INTERNET OF

THINGS IN SUPPLY
CHAIN
MANAGEMENT

Submitted by:
Debojyoti Mondal --200301005
Rahul Choudhary --200301017
What is Supply Chain?
A supply chain is the network of all the organizations, individuals, resources, technology
involved and the activities in the production of a product and the sale of a product, from the
delivery of materials to the manufacturer from different suppliers and with the end delivery to
the end consumer. The supply chain section whose main responsibility is to provide the
finished product to the end consumer by different means of transport is called the distribution
channel.
Supply chain management or SCM is the management of information, materials and finances
as they are moved from one hop to such as the flow from supplier to the manufacturer and
then from the manufacturer to the end user. The three major flows of the supply chain are,
information flow, the product flow, and the flow of the finances. Supply chain management
involves coordination and integration of these flows both inter and intra companies.

There are six components of almost all kinds of supply chain management:
➢ Planning –All the resources are passed through proper planning which is required to
meet the consumer demand for an organization’s service or a product. When a supply
chain is established, metrics are being determined to measure whether the supply
chain is effective, efficient and will it deliver value to customers and if the goals are
achieved of an organization.
➢ Sourcing – Suppliers are being selected to provide the materials and services which
are needed to create the end product. Established processes are used to monitor
supplier relationships and their management. Key processes which involve ordering,
receiving, authorizing supplier payments and managing inventory are part if sourcing.
➢ Making – Activities are being organized to accept the received raw materials from
the suppliers, manufacture the product, quality testing and packaging for shipping and
the delivery schedule.
➢ Delivering (or logistics) – Coordinating the customer orders, scheduling of different
deliveries, shipping loads, invoicing customers and receiving finances for product or
services.
➢ Returning – A network should be created whose main purpose is to manage the
return of defective products and the return of payment or replacement of the defective
item.
➢ Enabling – Support processes are established to monitor information flow throughout
the supply chain process and ensure compliance through all regulations. Enabling
processes includes finance, HR management, IT, facilities management, and
designing of product, sales, portfolio management and quality assurance.
Challenges of the sector:

The modern supply chain must evolve to meet new demands and supply chain challenges,
and supply chain managers need to plan ahead to keep everything flowing smoothly. A
combination of consumer expectations, more routes to market, international complexities and
other factors creates significant challenges throughout the supply chain network.

Following are the major challenges in supply chain management:

➢ Increased Costs Throughout the Supply Chain

Profit margins are under pressure as costs creep up throughout the supply chain network.
These costs come from many areas, and a lack of visibility and accountability for reducing
them can result in rising operational expenses.

➢ Supply Chain Complexity Due to Multiple Channels to Market

Consumers buy products across multiple channels, and as routes to market increase, the
underlying supply chain must adapt. Supply chain managers need to develop variations on
supply chain processes to address each of the channels.

eCommerce websites selling directly to consumers require fast last-mile delivery and local
logistics. Traditional retailers and wholesalers need large storage locations close to major
metropolitan areas, combined with accurate inventory control to ensure product availability.

➢ Consumer Demands Drive Need for Improved Speed, Quality and Service

Consumers have never had more choice, and every industry is facing disruption. Quality and
speed are becoming as important as pricing when it comes to purchasing goods: Consumers
want retail goods immediately and online goods within a few days. Products must meet the
quality requirements demanded by consumers. Raw materials, goods and finished products
must meet safety and other compliance regulations mandated by law, in all countries where
they’re available. The most successful products are those that meet consumer requirements of
quality, availability and price. The underlying supply chain is vital to meeting those needs.
 ➢ Risk in the Supply Chain Creates Pressure

International complexity, environmental changes, economic pressures and trade disputes all
put pressure on the supply chain. This pressure can easily turn into risks and issues that
snowball throughout the network, causing significant problems: Suppliers, manufacturers,
logistics, clients and customers are spread across multiple countries, time zones and
continents, requiring careful coordination and management. Adding more steps to the supply
chain creates exponential complexity for upstream and downstream partners. Siloed data and
a lack of visibility increases the difficulty of reporting, business intelligence and good
decision-making.

➢ The Impact of Supply Chain Volatility

Volatility and complexity don’t just create problems at a specific point in the supply chain;
instead the impact can ripple throughout the entire infrastructure. Supply chain managers
must deal with these issues promptly before they create delays, backlogs, bottlenecks and
other issues. Increasing volumes of internationally-sourced goods are driving up port
congestion. This creates additional pressures as ships, trucks and trains need to wait to load,
unload and transfer products. These issues are exacerbated as port authorities and operators
charge organizations to store goods at the port.

➢ Other challenges of the Supply Chain

Other areas supply chain managers need to consider include:

Speed to market based on just-in-time manufacturing – This requires certainty around the
location and timeliness of raw materials, parts and products.

Demand for products based on sales and marketing cycles – Consumer demand for product
lines must be predicted and identified early and planned into supply and manufacturing.

Inventory management based on balancing availability and costs – Retailers want to cycle
through inventory more quickly and not have so much of their cost sunk into slow-moving
products, requiring faster upstream supply chain management.

New products require fast prototyping and development – Bringing a new product to market
demands a reliable, fast and high-quality supply chain.
How to Solve Your Supply Chain Challenges
The increasing complexity of international supply chains means that supply chain managers
must use a combination of tools, techniques and approaches to meet everyday and long-term
challenges. We’ve explored some of the main pressures and demands on the supply chain and
we present some ways to help manage your supply chain more effectively.

❖ Manage and Drive Down Costs in the Supply Chain

Rising fuel, commodity and labor costs can drive up charges for organizations throughout the
supply chain that ultimately get passed on to the end business. Supply chain managers need to
understand and control cost challenges.

• Visibility of Costs through Accurate Budget Control and Reporting

Good cost control relies on transparency. All organizations in the supply chain should report
on their costs and overheads in a common and centralized way to allow for accurate cost
tracking and reporting. This reporting can be linked to financial metrics and provide early
sight of cost leakage and other financial issues.

• Robust Cost Controls Built Into Contracts and Service Level Agreements

Supply chains work best when everything is clearly defined. Make sure that all contract
documents, statements of work and service level agreements (SLAs) make specific mention
of costs and cost controls. Build a cost review process into sourcing, manufacturing, logistics
and other operations with proper accountability both within third-party organizations and the
supply chain team.

❖ Optimize Inventory and Supply Chain Demands Across Multiple Channels

The number of ways that businesses and individuals can acquire goods has increased
dramatically. Supply chain managers need oversight across every route to market with
accurate demand planning. This will help you to maintain appropriate inventory levels, so
channels don’t run out of products.

Managing demand through a supply chain is difficult enough when you only need to look at a
couple of distribution routes. Add in third-party marketplaces, ecommerce, wholesale or
dropshipping and things become much more complex. Supply chain managers need
transparent reporting that shows supply and demand planning across all channels. This allows
you to react to demand changes quickly, so you can raise orders and reroute inventory before
stock levels become an issue.

❖ Improve Quality and Speed in the Supply Chain

Supply chains can always become more efficient. You need visibility of the quality and
condition of raw materials, parts and finished products as they move through the supply
chain. A combination of independent auditors, quality checkpoints and monitoring devices
helps make sure that products are sourced and manufactured to your exact standards. These
standards should be clearly documented in contracts, SLAs and other documentation.

❖ Manage and Mitigate Risks and Issues in the Supply Chain

Risk is a natural part of the supply chain ecosystem. Complex international supply chains can
be impacted by issues including:

• Tariffs, fees and customs processing delays

• Failure to meet regulatory or compliance demands

• Port congestion and delays in storing or transporting products

• Economic, environmental and political risks impacting the free flow of goods

These problems are too big for a single organization to resolve, so it’s essential that supply
chain managers have the right visibility, tools and approaches to plan around and mitigate
these risks.

❖ Create Excellent Relationship Management Disciplines

Supply chains rely on strong relationships with suppliers, manufacturers, logistics and other
third parties. Although the governance of that relationship will be captured in contracts and
service level agreements, excellent day-to-day relationship management will increase
goodwill and help you resolve issues. Clarity and communication through the supply chain
will help supply chain managers and other organizations to collaborate more closely.
What is Internet of Things (IoT):

The internet of things (IoT) is a system of interconnected computing devices, machines

including both digital and electrical, objects, animals or even people which are provided with
unique identifiers (UIDs) and are connected over a network through internet and have the
ability to transfer data over that network and for which human to human or human to
computer is not required. Increasingly, organizations are using internet of things in a variety
of industries mainly to operate more efficiently, in order to understand the customer better
and to deliver improved customer service, improved decision making, increase the value and
expand the business.

The IoT is gaining increasing attention. The overall aim is to interconnect the physical with
the digital world. Therefore, the physical world is measured by sensors and translated into
processible data, and data has to be translated into commands to be executed by actuators.
Due to the growing interest in IoT, the number of platforms designed to support IoT has risen
considerably. As a result of different approaches, standards, and use cases, there is a wide
variety and heterogeneity of IoT platforms.

According to McKinsey Global Institute, IoT devices must be able to monitor their
environment and report their status, receive directions and act on information they receive.

IoT based solutions with sufficient details in supply chain:

One of the most important changes for organizations will be how internet of things (IoT)
related technology impacts supply chain processes. Here, we will discuss how implementing
the Internet of Things (IoT) is expected to improve supply chain process management
solutions.
Better Maintenance Practices

It is said that every supply chain process depends on the health of machinery. When a
machine like an industry plant or factory equipment or even a delivery truck gets faulty, it
can be possible that due to this technical issue, much potential inefficiency can be caused
even the loss of revenue. Thanks to the Internet of Things (IoT), smart sensors can now be
deployed in these machines and tools for better maintenance techniques and prevent failures.
IoT can be used to have a proactive approach through real time monitoring of processes
instead of reactive approach that we once the equipment gets faulty than the action will be
taken. This predictive maintenance approach can be the key so that the supply chain process
keeps running smoothly and further help companies save money from preventing issues and
failures that may arise.
Accurate Asset Tracking
Supply chain efficiency greatly depends on tracking solutions of assets. Asset tracking
approach is not a new technique for supply chain management. IoT techniques have the
ability to enhance the quality of information and the amount of information which can be
collected at a time. By installing sensors in the assets, organization can now track the assets
till their exact location is reached. With the available information through IoT asset tracking
technique, businesses will now be able to identify inefficiencies that previously would have
remained hidden. This approach will also help them to enhance the quality of supply chain
and control practices.

Improved Inventory Practices / Locate goods in the warehouse

The Internet of Things (IoT) will now allow companies to monitor inventory on real time
basis and in which are much more efficient. When IoT sensors have been installed important
inventory, employees can monitor inventory levels at any given time and in case if the stock
of some specific material gets low, alerts can be generated. IoT techniques can be designed
for the analysis of the information regarding inventory levels and the use of different
materials and products. With this data, companies can now identify patterns and trends which
will help them to manage their inventory in a much more efficient manner. Thanks to real-
time location trackers, for instance, employees on-site can easily locate goods and get quick
to the exact aisle for a specific product. In this case, Internet of Things enables seamless
workflow and performance that is impossible to achieve otherwise. Moreover, combined with
artificial intelligence, IoT becomes a stepping stone for full-on warehouse automation with
little to no human supervision.

Transparent Marketing
Customers have rarely thought regarding the products that where it came from or the way the
product got into the store. However, this is going to change big time. IoT technology can
provide one of the answers for companies that want to show to the customers that they using
ethical and responsible methods for sourcing their product. With the usage Internet of Things
tech, companies can bring supply chain transparency to levels which could never have been
possible before. For an organization that wants to appeal socially to the conscious consumers,
the transparent supply chain process provides an opportunity to show brand values that align
with those of their customers and to help increase brand value. Companies that want to take
advantage through the implementation of IoT supply chain solutions should start now. By
early adopting of this technology, organizations can get competitive edge over other
organization and reap more profits from others.

Benefits of IoT in supply chain:

With the growing popularity of the Internet of Things in mind, more businesses seek to gain
the benefits of the technology in the supply chain. IoT can improve company’s efficiency and
reduce operating costs, here’s an overview of its benefits in SCM.

➢ Higher speed
Smart route-planning tools and IoT tracking technologies increase the overall supply chain
speed exponentially. Integrating these technologies in everyday operations, managers shorten
the feedback circle, benefit from faster decision-making, proactively mitigate delay risks, and
generally improve the efficiency of locating goods within the warehouse.

➢ Higher accuracy

Connected platforms are faster and easier to access than closed systems. By building a cloud-
based IoT system, companies ensure all parties involved in the supply chain lifecycle will
have access to relevant data and can address issues fast. On top of that, web and mobile tools
for different users (employees, managers, operators, customers) help them work with the
insights, use collected data to build strategies and different scenarios relevant to user roles
and needs.

➢ Improved flexibility
IoT provides managers with detailed insights on the goods turnover, helping retailers and
supply chain managers know how many units of every product should be ordered. The
Internet of Things reduces the impact of human error as well by adding high precision in
asset tracking, shipping and navigation for the drivers on the road.

➢ Better segmentation
Combining IoT and supply chain management is a good way for retailers to learn more about
their products, customers and demand and build relevant strategies. Data collected throughout
the product cycle helps better understand the market and segment products with the target
audience in mind.

➢ Increased efficiency
IoT empowers a wide range of connected platforms geared towards employees. Tools like
smart glasses help instruct warehouse workers seamlessly to ensure they spend less time
completing a task. Also, IoT captures efficiency-related data and brings more awareness into
resource and labour management. Thanks to the technology, supply chain managers will
ensure all the parties involved in the delivery perform to the best of their ability.
Challenges of using IoT in logistics and supply chains:

Despite the growing need for digital transformation, many companies still use outdated
legacy systems to manage deliveries and track assets. By leveraging the use of IoT in supply
chain, can solve many problems associated with outdated operational practices and
technologies. However, there are many challenges to keep in mind.

➢ Skill gap
Adjusting to managing connected systems will require intensive training for warehouse
workers and vehicle drivers. Explaining the security practices and outlining the guidelines for
using corporate platforms is a time-consuming process.

Finding a team skilled enough to design a solution that caters to the company is a challenge
on its own, considering the lack of professional IoT training. With the international tech
talent shortage in mind, supply chain managers should understand that hiring skilled
professionals will be a time-consuming process.

➢ Increased data storage challenges

Large data pools are one of the numerous advantages the Internet of Things provides supply
chain managers with. However, with that power, comes the responsibility of acquiring
enough server power to store and process all the collected data. Company managers will need
to develop data governance policies, look for data scientists and analysts to ensure they drive
the right conclusions from IoT-based insights.

➢ Security threats
Building a secure architecture is another objective supply chain managers have to tackle
before fully transitioning all processes to connected platforms. Data processing and storage
vulnerabilities can result in outside attacks and leaks, tanking the company’s reputation and
increasing the cost of failure. The good news is, by implementing the concepts of machine
learning and cryptographic hardware monitoring, company managers can mitigate outside
security threats and access all stored data safely.

➢ Connectivity issues
IoT heavily relies on having a stable Internet connection. Since fleet drivers are moving from
one location to another, there’s not always a reliable network. As Internet coverage increases
and 5G becomes widely available — the connectivity issue is likely to mitigate itself — for
now, supply chain managers have to put up with it.
Bandwidth is another issue to keep in mind when implementing IoT in the supply chain.
Connected platforms usually consume a lot of bandwidth and require a high-level server farm
to operate smoothly.
IoT in supply chain: examples and success stories:

Here are a few examples of how large-scale corporations benefit from IoT on a daily basis:

Amazon (IoT and the Smart Warehouse) – A symphony of humans

and machines working together

For one the world’s most recognised brands, supply chain logistics are incredibly important.
Every one of Amazon’s orders is unique, meaning it manages millions of different products
of various shapes, weights and sizes.

Amazon excels in the use of IoT devices in supply chain. Amazon employees used to roam
warehouse floors to scan for each product, now they use Wi-Fi connected robots provided by
Kiva Systems – which Amazon acquired in 2012 (now named Amazon Robotics) – to
identify products by reading QR codes using built-in cameras for warehouse management,
lifting and transferring products from one place to another inside the warehouse. By
implementing IoT in the warehouse, Amazon uses the human workforce more productively,
allowing people to focus on tasks like packing, wrapping, or inventory management.

https://www.youtube.com/watch?v=IMPbKVb8y8s
The AI system assesses which products are to be prioritized for Amazon Prime orders, for
example, and the robots do the rest. While this takes place, workers can focus on packaging
an order or restocking shelves. Its robots and humans work side by side through IoT.

Future Prediction: 4 million robots in warehouses by 2023.

Volvo puts IoT in the Driver’s Seat for Vehicle Connectivity

The company is using a connected cloud-based system to monitor the shipment of car parts
from different countries. Volvo uses the Internet of Things to track vehicle delivery to the
corporation’s international suppliers.

Volvo Group has implemented a new generation IoT tracking solution in its Trucks plant
located in Blainville (in the north of France) to track and locate trucks during the production
and customization process. This innovative solution has significantly improved the supply
chain operations of the factory. The solution is based on a LoRaWAN® private network
deployed and managed using the ThingPark™ IoT Platform.
Volvo Group is one of the world’s largest truck manufacturers and includes several brands
such as Volvo Trucks, Renault Trucks, UD Trucks and Mack Trucks. Its Blainville plant
realized that workers were wasting hours of their time everyday looking for vehicles on
the huge parking areas of the factory, having to track around 250 trucks in a plant which
produces 72 vehicles and assembles over 230 cabs daily for the entire Renault Trucks and the
medium duty Volvo Trucks ranges. Considering that trucks can be moved several times
during the day and that the location of each truck was done manually on paper, the operations
were significantly slowed down.

After testing a dozen of available solutions and devices, Volvo chose to solve this
problem by placing Abeeway’s GPS Industrial Trackers inside every truck going through the
assembly line. Each time a truck moves or stops, the movement is tracked, and the position is
sent to Actility’s ThingPark LoRaWAN NetworkServer using LoRaWAN®, which is a
global communication standard and one of the leading wireless networks technologies
designed to allow long-range communication at a low data rate, reducing power and cost of
transmission, and targeting key IoT requirements such as bi-directional communication, end-
to-end security, mobility and localization services.
 • UK's Food Service giant JJ Food Service builds IoT Solution for Supply
Chain management, achieves control over its food temperature in-transit.

JJ Food Service is the UK's leading foodservice specialist that supplies food & non-food
items to 30,000 plus customers of varied business like restaurants, cafes, etc., across the UK.
It has two sales channels - website and call center; through which customers order online and
also request for delivery of items. During the food order delivery, if the temperature of
perishable food is not optimal then there is a risk of customer returning the goods. The truck
drivers need to monitor the temperature of the truck periodically and check if it is within the
optimal range and doesn’t go beyond the standard temperature limits or thresholds. Also, if
there are any mishaps during transit like incorrect loading and damaged goods; drivers need
to manually make the adjustments and issue credits for the customers before collecting the
cash.

To streamline this food delivery operations and make it more simple, efficient and intelligent,
the company wanted to automate the process by taking a step further; where drivers could
deliver through IoT-connected mobile assets, such as Bluetooth printers and Bluetooth
temperature sensors mounted in trucks. They needed a mobile application for drivers that
would eliminate their job of making manual adjustments in the invoice and collect the
amount. By deploying this advanced technology, the company wanted to monitor the
temperature of goods in real-time to ensure that high-quality food items are delivered;
thereby offering a differentiated service to achieve customer delight.
The IoT solution helped the company to up-scale service to 30,000+ customers, handling
about 60,000 orders/month with 500+ connected devices to deliver high-quality food items.
Using Microsoft Azure platform and IoT expertise, IoT consultants have architected a robust
& scalable supply chain management solution. It collects data from IoT enabled devices
periodically, stores and monitors the temperature using smartphone application. The IoT
enabled devices used in the solution are Bluetooth ZenMeasure sensors installed in the
delivery truck compartment, which capture freezer and chiller temperature. For real-time
temperature monitoring, Smartphone background tasks are triggered that send real-time data
of temperature to Azure Event Hub and stores the same in Azure SQL DB locally.

Azure Event Hub is leveraged to collect data from multiple sensors installed on trucks. This
data was later pulled using Azure Stream Analytics, to generate real-time/on-the-fly analytics
in graphical form using Microsoft Power BI. Azure SQL DB is used as a repository to store
static data sourced from Stream Analytics for any further analysis.
Main players providing such services along with their
business/service models

Major players providing IoT services for supply chain management are:

COMPANY BUSINESS MODEL

Acitility ▪ Sell IoT sensors
and devices.
▪ Sell IoT software
applications.
TCS Consulting

DateXCorp ▪ Consulting
▪ Hardware
Products
Aeris ▪ Consulting
▪ Software Solutions

BlumeGlobal Software Solutions

Indian Context:
There are a large number of companies working on a wide variety of solutions. Lets take a
look at some of the promising Internet of Things (IoT) companies in India:

TagBox:

TagBox’s flagship solution Boxlens, a supply chain monitoring IoT platform, is helping
organisations solve three key challenges - product quality and compliance, end-to-end
traceability, and operational efficiency. An interesting aspect about the platform is that it not
only helps in improving the visibility of the products and assets, but also the process and
environment in which they operate. The use cases range from enabling improvement in
temperature compliance for cold chains, to a reduction in spoilage of perishables and damage
to fragile goods and higher visibility of supply chain assets even at a granular level like
pallets, bins, and boxes.

TagBox provides a completely wireless hardware setup and a fully configurable software
platform. The solution can also be contextualised and customised to meet the business’
requirements. The other key factors are the capabilities of the digital analytics platform itself
and the ability to monitor at a level of granularity that the business demands.

Eyedentify – Driver Monitoring

Data captured from the IoT devices help companies to monitor the performance and health of
their drivers. A driver monitoring and alert system (DMAS) provides companies with a
complete insight of assets and ensures driver safety on the road. Further, it minimizes
accidents and ensures that supplies reach their destination on time.

Indian startup Eyedentify offers a DMAS to prevent accidents. The company leverages IoT
and analytics to monitor driver behavior and vehicle location in real-time. Eyedentify’s
DMAS uses dashboard cameras to detect conditions such as drowsiness, fatigue, and
distracted driving. The system then alerts the driver with audio warnings to stay attentive and
also notifies the fleet manager in such instances as well as provides insights to monitor driver
performance and behaviour.

CONCLUSION

Today, supply chain firms’ primary objective is to ensure just-in-time distribution, visibility
of the supply chain, accountability of the product lifecycle and quality services. Any supply
chain company’s performance lies in inefficient warehouse control and warehousing, internal
sales process automation, quick delivery, and secure storage and standard of products.

The Internet of Things ( IoT) is going to revolutionize the supply chain domain by taking
with it intellectual connections and use cases. IoT-based technologies are being widely
adopted in the industry, providing multiple benefits and opportunities.

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