Embedded sensor technologies have been used in varying degrees in supply chains for well over a decade, but the Internet of Things (IoT) today is more realistic in the supply chain than ever before, thanks to a convergence of numerous sensor types extending across all aspects of transportation systems.
The data that companies need to streamline their supply chain and logistics operations is pouring in from a myriad of touch points and technologies. Yet, having the technology to collect the necessary data is only a best first step. The tools to accurately, efficiently, and inexpensively aggregate and leverage that data for improved supply chain visibility and tracking are not yet in place.
Applied correctly, the real-time tracking of data from sensors such as RFID enables shippers and carriers to dynamically track orders and update routes in real time based on unforeseen exceptions or variables such as construction projects, accidents, or even weather delays. This would help address the pressing need to manage exceptions and ensure compliance with stated delivery windows. The IoT ultimately will enable companies and their staff on the ground to better access the information they need in order to prepare for and react to disruptions in real time.
To effectively embrace the IoT, successful companies will need to not only have the data streams from on-board vehicle sensors, tagged pallets and package barcodes, but also the capability to direct that information in a way that enables them to manage by exception in real time, while also viewing the data in aggregate across weeks and months to identify and prioritize solvable inefficiencies.
"By 2020, component costs will have come down to the point that connectivity will become a standard feature, even for processors costing less than $1. This opens up the possibility of connecting just about anything," according to Gartner's research director Peter Middleton.
Looking ahead, as costs come down and technology improves, the industry is certain to see the IoT embedded in nearly every item that moves through the supply chain on a daily basis -- assets like pallets, boxes, trailers, etc. are likely to be among the items that will use same technology as consumer wearables do today -- making it easier to keep tabs on products from end to end. Companies will want to take all of the data from the technologies they have deployed to optimize the overall supply chain and identify weak links in the supply chain that can be improved.
This massive growth represents an opportunity for the entire supply chain and logistics industry, but it won't be enough for single companies or parts of the supply chain to adopt the IoT. True, overarching supply chain visibility will only be a reality when the industry tracks the constant movement of goods -- from downstream to the last mile.