Traditional supply chains face challenges at every step. Deliveries are vulnerable to delays, theft and spoilage, and issues are not always apparent until goods arrive at their destination (or fail to). With entire shipments routinely at stake, the logistics industry has long needed a smart, modern solution.
The Internet of Things (IoT) could hold the answer. By providing essential visibility of goods in transit, IoT provides a wealth of actionable data. Implemented properly, IoT enables agility and streamlines operations, helping companies maintain competitiveness in a fast-moving world.
But despite its capabilities and the fact that we've been talking about this technology for some time, the benefits of IoT are not always understood, and mainstream adoption in the supply chain has not yet been achieved. How — and why — should organizations start implementing IoT to their advantage?
A Closer Look At IoT
The Internet of Things refers to a network of objects that transfer data without human interaction. In some cases, devices are self-contained. In others, a network of tiny sensors and computer chips communicate with a central "beacon" device that processes the data.
In logistics, sensors are typically affixed to packaging or embedded within end products to relay information about the physical condition of the cargo. It's possible to track the movement, light levels or temperature of an entire shipment or an individual product. Devices can now even be customized; if your goods are sensitive to tilting or jolts, this can also be monitored.
The key benefit is that having instant data about a shipment's physical condition creates real-time visibility across a supply chain and opportunity for optimization.
IoT In Action
Imagine being able to respond to compromised cargo before it even arrives at its destination. Diverting and replacing a shipment of food that has traveled at an unsafe temperature. Warning recipients that sensitive lab equipment has been tilted during transit. Contacting insurance companies when high-value items have been prematurely exposed to light, suggesting pilferage.
The point of loss, damage or delay can be isolated. Bottlenecks are identified. Status updates are incredibly accurate. Over time, the data reveal patterns that aid predictive analysis, contingency planning and the optimization of transit speed, cost and security. Supply chains for food, pharmaceuticals and high-value goods have been early adopters of IoT technology, but it's clear to see how any industry can use it to streamline its logistics.
In combination with 5G networks and encrypted blockchain databases, this information is immediately available to every link in the supply chain. Transparency fosters trust. It creates efficiencies when ETAs are precise and enables effective remedial action when a shipment goes awry.
Outside of transit, IoT can connect with robotic process automation (RPA) to eliminate manual inventory processes. Even admin is faster and more accurate, as IoT networks can automate reporting and invoicing.
The Future Of IoT
Before the implementation of IoT can become widespread, there are some remaining challenges that must be addressed. Privacy is a key concern, especially for end consumers. Internet access is an ongoing vulnerability in the modern world, and security must start with standardized safeguards to reassure the deactivation of tracking devices upon the delivery of goods.
Cost is another factor. For logistics IoT devices, parent beacons can often be rented and reused. The costs can fluctuate considerably, but it is possible to find them in the vicinity of $20 to $50 a month, depending on their functionality. As with all things tech, costs will continue to decline as the technology goes into wider use and new players introduce competing products at lower prices.
However, this leads to another barrier — sustainability. What happens to a tracking system once goods have been delivered? Sensors and chips will create huge volumes of electronic waste unless a low-cost, low-effort method of returning, recycling or reusing them is designed.
Finally, to fully harness the benefits of IoT, it has to be integrated with other digital technology across the supply chain. There is no point in capturing information if you have no intention to react. Blockchain, IoT, RPA and data science (BIRD technologies) are essential for synchronizing strategy and formulating collaborative responses to big data.
IoT represents a revolution in the way goods are handled. Within the next few years, we can expect a new standard when it comes to tracking the exact location and condition of products. Now is the time for understanding how these systems can be most effectively integrated into your own processes so that your goods — and business — aren't left behind.
Syndicated content featured from Forbes.