Video doorbells, smart thermostats, virtual assistants like Alexa and Google Home are just a few examples of how the Internet of Things (IoT) has impacted consumers’ lives. As logistics companies and businesses leverage this technology, the possibilities seem practically endless, with DHL and Cisco estimating an impact of more than $1.9 trillion in the supply chain and logistics sector.

In this next installment in our Emerging Technology series, we’ll take a look at IoT technology, specifically how its tracking and monitoring capabilities are being leveraged within the supply chain. By understanding how other companies are utilizing this technology within cutting-edge applications, we hope you’ll get some inspiration of your own for creating new efficiencies and more transparency within your own logistics operations.

What Is IoT—Exactly?

IoT, the Internet of Things, refers to any physical device that can connect to the Internet to share its data. These devices collect and disperse information without the intervention of a human being. For example, an IoT device could allow a vineyard to monitor a temperature-sensitive bottle of wine all the way to a dealer or a buyer, ensuring that it’s never exposed to extreme temperatures that might ruin the quality of the wine.

In addition to temperature, IoT devices can also measure many aspects of their environment, including light exposure, humidity, location, movement, and speed, among others. Rolls-Royce uses IoT technology to monitor the performance of its aircraft engines in order to reduce maintenance problems and increase fuel efficiency. One specific application involves gathering and analyzing data from fuel pumps in order to alert when a pump may need to be replaced sooner than expected.

When it comes to supply chain applications, IoT technology offers expanded capacity for tracking and monitoring. Although tracking isn’t a new strategy to supply chain management by any means, IoT technology offers two advantages over, for example, barcode scanning:

  1. Additional data, such as environmental conditions or up-to-the-minute location tracking.
  2. Greater possibility for automation, both in terms of the collection of data as well as potential automation for triggering of future events.

To give you a better sense of exactly how IoT technology might continue to impact supply chain management, let’s take a closer look at the benefits it has to offer.

#1: Real-Time Location, Direction and Speed Tracking

Although we mentioned IoT tech’s location-tracking capability in the previous section, there are a couple of extended applications for this particular benefit. Unlike, say, a barcode tracking system, an IoT GPS device can alert you immediately when a particular item is headed in the wrong direction. As a result, you can spot misdirected shipments much more quickly and reroute them ASAP, nipping routing and delivery problems in the bud early.

Additionally, because IoT devices can deliver additional data, they can help create more accuracy and predictability. As opposed to, for example, a tracking system that only reports in once a day, up-to-the minute location, direction and speed info can mean more accurate delivery forecasting around raw materials and finished products alike, creating more predictability along the supply chain. This can help ensure that, for example, warehouses are staffed and ready for deliveries and manufacturing operations are prepped ready to use their raw materials when they arrive. Volvo currently uses IoT technology in this manner, monitoring movement of car parts and vehicle delivery to their suppliers.

#2: Constant Environmental Condition Monitoring

Several kinds of goods—such as food, alcohol and chemicals—require a specific set of conditions to maintain their integrity. IoT sensors that monitor things like temperature, pressure, humidity, light intensity and other factors can offer benefits to all the stakeholders in a supply chain:

  • Sellers can feel confident that their goods will arrive in the same condition as when they left the warehouse.
  • Logistics companies can prove careful handling of their shipments.
  • Buyers can receive their goods with confidence that their items weren’t compromised in transit.
  • Additionally, if there’s a problem, the sensors can prove where that problem did—or did not—occur.

Maersk’s Remote Container Management (RCM) program is currently using IoT technology to monitor conditions inside its reefer containers. Additionally, through a simple online portal, shippers can access this real-time data on their containers, as well as current location data, which is also tracked by IoT technology.

#3: New Efficiencies Within the Warehouse Setting

When it comes to warehouse operations, IoT technology offers a few applications for creating productivity increases.

First and foremost, location tracking devices can assist with finding items in a warehouse, as well as picking orders for fulfillment. An IoT tracking device can send workers directly to the items they’re looking for, making them easier to locate, even if they’re incorrectly shelved. This same technology can also send automated vehicles straight to the item they need to find without requiring human assistance, freeing up workers to do other, more complex tasks.

Additionally, because they can collect a significant amount of different types of data, IoT technology can offer warehouse managers insights into additional ways to increase efficiencies into how they manage their labor and resources.

#4: Offers the Potential for Overall Operational Efficiencies

By setting up IoT devices within a larger system, companies can also eliminate some tasks that may have been manual in the past.

For example, if your supply chain managers were logging data manually into a spreadsheet or database, your IoT devices could automatically report that information without human intervention.

Additionally, if you leverage that data within your business processes, you could also create automation that establishes new efficiencies. For example, if an IoT device reports the arrival of a shipment of raw goods, it could automatically trigger a notification to accounting to generate payment for that shipment.

That being said, despite all of these benefits, IoT technology does come with a few challenges to be aware of.

Challenge #1: Start-Up Costs

An investment in IoT technology is just that—an investment. In addition to purchasing the actual devices and the software to collect and aggregate the data, you’ll also need to train your staff. And if you plan to do any kind of customization to your IoT platform, that will also require the help of a trained professional. So while the benefits are notable, the initial investment has deterred some companies from going all in.

Challenge #2: Data Storage—and Analysis

While the possibility for collecting all kinds of data from IoT devices is one of the exciting benefits of this technology, it also comes with two challenges: 1) storing and processing that data, which can require significant hardware and 2) analyzing all that data in a way that’s meaningful. It’s easy to get overwhelmed by the sheer amount of data that these devices collect—and to pick out the actionable information that can be used to make effective decisions. After adding IoT technology to a company’s operations, the supply chain managers will also have to handle all the IoT data generated—both physically and intellectually—which can be a lot to juggle.

Challenge #3: Security Threats

Devices connected to the Internet are, by their nature, more vulnerable to attacks. If you do decide to go big on IoT technology at your company, make sure that you have someone who can help you analyze potential threats, safeguard against them and respond in the event of a worst-case scenario.

Keeping Abreast of Emerging Technology

As IoT devices and technology continues to advance, the possibilities only continue to grow for companies who want to manage and optimize their supply chains. With the right investment—and the right focus on the data they need to keep their objectives moving forward—many different types of companies can leverage IoT tech to amp up their tracking and monitoring capabilities, creating in greater efficiencies for all parties involved.




Want to talk with our experts further about leveraging technology to manage and optimize your supply chain? Reach out for a complimentary consultation. We’d be happy to help you uncover new efficiencies to make sure your supply chain performs at its peak.

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