How the Internet of Things Will Streamline the Supply Chain
of Things (IoT) is a key technology for business. With the number of
devices connecting to the Internet growing from a few thousand in the 1980s to
an expected 25 billion by 2020, organizations need to prepare for the
inevitable, and the supply chain is no exception.
there are 4.9 billion devices connected to the Internet, which equates to one
device per person for over half of the world's population. The number of
objects that are online and communicating has grown dramatically. For example:
2012, the UK witnessed a "Twitter Dress" displaying content from the
hashtag "#tweetthedress" become the first piece of clothing to
connect to the Internet.
2013, smart devices were performing actions triggered by "iBeacons"
2015, Apple Watches are tracking health data, storing event tickets and
In addition to being used for consumer devices the IoT is capable of
positively impacting all aspects of the supply chain. Shipments can be traced
through the delivery process, allowing manufacturers to initialize computer
installation processes during transit, which will speed up implementations.
When stock is low, the IoT will be proactive and will place orders for restock
various items automatically, and equipment monitoring can also be used to
predict when equipment needs service and maintenance.
Businesses in many
industries can adopt IoT technologies to better track assets, control inventory
and limit inefficiencies. Shipments can be traced through the manufacturing and
transportation process in real-time, providing accurate delivery and improved
customer service. Using 'big data' and the IoT, organizations can proactively
replenish inventory based on exact physical data and forecasted demand that
combines many factors, maintaining efficiency while never losing a sale due to
out of stock merchandise. Embedded sensors can monitor finished products or
equipment and predict, alert and even book service and maintenance.
Visibility into the
supply chain will no longer be limited to simply when items will be shipped or
delivered, but will expand to include exact time of arrival, temperature control
and quality control information. All this data will be automatically recorded
in the system, adding significant value by documenting each step of the supply
chain process. Strengthened by advanced technologies, sensors and data
generated by the IoT, businesses will benefit from a strong informed supply
network that is able to predict, correct and even prevent problems before they
occur, keeping their supply chain running at optimal efficiency.
The IoT will impact
every stage of the supply chain. For example, product life cycle management
systems will expand to incorporate various product performance measurements;
Enterprise resource planning (ERP) systems will be able to monitor parts that
need replacing; and customer relationship management applications will
automatically notify customers of the need to replace the part before a fault
By integrating all
supply chain related systems, businesses can revolutionize the customer
experience and create a competitive edge. For example, a washing machine
manufacturer that equips its products with IoT sensors can create a scenario
where the washing machine automatically detects limescale build up before it
damages the engine. The machine notifies the ERP system and checks if a
replacement part is in stock. A technician then schedules a service call with
the customer and replaces the part before the washing machine breaks
utilizing IoT throughout the supply chain and integrating systems, companies
can increase their efficiency and revolutionize the customer experience.
Organizations that leverage IoT technology can take an important leap forward,
widen the gap between themselves and the competition, and can become market
Romeder is General Manager of Magic Software Europe