5 Benefits of Having an IoT-Enhanced Supply Chain

The Internet of Things (IoT) has the power to create a smarter and more connected world of commerce. With the increased importance of supply chains and warehousing to eCommerce and global trade, there’s never been a better time to consider adding IoT capabilities to your logistics facilities.

Here are five benefits that your supply chain can capture by implementing targeted IoT solutions. From real-time inventory tracking to the management of surety bonds and other paperwork, an IoT-enhanced supply chain can take your logistics operational capacities to the next level.

See also: The Strain on Data Supply Chains: Why Data Democratization is a Priority

1) Real-Time Tracking: Transparency and accountability are the foundations of a functional supply chain, and real-time tracking provides both. IoT devices such as GPS monitors can now track everything from a shipment’s location to its current temperature, providing up-to-the-minute facts that help logistics professionals truly understand how their supply chains operate.

Real-time tracking is particularly useful for high-value items and temperature-sensitive goods. Every stage of a shipment’s chain of custody can be mapped and verified through the use of IoT data and device check-ins. As just one example, IoT devices can automatically flag shipments that have left a safe temperature zone, helping to protect consumers from spoiled goods.

This allows accountability to be assigned in the right places and for targeted improvements to be made in the supply chain elements where they’re needed most. Increased transparency creates a virtuous cycle in which all stakeholders are both more cognizant of and more accountable for their responsibilities.

2) Forecasting Accuracy: A properly implemented IoT system can help improve a business’s demand forecasting. By automatically collecting data, IoT systems improve data accuracy and give supply chain managers better materials with which to work in creating demand forecasts.

IoT improves data collection practices in a variety of ways. First, it substantially reduces the influence of human error in data collection. It allows data to be collected at all times or at specified intervals and saves labor hours spent manually collecting data. Finally, it can allow businesses to collect data that would be difficult or impossible to collect manually.

However, it’s important to remember that IoT solutions need to be accompanied by compatible backend and software solutions. Logistics professionals should design their IoT systems in tandem with their logistics and demand forecasting software to ensure that their IoT data is usable and that their analysis is focused on the right factors.

3) Inventory Control: Inventory control is a critical part of warehouse and supply chain management, and IoT can provide benefits in this area as well. By using advanced IoT sensors that automatically track and analyze inventory positions and stock levels, supply chain professionals can create an accurate and up-to-the-minute inventory tracking system.

Most IoT inventory control systems automatically reconcile their inventory counts with records, making laborious hand counts unnecessary and improving consistency and reliability. The systems’ sensors also gather data that can be analyzed through IoT-enabled warehouse management software to identify bottleneck points and monitor the minute-by-minute movements of inventory that determine a warehouse’s operational efficiency.

IoT inventory control technologies such as smart shelves and RFID scanners are already in widespread use. RFID has become particularly popular as a method for tracking high-value inventory, and it can also provide increased efficiency over traditional barcodes. Perhaps most exciting of all, even more advanced technologies such as inventory scanning drones are on the horizon.

4) Automation: Supply chain automation will continue to grow in importance throughout the 2020s, particularly in the warehouse. As businesses automate increasing amounts of warehouse tasks, they’ll need accurate and immediately available data to power their automated systems.

Consider this example: A customer places an online order with a business that has automated its warehouse operations. Before the customer ordered, the warehouse’s smart shelving system had detected the product’s stock status via a weight plate, so there’s no danger of a backorder. An automated picking system receives the pick order from the computer, and a mechanical system moves the item onto a conveyor belt to a packaging station. While the package is in transit to the customer, an IoT sensor tracks it and ensures that it’s handled with appropriate care.

While most supply chains won’t go straight to such an advanced level of automation, almost every system can benefit from at least one of the many innovations of the IoT enhanced supply chain. The key is to find an automation system that works for your logistics applications and implement it in a way that achieves your business goals.

5) Paperwork Management: Paperwork management is key for smooth supply chain operation, but it’s also a common employee pain point, particularly when the responsibility falls on workers such as truckers. By using smart logistics solutions, businesses can automate their most cumbersome paperwork tasks, such as verifying a trucker’s freight broker bond or processing a bill of lading.

It’s all made possible through the tools of electronic data interchange (EDI). EDI systems use standardized data formats to automatically exchange data with trading partners. When paired with properly implemented IoT, EDI systems can be an extremely effective tool for streamlining the data exchanges that keep commerce moving.

Final Thoughts

Of course, capturing these benefits depends on a thorough and well-considered implementation of IoT best practices. Adding IoT devices to your networks without properly securing and integrating them invites dysfunction at best and disaster at worst. Always follow the key security practices recommended by IoT professionals, such as regularly checking for IoT software updates and changing passwords.

However, when implemented correctly, IoT enhancements can be transformative factors for a supply chain. As the world of commerce gets smarter, the logistics industry will increasingly rely on these devices to maintain the agile and data-driven approach that today’s businesses require.