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The Internet of Things (IoT) seems to be popping up in more conversations throughout the entire supply chain, and more businesses have turned towards IoT experts for guidance on how to take advantage of its benefits. The Internet radically changed how the world communicates. Simple activities and information became instantly available, which eventually led to the creation of the IoT. Ultimately, the IoT Supply Chain will enable greater accuracy and identification of potential issues throughout supply chain processes. In some cases, human intervention and input will be completely eliminated. Take a look at how the IoT supply chain is changing the landscape in terms of equipment functionality, shipping processes, invoicing and payments, and analysis of trends.

IoT and Machine Functionality

Most manufacturing processes heavily rely on the use of machinery.  Each robotic arm, conveyor belt, or moving item must contain a motor to power the machine’s movements. Therefore, simple factors, such as operating temperature, frequency, and hydraulic pressure, affect the efficiency of the respective machine. At its core, the IoT serves as a way of gathering data and information about a process, but applications of the IoT can detect potential problems within a machine before the machine falters. For example, a subtle change in hydraulic pressure may still permit the machine to operate. However, over the course of several months, this slight change in pressure could cause permanent damage to the machine, or it may cause additional problems for other aspects of the manufacturing process.

Additionally, the IoT may identify the exact cause of the problem and provide detailed instructions on how to make an appropriate repair. This could be in the form of signaling maintenance workers to check out the machine, or the IoT could upload new firmware into the system, which would correct the issue. If human maintenance crews are called, the IoT can provide specifications for what parts need to be replaced, the tools necessary for making the repair, and instructions if the maintenance workers have not had to previously replace this part. Similarly, the IoT can help ensure machines maintain functionality by stopping production when maintenance is needed. For example, a machine may need to have a specific part replaced every three months, but periods of increased demand could mean the manufacturing entity is placed at maximum capacity. The IoT could halt that machine’s processes until the appropriate preventative maintenance has been completed.



The IoT Supply Chain and Shipping Processes

Throughout the order fulfillment process, ample opportunities for problems, delays, and inefficiencies exist. In the IoT supply chain, a possibility is the ability to reroute truck driver instructions, make changes to automated delivery systems, or facilitate new ways of delivering products. For example, the IoT could be used to control automated delivery of products via unmanned aerial vehicles (UAV), or droves, in the future. By identifying inefficiencies and problems before they occur, the overall expense to the supply chain is reduced. Furthermore, the use of robotics in the order fulfillment, specifically the “item picking” processes, could help foster a faster purchase-to-delivery timeline. As a result, businesses will grow faster and expand their customer base.

Automated Data Transfers

When a customer places an order, the IoT supply chain will enable automated transmission of the information. This process has already been deployed in vending machines owned by Cantaloupe System in California. Cantaloupe System uses the IoT to help monitor the temperatures of their vending machines, detect thieves, and monitor inventory. In the future, the IoT may allow vending machines to recognize dropping inventory, place orders for more product, recognize delivery of products, and generate a payment to the respective supplier. If this simple example is expanded into the supply chain of other niche industries, the possibilities for how the IoT supply chain could impact everyday business becomes infinite. Hospitals could automatically place new orders for supplies before existing stocks become scare, which would improve patient outcomes and foster better nationwide health. The IoT already exists in many hospitals where electronic medical records identify problems in test results and generate a phone call to the respective nurse and physician for that patient. This leads back to our ordering scenario as the resulting medications administered may trigger an automated order to the drug manufacturer, acknowledgement of recipient of the order, pay for the items on delivery, and generate a resulting bill to the respective patients.

The IoT Supply Chain with Robotics & Other Industries

A study by ABI Research introduces the concept of the Internet of Robotic Things (IoRT), where intelligent devices can monitor events, fuse sensor data from a variety of sources, use local and distributed “intelligence” to determine a best course of action, and then act to control or manipulate objects in the physical world, and in some cases while physically moving through that world. It will also examine the many ways IoT technologies and robotic “devices” intersect to provide advanced robotic capabilities, along with novel applications, and by extension, new business, and investment opportunities.

What the next five years will bring in the Internet of Things is a little less sexy, but no less thought provoking. The supply chain will adore the IoT. Connected factories and plants will be more effective and productive than non-connected work zones and firms in all verticals will have the opportunity to help streamline processes with new functional cloud services.

SAP’s 2015 projections for the IoT supply chain have pointed to manufacturing, “Companies are integrating factory-floor operations with core business processes to optimize production with real-time updates from machine data and gain predictive analytics to automate parts and consumable ordering to maximize revenue,” said Michael Lynch, co-lead, Internet of Things, SAP.

Telecoms will also be significant. According to IDC, there are already nearly 200 billion computerized devices, with 20 billion of them wired and communicating via the Internet, and more than 50 billion sensors that track, monitor, or feed data to those connected things. Last but not least, retail will also be huge for the next IoT implementations within areas like inventory management, targeted sales promotions and the opportunity to talk to this new younger generation of users that we call ‘millennials’ or ‘digital natives’.

iot supply chain

Analysis of Trends and Recommendations

One of the greatest benefits of the IoT supply chain is its ability to rapidly collect and analyze data, although, analyzed data collection is useless by itself. The real benefit of data collection occurs when the resulting analysis makes a recommendation for how to improve the supply chain processes. Software and systems in the IoT supply chain is the driving force behind data analysis and recommendation, and it could be likened to the creation of AI. The system will automatically determine what is occurring, what trends are becoming prevalent, and how the respective company can improve the outcome. This may be involved in order fulfillment, shipping of merchandise to customers, tracking merchandise sent from consumers in reverse logistics processes, collecting debts, or enacting a change in the environmental manufacturing conditions to improve workflow.

The IoT has changed, is changing, and will continue to change the world, especially supply chain processes. With the benefits of IoT integration into existing processes becoming clearer, more businesses and organizations will work towards expanding today’s IoT supply chain capabilities. No one really knows what the future of the IoT holds, but it will be more efficient, effective, productive, sustainable, and commonly-used than it is today.

What are your thoughts on the forthcoming IoT supply chain and the applications of it? Let us know in the comments section below.

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