The term internet of things (IoT) was introduced by Kevin Ashton, a radio frequency identification expert, in 2009. He defined IoT as a network of objects fitted with electronic devices that send and receive data through software sensors and internet connectivity.
Over time IoT has continued to influence every aspect of human life and activity from businesses, homes, transport, research, and so much more.
In supply chain management, IoT technology has been instrumental in helping businesses serve customers better, reduce the cost of doing business, and improve the overall efficiency of the supply chain.
Here are some of the areas IoT is having an impact on supply chain management.
One aspect of supply chain management where IoT technology is having an impact is route optimization.
Route optimization refers to the process of planning the shortest, fastest, and cheapest route without compromising on efficiency. Route optimization is not a one-time thing. It involves using data collected over time to help get the most out of a delivery route.
Incorporating IoT technology in your fleet can help collect data in real-time, which can be used alongside your business’s route planner to assess the execution and efficiency of the planned routes.
Tracking Shipped Assets
Many leading logistics companies attach IoT sensors to assets in transit and delivery vehicles when transporting high-value goods. This ensures that the fleet manager can simultaneously track the shipping vehicle and the assets.
While tracking the vehicle can help give insight on order delivery times, IoT sensors on assets provide another layer of certainty of order delivery and minimize the chances of delivery address mix-up.
Reduce The Cost of Maintenance and Fuel
To some extent, cutting down fuel connects to route optimization. One factor consideration in route optimization is a route’s fuel efficiency. However, fuel consumption is not only
dependent on the route.
Driver habits such as overspeeding, rapid acceleration, and sudden braking result in higher fuel consumption and the cost of maintenance.
When incorporated into your fleet, IoT technology can help the route manager get real-time information on driving habits that increase fuel consumption or the chances of an accident.
With this information, the manager can design ways of addressing poor driving habits to ensure compliance with organizational guidelines among drivers. IoT sensors can also help detect engine performance, brake quality, oil changes, tire quality which can help you arrest problems before they get out of hand, lowering the cost of maintenance.
Locate Goods in A Warehouse
If you have worked in a busy warehouse, you may know how frustrating it can be to locate a specific item. Many industry players are adopting IoT technology in warehousing to solve the problem, which has seen an increased demand for IoT in warehousing.
Irrespective of the size and the level of activity in a warehouse, locating an asset using IoT is pretty easy; all it takes is looking it up in your connected devices.
Additionally, IoT technology eliminates the need for manual inventory taking. The technology updates the inventory as assets leave the warehouse, helping warehouse managers keep track of their stock.
IoT has significantly impacted supply chain management and is expected to have much more influence as the technology becomes cheaper and accessible. The four areas mentioned above are excellent examples of how IoT technology impacts supply chain management, but the effect is not limited to the four areas mentioned.