How IoT Will Impact The Supply Chain

Daniel Newman Contributor

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There has been a lot written about the Internet of Things (IoT) and how it will affect nearly
every global industry—from retail to connected vehicles. In my opinion, one of the most
exciting areas of impact—albeit far less sexy than drones and self-driving cars—is the global
supply chain.

When I think of supply chains, I think of the quirky TV show Portlandia. There’s an episode
where two friends are dining out and, before ordering, they insist on knowing as much as they
can about the very chicken they’ll be eating for dinner. They find out his name, appetite, and
social habits. They even travel to the farm where he was raised to make sure it seems like a
happy environment. It’s an option made possible due to the restaurant’s firm commitment to
farm-to-table transparency. The process of assessing a chicken in real-time before agreeing to
eat it may seem a bit outlandish (errr, Portlandish.) But with the IoT, we’ll be able to
experience that type of transparency, and so much more.

Indeed, the IoT is set to revolutionize the supply chain with both operational efficiencies and
revenue opportunities made possible with just this type of transparency. In today’s market,
supply chain isn’t just a way to keep track of your product. It’s a way to gain an edge on your
competitors and even build your own brand. The following are a few areas where we’ll be
seeing the most advancement and change with the ever-advancing Industrial IoT.

Operational Efficiencies

When it comes to operational efficiencies, the IoT offers many:

 Asset Tracking: Tracking numbers and bar codes used to be the standard method for
managing goods throughout the supply chain. But with the IoT, those methods are no
longer the most expedient. New RFID and GPS sensors can track products “from
floor to store”—and I’d venture, even beyond. At any point in time, manufacturers
can use these sensors to gain granular data like the temperature at which an item was
stored, how long it spent in cargo, and even how long it took to fly off the shelf. The
type of data gained from the IoT can help companies get a tighter grip on quality
control, on-time deliveries, and product forecasting. Not too shabby.
 Vendor Relations: The data obtained through asset tracking is also important
because it allows companies to tweak their own production schedules, as well as
recognize sub-par vendor relationships that may be costing them money. According to
IBM—whose Watson AI technology has become a major resource on the supply
chain scene—up to 65% of the value of a company’s products or services is derived
from its suppliers. That’s a huge incentive to pay closer attention to how your vendors
are handling the supplies they’re sending you, and how they’re handling your product
once it’s made. Higher quality goods mean better relationships with customers—and
better customer retention overall.
 Forecasting and Inventory: Another bonus: IoT sensors can provide far more
accurate inventories than humans can manage alone. For instance, Amazon is using
WiFi robots to scan QR codes on its products to track and triage its orders. Imagine
being able to track your inventory—including the supplies you have in stock for
future manufacturing—at the click of a button. You’d never miss a deadline again.
And again, all that data can be used to find trends to make manufacturing schedules
even more efficient.
 Connected Fleets: As the supply chain continues to grow—upward and outward—
it’s even more imperative to ensure that all your carriers—be it shipping containers,
suppliers’ delivery trucks, or your van out for delivery—are connected. Again, the
data is the prize. Just like cities are using this data to get to emergencies quicker or
clear up traffic issues, manufacturers are using it to get better products to their
customers, faster.
 Scheduled Maintenance: Of course, the IoT can also use smart sensors on its
manufacturing floors to manage planned and predictive maintenance and prevent
down-time that can cost so much.

Revenue Opportunities
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The chance to know more—and understand more—about our customers, their buying habits,
and the trends associated with them is invaluable. It allows businesses to form tighter
connections with customers and, inevitably, market to them in new and better ways. Beyond
the use of data for improved efficiencies noted above, for instance, businesses can get
creative with supply chain transparency. They can build a reputation of social responsibility
by allowing customers to access—and with AR, even see—where their product came from,
who made it, and the conditions in which those workers lived. They can see who wore it—
whose celebrity hands may have touched it—which countries it may have traversed to reach
their homes. Heck, maybe supply chain is sexy after all.

How close are we? That depends. Research shows 70% of retail and manufacturing
businesses have already begun to transform their supply chain processes. However, when it
comes to supply chain, there is far from a level playing field. For the IoT to be truly effective,
all members of one’s global supply chain must be connected. In an age when many
companies are just now embracing the concept of mobility, that may take a while. Still, as
technologies like blockchain and edge computing continue to take form, there is so much
further we can go to make our supply chain even more efficient—and creative—than ever
before. Perhaps that’s where the real excitement lies.

Daniel Newman is CEO of Broadsuite Media Group, principal analyst at Futurum and
author of Futureproof.

Daniel Newman Contributor

I am a principal analyst of Futurum Research and CEO of Broadsuite Media Group. I spend
my time researching, analyzing and providing the world’s best and brightest companies with
insights as to how digital transformation, disruption, innovation and the experience economy
ar...

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