IoT in Supply Chain Management

IoT in Supply Chain Management

If we were to fast-forward to the end of this year and ask you to pick a word for 2015, what would it be?

Internet of Things (IoT) would be our pick. From smart homes to smart grid and from health care assistant to energy savings, IoT is influencing our daily life in a fast yet subtle way. As technology matures, supply chain professionals find that the potential impact of IoT on the industry is so profound that everyone needs to get ready for the changes in the coming years.

For a long time, one of the key challenges for effective supply chain management is its complexity. Multiple tiers of suppliers, manufactures, service providers, distributors, retailers and customers made it extremely hard for every party to effectively communicate and execute on the same level. If multiple regions, different languages and intricate custom regulations are taken into consideration, which is often true for global companies, the whole system will just get more complicated. This is where IoT can make a big impact. By incorporating the IoT network into the supply chain, we can harmoniously connect people, processes, data and things via devices and sensors . For example, if a shipment of incoming material happens to arrive late to a manufacture, the intelligent network empowered by sensors will notify customers immediately and make the necessary adjustments to avoid a line down situation. Today, in most cases, this process is carried out by enormous unsynchronized emails and phone calls between relevant parties, wasting valuable time and sometimes creating misunderstanding. The end-to-end visibility will help customers balance supply and demand and optimize inventory level and improve future planning and forecast, which will directly result in cost savings. Cisco has already started a pilot program in its Malaysia site, beginning this May, to see how the IoT network will benefit them.

Another more specific area where IoT will greatly impact the supply chain is in logistic services. We have all experienced the anxiety when there is no status available for a shipment that is crucial for the production line and then we have to wait in dark with our fingers crossed hoping that it will arrive in time. Well, this is about to change with IoT. With the help of the cloud-based GPS and Radio Frequency identification (RFID) , an IoT-ed logistic network will bring a new level of connectivity to the supply chain industry. By connecting the different players and many moving parts within the logistics ecosystem, the network can tie those dots together and provide shipment whereabouts and other specifications on real-time basis. This information will allow supply chain professionals to monitor important details and if necessary make adjustments in a timely manner, such as switching the receiving sites due to a change of production plan or altering the route of shipment to avoid a traffic jam

The ongoing digital transformation of supply chain brings challenges and opportunities for the industry. Some questions supply chain professionals facing are making sense of massive amount of data generated by IoT, streamlining internal business processes to fit into the digital network and adapting to the new business model. On the other hand, for those with the resources to implement IoT in their business, it’s a great opportunity to gain more market share and provide better service to customers.

At Advanced MP Technology, our already implemented all-in-one ERP and Warehouse Management System is highly customizable to fit into this digital transformation. Certified with ISO 9001 and IDEA-QMS-9090 Quality Management System Standard, we are fully equipped to supply quality product in a “Faster, Better, Cheaper” fashion within the IoT-ed supply chain.