Industrial revolution opened the doors to large scale operational changes and transformation in industries back in the day. Now with fourth industrial revolutions, I4.0, the transformation is not just limited to structural changes but it also involves leveraging technologies like Internet of Things (IoT), Automatic Identification and Data Capture (AIDC), Artificial Intelligence (AI), Machine Learning (ML) and tools like deep learning, and predictive analytics.
Supply chain management is a critical aspect of many businesses governing the day-to-day business operations. Businesses such as retail, logistics, and e-commerce are actively looking for ways to integrate technological solutions to strengthen their supply chain and eliminate bottlenecks. A robust supply chain results in timely delivery of consignments, enhances customer experience and fulfillment, bringing in new customers to the fore.
The combination of IoT (Internet of Things) and supply chain management is transforming the way companies manage their operations and deliver products to customers. IoT technology allows for the collection of real-time data from various points in the supply chain, which can be used to optimize processes, reduce costs, and improve efficiency.
Let’s explore the latest trends in IoT and supply chain management but let’s define IoT first.
What is IoT?
IoT is short for Internet of Things. The concept of IoT, though evolved from M2M (machine to machine) communication, and the famous Carnegie Mellon University coke vending machine is a testament to that but at present IoT has become the internet of everything and M2M is a subset of that. The word IoT was coined by Auto-ID center cofounder Kevin Ashton in 1999.
IoT essentially means devices that are capable of communicating with each other over the internet. For example, smartphones, smart bulbs, FasTAG, and smartcards etc.
1. Increased use of RFID (Radio Frequency Identification)
RFID (Radio Frequency Identification) is a technology that is widely used in supply chain management to track products, materials, and assets. The technology uses a small RFID tag or label that contains a unique identifier and is attached to the item being tracked. RFID readers can then be used to collect data on the location and movements of these objects. With the increasing use of IoT, RFID is becoming even more prevalent. IoT-enabled RFID tags can collect and transmit data in real-time, providing visibility into the supply chain and enabling real-time decision making.
2. Predictive analytics strengthening future outlook
Predictive analytics is an AI tool that uses the large amount of data generated on a daily basis in a business along with statistical algorithms, and machine learning to identify the possibility of future outcomes based on such historical data.
In supply chain management, predictive analytics can be used to forecast demand, optimize inventory levels, and identify potential disruptions in the supply chain. IoT technology can provide the real-time data needed for accurate predictive analytics.
3. Blockchain technology for transparency and traceability
Blockchain is a shared, immutable digital ledger which enables secure and explicit record-keeping, recording transactions in a business network.
When it comes to supply chain management, blockchain technology can be used to improve transparency and traceability by recording every stage of the supply chain.
IoT devices can be used to collect data on the movement of goods, which can then be recorded on a blockchain enabling manufacturers and retailers to track their products from origin to destination, providing greater visibility and accountability.
4. Autonomous vehicles for efficient supply chain
Autonomous vehicles, including drones and self-driving trucks, are becoming increasingly common in the supply chain. These vehicles can be used to transport goods more efficiently and safely, reducing costs and increasing productivity.
IoT technology can be used to provide real-time data on the location and condition of the goods being transported, allowing for more efficient and effective management of the supply chain.
5. Digital twins for simulation
Simulation is one of the crucial technological components that is now gaining attention in businesses such as supply chain and manufacturing. A digital twin is a replica of a physical object or system, created digitally for simulation purposes.
In supply chain management, digital twins can be used to simulate the movement of goods through the supply chain, identify potential bottlenecks and optimize processes. IoT technology can be used to gather data on the physical system, which can then be used for perfecting the same, enabling a higher degree of optimization and growth.
Use of IoT in supply chain management has the potential to digitize and automate the entire operation, removing bottlenecks and enhancing the overall productivity. In Industry 4.0, supply chain plays a significant role in day-to-day business operations, enabling a great degree of process optimization and value creation for businesses.
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