It’s holiday season 2022, and the real magic this time of the year is worked by supply chain operators. Customers buy millions of products from various offline and online platforms. Some are pre-ordered, others are bought at the very last minute, and some need to be exchanged for the perfect gift item for a friend or family member.
A streamlined supply chain ensures that each item moves from source to destination without any damage – often keeping the customer in the loop.
One of the best ways to achieve this is through IoT. The Internet of Things (IoT) transforms supply chains into a well-oiled engine for order fulfillment. It endows retailers and logistics companies with nothing short of Santa-like capabilities!
How Does IoT in Supply Chains Work?
The Internet of Things (IoT) is a system of networked, data-monitoring, report-generating, and data-exchanging physical objects. Typically, IoT devices are linked to computer systems by data and Wi-Fi networking.
Internet-connected equipment (e.g., humidity sensors, GPS trackers, etc.) allows the collection of real-time data on items that are housed and/or transported, inventory levels and shipment progress, warehouse, and vehicle environmental conditions, etc. The raw data is then analyzed, archived, and evaluated on the cloud to allow continuous end-to-end supply chain monitoring and rapid response to changes.
If sensors discover deviations from the specified temperature of cold storage facilities, for instance — the control software sends a message to the actuators to modify the temperature and alerts supply chain operators.
Utilizing GPS and other technologies, IoT devices can monitor and verify items and shipments all across the supply chain. This is particularly important during the holiday season, when there is very high retail demand, resulting in unprecedented pressure on logistics networks and supply chains worldwide. As per Statista, the United States had over 5,000 supply chain interruptions during the Christmas season of 2021, which affected sales. That’s what IoT aims to prevent.
Supply Chain Use Cases for the Internet of Things
IoT-izing your supply chain can make it easier for retailers and logistics companies to “play Santa” in the holiday season! Here’s how:
1. Optimizing production at the very root, long before the holiday season begins
Utilizing IoT solutions, suppliers of raw materials can monitor their technological processes, like collecting real-time information on crop health and livestock concerns in farming and agriculture, monitoring emergency situations and logging operations in forestry, analyzing oil configurations within pipeline projects in oil extraction, etc. The information assists them in increasing actual production, enhancing the quality of the raw materials, reducing energy usage, and ensuring profitability.
2. Minimizing errors and waste in the assembly line, even as seasonal demand picks up
Manufacturers use IoT solutions for the real-time monitoring of production activities and equipment conditions. This lets you find bottlenecks and implement the appropriate modifications – decreasing downtimes, boosting asset utilization, and enhancing production efficiency. IoT also contributes to sustainability by enabling compliance with environmental rules and the implementation of green plans via the monitoring of energy and water consumption and emission levels.
3. Enabling timely delivery to retailers and e-commerce sellers, catering to holiday shoppers
IoT increases the transparency and accuracy of logistics by providing logistics operators with real-time information on the location and condition of every asset. Using this information, they can monitor and optimize the whole delivery path in the event of alterations or delays. IoT technologies also aid in the management of cold chains by identifying deviations from the approved shipping conditions.
4. Improving the customer experience on peak buying days
IoT solutions enhance the loading and unloading of items, which increases the selection accuracy as well as handling efficiency for retailers. A system based on the Internet of Things (IoT) may help track goods across shelves, improve inventory levels, and monitor retail activity to optimize product presentation and space use. Finally, monitoring storage conditions contributes to the preservation of perishable items so that customers always receive high-quality goods.
What Are the IoT Devices to Invest in?
There are several IoT technologies you can invest in to prepare for the holiday season, most of which will contribute to the timely delivery of high-quality goods to end customers. Here are the most important IoT devices that play a role in supply chains:
- GPS trackers: GPS trackers are an essential part of any IoT device ecosystem, and they are relatively inexpensive. While trackers were primarily designed to monitor location, they can now collect data on ambient conditions as well. This helps in delivering valuable items and temperature-sensitive products safely.
- IoT data analytics: All IoT devices and applications collect data that can be used for real-time and historical analysis. Based on this, you can predict future needs — for example, measuring future stock levels based on the timing of past orders.
- Radio Frequency Identification (RFID) tags: These tags can be embedded in or attached to virtually any supply chain component, from a moving shipment to a piece of equipment. RFID tags aid in asset tracking with real-time alerts upon delivery.
- IoT-enabled mobile apps: Mobile apps aggregate and centralize data from a variety of sources and IoT devices. Managers can access this information and execute actions on the go while keeping the customer informed. This also helps manage expectations during the holiday season!
- Enterprise Asset Management (EAM): EAM comprises a variety of tools and technologies used to manage heavy enterprise assets. EAM aids in fleet optimization and route planning so that you can make the maximum possible number of deliveries.
- Heating, ventilation, and air conditioning (HVAC) sensors: With HVAC sensors, any change from the ideal storage conditions is immediately picked up by an IoT system and sent to distributors. IoT helps cold chains solve a big problem, which saves money, goods, and people’s health.
- Augmented reality (AR) smart glasses: When IoT technology is combined with smart glasses, it makes picking faster and easier in warehouses. IoT sensors make a map of the goods in real-time, and smart glasses show the order-picking instructions and where an order’s specific items are placed in the warehouse.
- IoT robots: Some warehouses can benefit from using Autonomous Mobile Robots (AMR) and almost fully automating the warehouse. Using proximity sensors and cameras, AMR can detect obstacles and avoid them by navigating around them.
Examples of IoT in Supply Chains
“Santas” across supply chain majors worldwide use IoT to work their magic. Notable examples include Amazon, FedEx, Maersk, and Decathlon.
Amazon is the top online retailer in the world. Since 2012, it has been using robots in its warehouses to transport product shelves from one worker to the next, read barcodes, and transfer parcels. Currently, more than two hundred thousand robots operate in Amazon’s warehouses!
FedEx is a good example of how IoT data aids in timely delivery. It utilizes cloud services that are supplied data from the fleet, as well as traffic patterns, weather forecasts, as well as other sources, to map the most effective routes for commodities being supplied through its network. This cloud-based tool enhances the precision of decision-making, the accuracy of delivery projections, and the speed of risk reduction.
The next IoT supply chain example is Maersk, one of the largest shipping businesses in the world. With its operations sending fresh food to 343 ports in 121 countries, its supply chain is very extensive and critical to business continuity. To address this issue, the Danish corporation worked with Ericsson in 2012 to provide real-time fleet monitoring using Ericsson’s mobile as well as satellite communications technologies. Since then, the relationship has evolved to include cargo care, safety, and efficiency.
Finally, track-and-trace has become the most prevalent type of IoT in the distribution chain, and a large number of businesses are reaping substantial benefits from using this technology. This is shown by Decathlon, a sports goods store that operates 850 shops in 22 countries. It uses RFID at over 400 of its shops and intends to use RFID tagging on millions of its items worldwide.
Holiday season is when supply chains really come into their own and “wow” the global consumer market with reliable delivery of time-sensitive goods. IoT plays an important part in working this magic since the Internet of Things (IoT) is a transformative force for logistics.