The benefits of the Internet of Things for the supply chain (and 5 use cases)

A growing number of supply chain leaders are turning to the Internet of Things (IoT) as a way to improve efficiency, transparency and sustainability. Siyi Xu, consultant at Procura, describes five use cases of how the Internet of Things can be applied within the supply chain function, and the benefits that come with the rapid emergence of the technology.

According to a study by Gartner, the global market for Internet of Things solutions is expected to reach approximately 1.5 trillion euros by 2025.

Growth is driven by the wealth of benefits that technology can bring to industries, ecosystems and functions with organizations – McKinsey & Company, for example, believes that IoT use cases could have an economic impact of up to reach 10,000 billion euros by 2025.

IoT is defined as “a network of physical devices integrated with electronics, software, sensors, actuators and connectivity that allows devices to connect and exchange data using the cloud computing”. Technology creates opportunities for more direct integration of the physical world into computer systems.

Five use cases showing how IoT can advance the supply chain


Inventory Forecast

Collecting data intelligence, with analysis of patterns over time, enables accurate prediction and response to faulty operations. This gives inventory planners, production and purchasing managers better information and forecast accuracy when making executive decisions on buying, manufacturing and selling products.

For example, ACE Hardware, a hardware retailer uses IoT solutions to track product orders and shipping status. “IoT sensors enable real-time point-of-sale analysis, allowing ACE to replenish inventory systems faster and reduce inventory costs.”

Track shipments and assets
IoT systems such as RFID (Radio Frequency Identification) and global SIM cards provide rapid access for supply chain managers to locate the shipment or asset, allowing them to use real-time data to identify, locate and determine the status of an existing order or asset. Instead of recording data manually or using traditional inventory devices, managers can now use software for automated data collection and get a real-time update on the status of all assets.

For example, for shipping, FedEx “uses cloud platforms powered by fleet data, along with traffic patterns, weather reports and other sources, to plot the most efficient routes for items being distributed. through their network. This cloud application improves the accuracy of decision making, the accuracy of delivery forecasts and the speed of risk mitigation.

An example of asset tracking is Deutsche Post DHL Group, a leading logistics company, and Sigfox, a leading IoT service provider, have partnered on an IoT process optimization project for the supply chain DHL’s German parcel network. IoT trackers have made it possible to digitize the administration and location of the hoops used for the transport of parcels.

This not only increased the transparency of DHL’s supply chain, but also helped to improve the quality of customer service and reduce operational costs.

Maintenance and repair
IoT-based solutions can collect data such as temperature, humidity, and machine malfunctions. This can be used by cloud computing applications to monitor real-time operations and visibility. Photographic instruments can scan machine components, such as blades, to send alerts for predictive maintenance. Production facilities that integrate sensor networks into machinery can therefore increase uptime, reduce operating costs and improve overall quality of service.

For example, GE Digital is collaborating with FogHorn, a leading developer of edge computing AI software for the IoT, which has developed a solution using its complex event processor to transform raw machine data streaming technology combined with RFID into workable parts and process quality characteristics.

By analyzing the vast amount of RIFD sensor data produced during the production cycle, GE detects defects early and can develop smart, unscheduled maintenance. This has helped GE significantly improve the efficiency of manufacturing operations.

Quality control
Moreover, IoT-based solutions can also help product managers monitor and control the quality of raw materials and productions. IoT scanners can analyze raw materials for characteristics such as paint color or fabric composition to confirm quality and accuracy before they are used for a finished product.

For example, Daihen Corporation, an industrial electronics and electrical company, automates the quality control of its industrial transformers by using outsourced IoT solutions to ingest and aggregate multi-protocol streaming data collected from various assets and use analytics in real time based on the cleaned data. to determine inspection pass/fail and to meet high industrial quality standards for electrical transformers. This effectively reduced production time and labor costs to maintain product quality.

Storage/status monitoring
Environmental sensors allow supply chain managers to track shipping conditions and react proactively to adapt to changes. IoT solutions can collect data on vehicle interior temperature, pressure, humidity, and other factors that can compromise product integrity and trigger automatic condition adjustment.

For example, software development vendors such as ScienceSoft use Amazon’s AWS cloud as their server. The data collected by the sensors is then transmitted to the cloud via GRPS. This IoT solution enables cargo temperature and humidity monitoring, which is then integrated into customers’ existing vehicle management systems.

The Benefits of Implementing the Internet of Things


Improved transparency

Integrating IoT solutions into supply chain management is a good way for retailers to learn more about their products, customers, and demand, and build relevant strategies. The data collected throughout the product cycle can help them better understand the market and segment the products considering the target audience.

Improved efficiency
Smart route planning tools and IoT tracking technologies increase overall supply chain speed exponentially by shortening the feedback circle, reducing decision-making time and proactively mitigating risk delay.

Companies with a cloud-based IoT system can resolve issues faster by providing access to relevant data and sharing it with all parties involved in the supply chain lifecycle. This data helps different stakeholders at different stages of the supply chain to shape strategies and scenarios according to their own roles and needs. This effectively minimizes the impact of human error in data collection and improves overall accuracy over time.

Risk mitigation
IoT solutions can leverage the impact of technology and artificial intelligence to go beyond the constraint of human capacity and identify unforeseen problems or saving points in the supply chain, such as resource leaks, inefficiencies and machine breakdowns. These connected systems then provide accurate, real-time tracking information and alert notification at various stages of the supply chain.

This not only enables the IoT to act as a springboard for full warehouse automation with little or no human oversight ix, but also increases business agility and adaptability to the uncertain global market.

Cost reduction
By improving businesses’ ability to mitigate risk, IoT solutions can reduce the cost of unplanned downtime and save production time over planned maintenance by monitoring a variety of data and sending instant alerts with notifications in case of problem. Additionally, historical data collected from IoT sensors can be used by analytical tools to predict future behavior, resulting in less unplanned disruptions, increased efficiency and production capacity.

Improved durability
In a smart supply chain, IoT sensors can improve business sustainability by providing managers with relevant information about how energy and resources are used in their supply chain and product cycle. By providing better information and raising awareness, IoT solutions enable leaders to implement green strategies at different stages and integrate large-scale initiatives, such as the active choice of renewable energy, electric vehicles and energy efficient spaces.

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