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15 Improvements by the Deployment of The Internet of Things in the Supply Chain

the internet of things in the supply chain

The list of relevant applications of the Internet of Things (IoT) era technology across multiple industries and market segments continues to grow. Current and future applications have the potential to provide new methods of value creation and sources of revenue streams for companies in the digital age. For supply chains, this advancing technology enables the building of a framework in which rapid responses and solutions in an increasingly intricate network can be designed and implemented quickly and easily. This advancement is based on the potential to integrate relevant data at any point in the value chain, define inter-dependencies from the data almost instantaneously, and utilize advanced analytics to develop highly targeted solutions.

11 Improvements by the Deployment of the Internet of Things in the Supply Chain

Thus, in the global supply chain, exploiting the opportunity presented by the Internet of Things technology can improve:

  1. revenue growth,
  2. asset utilization,
  3. waste reduction,
  4. customer service,
  5. profitability,
  6. sustainability,
  7. security,
  8. risk mitigation,
  9. working capital deployment,
  10. agility and
  11. equipment uptime.

For many businesses, this means partnering with a third-party logistics service provider (3PL) such as Flash Global that has already integrated evolving technology into its holistic, comprehensive logistics services.

Cerasis embraces IoT-type technology, such as integration, as an interconnected, intelligent network that combines together many tiers of contract manufacturers, suppliers, service providers, customers, and distributors, regardless of their geographical location. Data created, processed and analyzed by strategically distributed devices and systems in the chain significantly reduces visibility gaps and introduces tremendous flexibility into the production chain. Deployment of the Internet of Things technology within the chain has significant potential to drive advancement in:

  • Evolving solutions support to simulation.
  • Predictive capabilities and modeling to reduce costs.
  • Improve service levels.
  • Improve quality levels in real-time.

Smart devices and systems with embedded intelligence can make critical decisions and adjustments in response to complex scenarios, and this in turn enables managers to focus on improving global capabilities through better orchestration within the network. Currently, business processes that use static data structures and analysis will need to adapt in order to maintain the competitive edge and pursue new value creation. The Internet of Things devices and systems have the ability for continuous monitoring that can sense constraints and produce intelligent responses almost instantly with the guidance of an intelligent network or autonomous system. This leads to greater opportunities for cross-enterprise and cross-industry process innovation and optimization, which contemporaneously drives cost containment while decreasing time to market.

Ability for Decision Making in the Internet of Things Supply Chain

The decision-making capacity of smart devices within an IoT-enabled network also affects the overall supply chain structure. Traditional supply chain tasks in procurement, planning, logistics and supplier management would be streamlined by intelligent, data-driven systems in a collaborative multi-enterprise environment. While logistics managers may need to acquire an enhanced skill set, their primary functions would be focused on designing capability and network optimization, inter-enterprise collaboration, disruption and risk mitigation, and supply chain orchestration in an effort to exploit competitive advantages and differentiation.

Having the capability to track raw or finished materials and the associated features such as count, type and geographical data with the Internet of Things technology through an entire life cycle from a tier-n supplier to the final consumer will have a positive influence on inventory management, sourcing strategies and logistics costs. For instance, when a supplier cannot deliver on time, that event could trigger an automatic search for an alternate supplier within the interconnected intelligent system. This would ensure no disruption in the production schedule, customer service or revenue stream.

Another example might be a situation in which production constraints might delay delivery of raw materials by 3 days to a proprietary supplier. The IoT-enabled system would sense the upcoming delay and make adjustments to the material delivery schedule to include other suppliers. Those suppliers would have the opportunity to route the raw material to other clients, thus enhancing the revenue stream and working capital for the network. The production site would obtain automatic data regarding the delay in raw material, and it could adjust production and machine schedules for optimization. Raw material and fixed asset utilization would be enhanced as asset demand and availability are matched more consistently. Moreover, supply chain risk mitigation would improve through the continuous monitoring of supply status, and disruptions would receive a response in real time.

In addition, the capability to sense demand for finished product by using embedded intelligent devices will enable the supply chain to automatically match available finished product across multiple distribution facilities with sales channels indicating current demand. If no inventory is currently available, the system can check raw material availability and manufacturing capacity, leading it to send an automatic production trigger to the appropriate site. This continuous, seamless matching of supply and demand will positively affect profitability, revenue, and customer service while concurrently optimizing the inventory of finished goods. Moreover, areas of the supply chain such as spare parts and maintenance would see significant streamlining and improvements, and real-time monitoring of machines and equipment would drive predictive maintenance schedules and minimize machine downtimes.

Thus, as standards and technology advance, the Internet of Things devices and systems provide a critical competitive edge through linking actuators, sensors, embedded intelligence, advanced analytics, systems and people. Supply chains that embrace this technology will differentiate themselves easily and quickly from the rest of the crowd.

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Adam Robinson
Adam Robinson oversees the overall marketing strategy for Cerasis including website development, social media and content marketing, trade show marketing, email campaigns, and webinar marketing. Mr. Robinson works with the business development department to create messaging that attracts the right decision makers, gaining inbound leads and increasing brand awareness all while shortening sales cycles, the time it takes to gain sales appointments and set proper sales and execution expectations.
Adam Robinson
Adam Robinson

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