DS Supply Chain Blog

How to Prepare Your Supply Chain for the Internet of Things

Thanks to the cloud, there has never been a better time to be a manufacturer or distributor with a vision for rapid, profitable growth. Cloud technology puts powerful supply chain planning technology at your fingertips, with no major outlay for software licenses and extra hardware. And cloud technology removes the barriers to implementing sales and operations planning (S&OP) and integrated business planning (IBP) across your extended supply chain.

There’s more to this story. And it has to do with machines that talk to each other. This isn’t a science fiction story—it’s the current reality for many manufacturers and distributors.supply chain internet of things (IoT)

All across the supply chain—in factories, in distribution centers, on forklifts, and in package delivery—companies are quickly adopting the Internet of Things (IoT).

IoT is a growing phenomenon in which networked devices exchange information without the need for human intervention. Picture assembly line robots that talk to your ERP system. Delivery trucks that talk to your maintenance crew’s smartphones. Shipping containers that send updates to your supply chain planning system.

And all of this happening in ways that increase efficiency, reduce waste, and enhance your bottom line.

It’s not a matter of whether these things are possible—it’s now a matter of how soon you can implement them.

Why Supply Chain Executives Are Embracing IoT


There’s no doubt that today’s supply chain stakeholders are recognizing the importance of IoT to their future. Each year, SCM World surveys 1,000 top supply chain executives to gauge their opinions on promising new technologies. In 2014, 45% of respondees considered IoT to be “disruptive and important,” while 42% said it was “interesting but of unclear usefulness.” Just 13% said IoT was “irrelevant.” By 2015, those numbers had changed to 64%, 31%, and 5%, respectively.

I’d call that a massive shift of opinion in favor of IoT.

But what is it that’s changing the minds of these executives? What do they believe IoT has to offer them?

In a recent Inbound Logistics article, Udaya Shankar writes:

“ERP and supply chain management (SCM) have gone hand-in-hand for quite some time, but the IoT revolution will allow us to enhance those solutions by intelligently connecting people, processes, data, and things via devices and sensors. Think of it as SCM 2.0. This deeper intelligence can come to life in many different ways when it comes to supply chain data and intelligence – from automation of the manufacturing process to improved visibility within the warehouse.”

Shankar goes on to describe how supply chain stakeholders can use cloud-based GPS and Radio Frequency Identification (RFID) technologies to gather and share identity, location, and other tracking information during shipping.

Of course, this is only the beginning. According to Dwight B. Davis on CIO.com, IoT will become even more pervasive in the years to come:

“Supply chain ecosystems, and the processes that span them, will be among the biggest beneficiaries of cloud-powered IoT solutions. Sensors, controllers and other IoT-connected devices will reside on everything from individual products to crates and shipping containers. They will be embedded throughout factories and warehouses and will help track fleets of ships, trucks and other vehicles.”

Are There Robots on Your Horizon?


It’s probably not difficult for you to imagine how you might start incorporating IoT into your current supply chain. Many manufacturers and distributors begin by sticking simple, highly affordable tracking devices on shipping containers, or by equipping warehouse staff with wearable devices that streamline the task of scanning inventory.

What about your robots? If you haven’t begun using robots in your supply chain, chances are, you will soon.

Robotics are also being adopted in factories and in distribution centers. It won't be long before distribution centers are using robots for picking inventory. A recent article by the Association for Advancing Automation reports that robots still can’t grab items like humans can, but they probably will soon. Meanwhile, robots are already being used in distribution centers to reduce the distance humans have to walk to get products.

Meanwhile, DHL reports that the surge in online retail has created an often-overlooked challenge for retailers. Online orders actually require more labor because the items must be picked and packed individually, rather than being sent in bulk to a retail store. In the wake of this challenge, warehouses will surely explore ways to expand their use of robotics.

Robots present manufacturers and distributors with another opportunity to tap into the IoT to achieve greater efficiency and profitability. But that’s only possible if you connect your robots to the right kind of software.

According to IRMS:

“Robots do not fully operate on their own, so the need for seamless integration with a warehouse management system and other supply chain technologies is imperative. The advanced technology of cloud platforms allows for seamless integration between multiple enterprise-level systems allowing organizations to maximize their technology investments while creating the most efficient, automated supply chain possible.”

In other words: robots are only as good as the instructions we give them. When we connect them to a cloud-based software platform and stay in constant communication with them—without the need for human intervention—we can maximize their contribution to our bottom line.

Building a Cloud-Based Control Tower for Your Entire Supply Chain


As you consider the impact that IoT can have on your supply chain—and your whole business—there’s one more perspective that I think you’ll find especially valuable. Kevin O’Marah of SCM World writes:

“The centre of the IoT-enabled supply chain will eventually look like a great control tower where value judgements about money, credibility and accountability can be weighed with total visibility to what customers want, what supply can deliver and what’s really happening now.”

That’s quite a bold promise. And I take this as an imperative for supply chain executives to put the right kind of software at the center of their supply chain control towers.

This can’t just be yesterday’s on-premises software that’s only accessible by people who are logged onto your corporate network. It has to be cloud-based supply chain planning software that can easily talk to all the systems and sensors in your vast network—and can tailor this information to the needs of any stakeholder.

Are you ready to take a leap into the future of supply chain technology? Demand Solutions is already there—and we’re eager to help you make the transition. Drop me a line to discuss how you can get started.

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