Incorporating the Internet of Things (IoT) into supply chain management has become a game-changer, transforming the way businesses handle their operations and logistics. In fact, did you know that as of 2023, the IoT in the supply chain market size is at $12.4 billion?
IoT supply chain management technologies not only improve visibility and efficiency but also usher in an era of intelligent, data-driven decision-making. In this article, we'll delve into some prevalent challenges encountered in supply chain management and explore how IoT has navigated through them using technology-driven solutions.
Current Challenges in Supply Chain Management
- Lack of Real-time Visibility
Many supply chains face the challenge of limited real-time visibility, making it difficult to monitor and respond to dynamic events as they occur. This is because traditional supply chain models primarily rely on periodic updates or historical data, leading to delays in decision-making and increased vulnerability to disruptions.
- Inventory Management
Effective inventory management is another common challenge in supply chain management. Balancing optimal stock levels to meet customer demand while minimising carrying costs and avoiding overstock situations requires accurate forecasting and an efficient replenishment process. A poor inventory management system in this aspect can lead to stockouts, excess inventory and ultimately decreased customer satisfaction.
- Cash Flow Management
Managing cash flow effectively within the supply chain is a complex task. Any delays in payments, extended payment terms and other financial uncertainties can strain the relationship between suppliers and buyers. In addition to this, inadequate cash flow management can also hinder the ability to invest in technology upgrades and process improvements.
Integration of IoT in Supply Chain Management
The integration of IoT in supply chain management has been transformative in the way traditional processes used to be carried out. IoT technologies offer practical solutions by connecting devices and sensors, enabling them to exchange data seamlessly. Here are a few illustrations.
- Real-time Visibility
The use of the Internet of Things (IoT) brings in a variety of connected devices like sensors, RFID tags and GPS trackers. These devices extend up-to-the-minute data on factors such as the humidity, location and temperature of goods. Such visibility covers the entirety of the supply chain, from manufacturing and transportation to warehousing and delivery.
As a result of this updated visibility, businesses can now make well-informed, data-driven decisions using real-time information. This allows for the optimisation of routes, reduced lead times and improved transparency.
- Predictive Maintenance
By harnessing the power of IoT technologies, such as sensors and devices, supply chain managers can accurately predict the health and performance of machinery and equipment in real time. By doing this, businesses can address any issues before they escalate into costly failures. This ultimately ensures the reliability and efficiency of all supply chain operations.
- Customer Experience
Delivering top-notch customer experience is a crucial task for every business. With IoT technologies, you can achieve just the same by providing real-time updates on the status and location of your orders. Connected devices allow customers to track their shipments, receive accurate delivery estimates and even access information about the condition of perishable goods during transit. This improved visibility and communication can ultimately lead to increased customer satisfaction.
In addition to these, the integration of IoT in supply chain management brings several other advantages. These encompass streamlined inventory management, automation, asset tracking and various other benefits.
The convergence of IoT and supply chain management has made a paradigm shift in the way businesses used to carry out their operations. From real-time visibility to predictive analytics, the benefits of the transformative partnership between IoT and supply chain management are truly reshaping the competitive landscape. As businesses continue to embrace IoT technologies, the supply chain is going to evolve into a more agile and efficient ecosystem.
On that note, check out the Advanced Certificate in Supply Chain Management course offered by IIT-Roorkee in collaboration with Imarticus Learning. In this six-month program, you will get to avail a deep understanding of the business context with a practical learning experience. Other benefits of this supply chain management course include professional certification, powerful specialisation and a new-age curriculum.