As enterprises continue to reduce their business scope to core processes through third-party outsourcing, global supply chains continue to grow. This brings the need to track and control a large number of assets and processes. In order to keep up with this trend, enterprises are adopting supply chain management supported by the Internet of Things.
Almost every enterprise, regardless of its field, will operate as part of a larger business network. Even services, such as health care and educational institutions, form part of the supply chain. These supply chains may involve multiple people, facilities, assets and businesses that need to coordinate and manage the flow of goods and services from major production sites to final sales and consumption locations. The larger these supply chain networks are, the more difficult it is for owners to monitor and manage these processes. This difficulty is mainly due to the complexity of many variables when more people, processes and businesses join the chain. The introduction of the Internet of Things (IOT) will help enterprises overcome these challenges.
The supply chain management supported by the Internet of Things is becoming a feasible solution to the problems of supply chain management control and visibility, at the same time, it also adds more value and solves more problems.
The supply chain supported by the Internet of Things links producers (such as farms, mines, etc.) to end consumers (enterprises or individuals) through a network of smart devices. The network not only collects and transmits real-time information from one end to the other in the most elaborate form, but also enables the supply chain owner to control the activities at each stage. This will ensure that the supply chain can deliver the right amount of goods or information to the right people at the right time. The Internet of Things can add value to the supply chain as follows:
Tracking the movement of goods
Logistics is the key driver of the supply chain because it is responsible for transferring goods and resources from one end of the supply chain to the other. Logistics is usually provided by third-party service providers. Although the transport status of goods can be reported at fixed time and distance intervals, the expected arrival time of goods is usually misjudged, which may cause unnecessary trouble in the supply chain. In addition, perishable goods such as meat, milk and agricultural products must be transported under appropriate storage conditions, which means that the carriage must be kept at a specific temperature and humidity level.
With the Internet of Things (IOT) network, enterprises can monitor the maintenance conditions of goods in the transportation process. When these conditions reach the non-optimal level, the storage conditions can be changed remotely, or the Internet of Things can automatically adjust the temperature in the container according to the situation. The Internet of Things can also help protect goods in transit from theft and loss. Stakeholders can use GPS and other tracking methods to keep track of the location of the goods.
Monitoring Inventory
Modern supply chains always keep the best quantity of raw materials in their inventory to implement lean manufacturing operations. To do this, they need to maintain adequate supply to avoid depletion and shutdown of operations, while ensuring that there is no backlog of goods. This requires them to order supplementary raw materials according to various factors when their inventory reaches a certain level. Internet of Things sensors can be used to monitor the manufacturer's inventory and notify the relevant personnel when the quantity drops to a critical level. This enables manufacturers to order replenishments in a timely manner to ensure minimum cost, minimum waste and uninterrupted operation.
Maintenance equipment
Supply chains usually involve many devices, whether they are production tools (heavy machinery) or transport vehicles (trucks). These devices must always remain at the best health and performance levels to ensure business continuity. Any shutdown caused by equipment failure may trigger chain reaction, which affects the whole supply chain and may lead to serious financial losses. Internet of Things sensors can be used to continuously monitor manufacturing processes and equipment to monitor any anomalies. This allows maintenance personnel to check and fix any problems before they become serious. Timely maintenance not only helps prevent any unnecessary downtime, but also prevents serious and irreparable equipment damage, which may lead to huge future expenditures. Internet of Things sensors can also be installed on vehicles to track their performance and health. This can minimize delays in transportation and delivery of materials, components and finished products by triggering preventive maintenance when needed.
Assessment of needs
The Internet of Things has played an important role in the transformation of retail industry, and retail stores are the sales and distribution channels of supply chain. Internet of Things sensors can be installed in stores to track the number of different goods on the shelf. These sensors can be connected to other parts of the supply chain, including warehouses, distribution centers and manufacturers. When a product in a store is about to be sold out, sensors will monitor it and notify the nearest warehouse through the Internet of Things. When a warehouse has insufficient stock of certain goods, they can notify the manufacturer, which can trigger the Internet of Things equipment located there to communicate with the supplier, and so on. Therefore, the Internet of Things can automate the coordination of different parts of the supply chain to maximize overall productivity.
Supply Chain Supported by the Internet of Things: Benefits
In addition to providing industry-specific benefits, the supply chain supported by the Internet of Things also offers the following benefits:
Visibility
All other members of the supply chain can understand the processes and needs of other partners in real time. This enables all supply chain partners to synchronize their operations to achieve maximum efficiency.
Control
In addition to monitoring their own and partner processes, they can also automatically and instantaneously control process parameters to better respond to emergencies. Supply chains supported entirely by the Internet of Things can minimize waste of time, materials and money. In addition, the supply chain supported by the Internet of Things achieves perfect coordination among partners through continuous communication, visibility and control, which means that an appropriate amount of goods or resources can be provided at the right place and time to ensure maximum operational efficiency.
In order to cope with the increasingly complex supply chain, enterprises will need a variety of forms of digital technology, and the Internet of Things is just one of them. In addition to the Internet of Things, the application of artificial intelligence and block chain technology in supply chain management is also considered to bring revolutionary changes to the industry. However, any new technology introduced into the industry must be built on and integrated with the supply chain framework supported by the Internet of Things.
