IoT in supply chain management can help you track and monitor goods, ensure better visibility into processes, and deal with vulnerabilities.

What are these vulnerabilities, and how can IoT supply chain solutions help solve them? Let’s discover together. 

Challenges you can mitigate with Internet of Things in supply chain

What is IoT in supply chain and what are the most significant benefits of IoT in supply chain?
IoT in supply chain can help you get an enhanced visibility into your supply chain. Supply chains that have a higher level of interconnectivity and codependence, the ones that are not transparent enough, are the most vulnerable. IoT sensors help address this issue, providing visibility into all of your assets. So, armed with IoT in supply chain management, you can optimize performance and eliminate bottlenecks. 

McKinsey names five key vulnerabilities in supply chains. They are:

  • planning&supplier networks; 
  • transportation&logistics systems; 
  • financial resiliency; 
  • the complexity of a product; 
  • maturity of an organization. 

These vulnerabilities need to be addressed before any exposure (an unforeseen event disrupting a supply chain) occurs. There are four key factors that can result in supply chain disruptions: 

  1. force-majeure situations (e.g., natural disasters); 
  2. macropolitical (economic shocks);
  3. malicious activities (cyberattacks);
  4. counterparties (fragile suppliers). 

The pandemic has revealed many gaps in global supply chain management. A lot of companies have been influenced by changing demand forecasts, commodity volatility, as well as supplier-specific issues because of the COVID-crisis.  

But how can all these challenges be solved by the Internet of Things and supply chain management? IoT sensors allocated to your assets gather data that can be turned into valuable insights. Using this information, you can save fuel, optimize routes, and even offer a better price to your clients.

Now, let’s view the solutions for supply chain management using IoT in more detail. 

Application of Internet of Things in supply chain management

In this section, we will take a closer look at some of IoT use cases in supply chain. We will primarily focus on predictive analytics, supply chain network mapping, as well as inventory and warehouse management. 

IoT in supply chain: value

1. Predictive analytics 

Predictive analytics powered by IoT in supply chain management is widely used by businesses across the globe.

Condition monitoring in real-time, enabled by IoT devices, allows supply chain businesses to be more agile. For example, with the help of IoT, it is possible to track the equipment state, prevent interruption, detect inefficiencies, as well as predict and address risks. 

Use of IoT in supply chain: N-iX case study

Our client is a Global Fortune 100 technology company headquartered in Germany. This business operates through a network of 440+ subsidiaries and entities in more than 60 countries across the globe.

This company needed to enhance its internal platform that manages the logistics between different warehouses. The platform was used by warehouse staff to allocate goods effectively. However, after several months of use, the platform turned out to be not efficient enough thus needed redesigning. 

The main component of this project is the Computer Vision (CV) solution that allows contactless tracking of goods with optic IoT sensors. Our client had CV algorithms written by another vendor, which were ineffective. So, a top-notch CV expert from the client's dedicated development team started running the CV workstream. 

The modernized and more scalable logistics platform will significantly enhance the effectiveness of warehouses in 60+ countries, reducing operational overhead and warehouse downtime.

IoT in supply chain management

2. Supply chain network mapping 

With the help of IoT in supply chain, you will be able to trace the entire supply chain, monitor the production units, routes, etc. Such an approach will help to:

  • Spot routes that have bottlenecks that result in delays; 
  • Track how your warehouses perform with the help of metrics such as shelf time of goods, demand within 1-2 km;
  • Gain a deeper understanding of your inventory (spare parts, parts in transit, after-sales stock, finished goods);
  • Identify the demand patterns for different products at certain periods of time and respond to the buying behavior using metrics like order type, density, frequency, the number of returns, etc. 

3. Inventory management

Storing and maintaining inventory in good condition is expensive. So supply chain experts have to approach inventory planning very thoroughly as it influences the company’s cash flow and profit margins directly. Inventory management is one of the most common IoT use cases in the supply chain. IoT in supply chain can help solve the problem of under- or over-stocking. Based on the data sourced by IoT devices, you can predict the growth of demand. So, you can prepare to fill your stores in advance as well as prevent excesses of goods or important parts for manufacturing.  

4. Warehouse management

In warehouses, IoT is used to track the arrival of packages and change their delivery statuses. Cameras scan barcodes and  package labels, and all the necessary information goes directly into the system.  

So, supply chain management using IoT proves to be effective. But how to implement it successfully if you lack expertise in the field? One of the most common solutions is to find a trustworthy technology partner. Let’s take a look at some critical steps you should take to partner with one. 

How to choose a vendor to implement Internet of Things and supply chain?

There are several aspects worth considering when you are selecting a vendor to experience th benefits of IoT in supply chain:

  1. Set clear business goals and identify selection criteria (the required expertise, company size, approximate budget, etc.);
  2. Select an outsourcing region, country, or city;
  3. Explore the local IT market and make a list of potential partners;
  4. Choose a vendor with previous experience in implementing IoT in the supply chain. Review the vendor’s portfolio of IoT case studies in the supply chain;
  5. A vendor you choose should also have long-standing tech expertise in AI, ML, big data, cloud, data science, etc.

Take a look at a more detailed guide on how to select the best offshore outsourcing company.

Why embrace IoT and supply chain management with N-iX?

  1. N-iX is a global software development service company with offices and development centres across Europe and in the USA.
  2. The company boasts a pool of 2,200+ specialists that have experience working with business cases of different sizes and complexity;
  3. We partner with Fortune 500 companies and help them make the most of IoT supply chain management. We have proven experience in hardware, firmware, IoT system development, and IoT-powered analytics. 
  4. We are an AWS Select Consulting Partner, a Microsoft gold certified partner, a Google Cloud Platform Partner;
  5. N-iX complies with PCI DSS, ISO 9001, ISO 27001, GDPR, and other international standards that are critical for Infosecurity.

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