allowing you to reduce wastage in supply chain management.

  • IoT sensors ensure improved safety, as they can detect hazardous conditions and alert workers to avoid potential risks.

  • Since IoT in the supply chain ensures improved efficiency, reduced wastage and better inventory management, you can save money.

Factors to Consider While Implementing IoT in Supply Chain Management

1. Internet Connectivity

For the proper functioning of the IoT system, you must have an uninterrupted internet connection. With a stable network connection, you can utilise the full potential of IoT. So before implementing IoT in the supply chain, you must check with the internet service provider.

2. Employee Training

Employee training is another factor before implementing IoT in the supply chain. Even though most operations get automated with IoT, you will need employees to operate some devices and gadgets properly. Therefore, employees must be given adequate training before placing them to work.

3. Security

Security is always a concern while implementing any technology, including IoT. So you must ensure that the IoT service provider offers best-in-class security to avoid data loss or theft risks.

4. Cost

The cost of implementing IoT depends on many factors, such as quality, features, installation, maintenance, etc. However, you can get an excellent deal by contacting the best IoT service provider.

5. Compatibility

You must also ensure that the IoT technologies you prefer are compatible with your areas of the supply chain. Again, it is to ensure that the integration of IoT devices and sensors can be performed smoothly.

Final Thoughts

In conclusion, the Internet of Things dramatically impacts the supply chain. As mentioned earlier, IoT can bring many benefits to supply chain managers. With improved visibility, accuracy and easiness, IoT takes a new turn from traditional supply chain management. Apart from the benefits mentioned in this detailed guide, we believe IoT will bring more future changes to the supply chain!

So now, all you need is a perfect IoT development service like Toobler to kick-start your dream of implementing IoT into the supply chain. Toobler is a highly recommended IoT development company for many reasons, such as flexible pricing, world-class quality and security.