The internet of things (IoT), artificial intelligence (AI), and blockchain are having a media moment, especially in the context of the supply chain. For instance, IDC predictsone-third of all manufacturing supply chains will be using analytics-driven cognitive capabilities – a version of AI – by the end of 2020; increasing cost efficiency by 10% and service performance by 5%.
Each of these technologies has the potential to shift global supply chains. Taken together, they have the power to completely revolutionize the process via the first truly ‘autonomous’ supply chain. To understand the combined impact, it’s important to examine each.
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Generally speaking, there are three IoT use cases in the supply chain - improving supply chain visibility, automating replenishment processes, and maximizing equipment uptime through predictive maintenance. Manufacturers are investing heavily in IoT and the industry is expected to spend almost $190 billion – with a B – on IoT solutions in 2018.
So how do IoT devices and services help monitor a ‘connected’ shipment? IoT sensors can measure the temperature of frozen or perishable goods as they move across a supply chain, measure the G-force shock levels as fragile goods are moved, and of course, track expensive goods, such as cars, via global positioning systems (GPS) as they are exported to different markets around the world. Monitoring these conditions can help ensure against spoilage, damage, and theft. One thing is for sure, IoT has breathed new life into RFID-based sensors. Billions of sensors have beenin introduced to the supply chain to monitor virtually every aspect of its operation.
With literally billions of new data inputs, companies now face a challenge deciphering the wealth of data to find the insights that help streamline and optimize supply chain operations. This is where big data analytics and, more specifically, AI come in.
Many companies today are just starting to explore the use of analytics, machine learning, and AI across their supply chain. Common use cases include optimizing inventory management systems and monitoring the performance of trading partner communities. A leading US retailer uses shelf-scanning robots to identify misplaced items, assess stock levels, and monitor pricing and demand on a 24/7. By freeing human employees of these routine picking tasks, the retailer can focus human employees on more valuable and complex tasks. Adoption of AI across the supply chain will bring the ability to improve forecasting; trigger and automate procurement processes; and be more responsive to customer demands.