We are now seeing a combination of mobile computing, analytics, and cloud services, all of which are fueled by the Internet of Things (IoT), changing how delivery and fulfillment companies are conducting their operations. One of the biggest trends is asset tracking, which gives them the tools to make better decisions and save time and money. Companies have used barcode scanners to track and manage their inventory which are now being replaced by newer asset tracking solutions like radio frequency identification (RFID) which offer much more vital and usable data, especially when paired with other IoT technologies.

IoT capabilities are no stranger to warehouses where new replenishment models help monitor inventory and stock levels for distribution. For example, scales and visual sensors alert workers of fulfillment need on shelves. IoT networks can also remove human error on handling inbound and outbound packages by weighing and scanning for deviations in weight, size, density, or other parameters. Based on this data collection, shipping collaboration solutions can match expected versus actual received inventory against POs, ASNs and invoices to ensure accuracy.

IOT Key to Efficiency

Visibility: Supply chain management professionals can now gain a much better understanding of exactly where each item is and how long it’s been there, arming them with the data they need to make informed decisions. Earlier, companies would get only occasional updates and outdated recap reports and it would be too late to make any real changes or adjustments.

Operational efficiency: The real-time visibility shared at every level allowing deficiencies to be identified quickly so that problems can be immediately rectified, or possibly even prevented altogether. Companies can see delays, slowdowns, or trends that will affect the bottom line and inefficient processes that are costing them money can be identified and corrected.

Customer service: IoT devices are helping organizations reduce the amount of time from click to fulfillment. Real-time data access is now essential in order to meet consumers’ expectations. Customers also demand access to information – from up-to-the-minute details on where their item is in transit to accurate alerts notifying them of delivery dates and time.

Inventory management: Today’s customers expect products and services exactly when and how they want them. IoT devices allow organizations to automatically know when products must be restocked or reordered, eliminating delays or inventory issues that would send customers to the competition.

Loss management: With sensors tracking every movement, it’s now almost impossible for merchandise to simply “fall off the truck” en route to its final destination, whether it’s a retail location or a customer’s front door. And if it does, management will know exactly where the incident happened and what factors may have contributed to merchandise loss.

Examples of IoT Transforming Supply Chain

Amazon - Every Amazon order is unique, meaning it manages millions of different products of various shapes, weights, and sizes. Amazon employees used to roam warehouse floors to scan for each product; now, they use Wi-Fi connected robots to identify products by reading QR codes using built-in cameras.

The AI system assesses which products are to be prioritized for Amazon Prime orders, and the robots do the rest. While this takes place, workers can focus on packaging orders or restocking shelves. It is robots and humans working side by side through IoT devices.

Volvo - Volvo is using cloud-based services and IoT technology to support the logistics side of its supply chain in ordering components from different countries to shipping vehicles to suppliers across the world. Furthermore, the firm established a relationship with Microsoft, which involved trialing its mixed-reality headset, HoLoLens. The firm believes the headset could transform car design and the relationship between deals and potential customers.

New Jersey Transport Authority (NJTA) - IoT is clearly an important cost-cutting tool in the long run. The NJTA is working with IBM to deploy 3,000 sensors along the New Jersey Turnpike – one of the busiest roadways in the U.S. The data this generates is used by the emergency services and traffic management operators so that they can get to an accident quicker, and reduce congestion buildup.

Decathlon - Decathlon, a sports retailer that owns 850 stores, is using IoT technology, such as RFID, from Checkpoint Systems in more than 400 of its stores, and plans to extend to millions of its products across the globe. It ensures Decathlon’s products are delivered to vendors with 100% accuracy every time, and items arrive shelf-ready which saves employees time by not manually checking each delivery.

A massive number of different brands are deploying similar operations globally, from The Bouqs Company to Nike and AeroScout to Aarhus University Hospital.

What Should Businesses be Careful About?

Security threats – Apart from the loss of privacy, the biggest concern that most companies have to tackle is related to security vulnerabilities that come with greater connectivity. IoT network also has a variety of security challenges that need to be tackled head-on. I am sure none of us have forgotten about the massive DDoS attack on Dynamic Network Services, Inc. in October 2016 – it was caused by 100,000 hijacked IoT devices. The company which was attacked is a DNS provider – thus, resulting in closing down of the internet for millions of users.

Issues with integration – Supply chains often span thousands of miles across the globe. Therefore, integration issues in IoT implementations can turn out to be very complex to solve. IoT implementer will need to invest in integration skills and technologies to ensure successful implementation.

Analysis of wrong data – Since a colossal amount of data is generated through IoT, one has to be careful about which data to examine. Collection and examination of the wrong data will not give any value and will not contribute to improving the bottom line.

In spite of the challenges, we are optimistic that IoT supply chain will change the world for the better and improve supply chain management all around.