How can IoT help the world navigate the supply chain crisis?

Jessica Robinson

The global supply chain crisis is deepening at a rampant pace raising high alarms. In fact, the delicate supply chains that act as the lifeline of global trade and commerce are finding themselves under more stress with each passing day. Needless to say, these supply chain disruptions are no less than nightmares even for the world’s strongest economies.

The world’s economies are pushing for streamlined economic recovery after being hit by the COVID-19 pandemic for almost two years. The pandemic indeed has inflicted heavy economic losses resulting in crashing GDPs. However, now what stands in the way of the forecasted economic recovery is a massive supply chain disruption at the global level.

As cited by AlixPartners, the global automotive industry is expected to face a drop out of around 36 million units in the coming three years due to the scarcity of semiconductors. In fact, Toyota is altering its production by 40 percent given the supply chain disruptions in the auto industry. In a similar manner, the supply chain disruptions are impacting all industries. Experts are also of the view that the ongoing supply chain problems may prevail till 2022.

There is an acute shortage of graphic cards, computer chips, chemicals, vehicle manufacturing parts, semiconductors, paper etcetera. Moreover, there is massive congestion at ports, an inadequacy of shipping containers, and a grave deficit of truck drivers for transportation and logistics. These are the major driving forces behind the global supply chain crisis. The impacts are being felt by all industries as production efficiency is hit because of supply chain backlogs.

Supply chain disruptions are hitting economies of the world

Probing further, the impact of the supply chain disruptions is already visible in economic projections. To substantiate, the International Monetary Fund has downgraded the growth of the United States by one percentage point. The reasons that the IMF has cited focus on disruptions in the global supply chains and downfall in consumption. Needless to say, as long as the supply chain remains constrained, the production and consumption both will remain low.

Now the question is, what measures can be taken to revive the global supply chain before economies begin to feel the heat. Needless to say, disruptions in the global supply chain is an issue for all countries to address as it impacts each of them. Can the world find new traces of hope in technological innovations? Can technological advancements of the highest class emerge as the measures the world is striving for? Can the internet of things (IoT) be of any help?

Certainly, the IoT can be one worthwhile innovation that can help the world negate the ongoing supply chain crisis. Internet of things can play a massive role in making the global supply chains more resilient to unprecedented situations. The subsequent section highlights the various ways in which the global supply chain can find benefits and new dimensions of hope in Internet of things. A more extensive application of IoT in the global supply chain functioning could well be the need of the hour and the most worthwhile response to disruptions.

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5 ways IoT can make the global supply chain more effective

1. IoT enables improved inventory management

IoT can be of great help in improving the efficiency of inventory management. IoT asset tracking can be used effectively to track the exact location of all elements in the supply chain. Hence, IoT asset monitoring sensors can be tagged to packages in the supply chain so that the inventory can be managed in a more efficient manner.

IoT tracking can help business organizations or manufacturers prevent shortages in supplies. Moreover, IoT trackers can help in avoiding losses to the supply chain because of events like theft or shrinkage. The shipment tracking feature of IoT sensors can be a great remedy to ease out the stress in the global logistics chain. With IoT sensors tagged to the packages or installed in shipping containers, the condition of goods in transit can be assessed at all times.

For the retail industry, the IoT trackers can prove to be priceless in terms of optimizing deliveries of goods ordered online. Using these trackers, retailers can provide constant updates on the delivery of packages to the customers. Besides, they can also determine if any shipping practices are resulting in damage to the goods. This is because IoT trackers can also sense the integrity and safety of fragile goods in shipments.

Therefore, in multifaceted ways, IoT can optimize the management practices linked to inventory and enable contingency for disruptions in the supply chain. Companies can maintain adequate inventory levels with the help of IoT tracking. In this way, they can be better prepared for crises like the COVID-19 pandemic.

2. IoT can optimize fleet management

Fleet management is another key area of managing supply chains in an organized and efficient manner. For supply chains to remain functional at all times, it is essential to monitor the fleet for maintenance or fuel efficiency.

This is where IoT can be of incredible help yet again. IoT can add new dimensions of efficiency in fleet management enabling tracking of parameters linked to the fleet. Equipping the components of the fleet like trucks, vans, forklifts etcetera with IoT sensors can help in tracking the efficiency of vehicles. IoT sensors will be able to identify if vehicles in the fleet need maintenance or if there is any issue with them that requires immediate attention.

In fact, IoT sensors on vehicles can also ascertain the driving behavior of fleet drivers. IoT sensors can determine if drivers are exhibiting safe driving behavior or not while handling fragile or sophisticated supplies.

3. IoT can reduce spoilage by creating an effective cold chain

Cold chains are of high imperativeness for the supply of pharmaceutical substances, sensitive chemicals, foods, beverages, and reactive compounds. In case the temperatures rise beyond the prescribed threshold during transit, it can lead to spoilage. In fact, in the case of reactive elements or chemicals, temperature rises can also lead to disasters. Such spoilage can cause big depressions in the supply chain leading to grave repercussions.

However, IoT can address this huge challenge in the transportation and handling of sensitive supplies. IoT sensors can monitor the temperature of goods in shipments and keep an eye on temperatures rising above the prescribed limits. In case of such events, with immediate effect, IoT sensors can alert people who are a part of the logistics chain. They can then take real-time actions to cool down the shipments and hence prevent spoilage or accidents.

In this way, by updating logistics managers or drivers on changes in temperature, IoT can help in creating a more reliable cold chain. This can render great advantages to supply chains in the pharmaceutical industry and the food and beverage industry. These industries often face heavy losses and supply chain disruptions due to spoilage. Besides, when it comes to harmful or sensitive substances like chemicals, IoT can make the supply chain more protected. With IoT, supply chain managers can deliver on more objectives and key result areas than ever before.

4. IoT can facilitate improvements in time to market

Besides the prowess of tracking locations of shipments in real-time and identifying constraints, IoT also comes with the great power to offer an instant response. These responses are coherent to guidance from autonomous networks and intelligible systems.

This feature of the Internet of things when applied to the supply chain will result in enhanced opportunities for innovation and improvements in cross-enterprise processes. In this way, there can be significant improvements in the time to market. Indeed, supply chain managers can pivot key skillsets for better results in supply chain logistics with IoT. Innovation will be at the forefront of everything with IoT at the helm.

Time to market here refers to the duration of time between conceiving a product and its final launch in the market making it available for sale. Of course, it is understandable that the time to market will be better when supply chains function as expected. For instance, companies announcing new cars in 2021 may not be able to launch them in the market as expected due to semiconductor shortages.

Besides, in addition to enhancing the time to market, IoT can also lead to cost containment in the best interest of supply chains. All these advantages are based on the intelligible features of IoT that enable the capabilities of modeling and predicting scenarios or changes. IoT can play a pivotal role in bringing optimized planning solutions onboard.

5. IoT can refine the data-driven approach in the supply chains

The real-time and credible data yielded by IoT sensors and trackers can be of great value in terms of refining the supply chains. Based on the dynamic data that will be constantly upgraded in coherence with real-time monitoring, companies can ascertain if their supply chain management is efficient enough or not.

Moreover, this data provided by asset tracking can also help the companies in evaluating their vendor relationships. Companies can identify and plug the inefficient vendor relationships leading to delays in the supply chain or unnecessary losses.

Moving forward, the accurate data provided by IoT asset tracking systems can also facilitate effective forecasting relevant to the latest situations in the global supply chain. Based on the accuracy of forecasting, companies can tweak their supply chain management. IoT can also provide the metrics of resource utilization, employee engagement, and employee skills going into the supply chain.

To encapsulate, experts are of the view that IoT is the future of supply chain management. The supply chain crisis that the world is battling at present is grave and IoT can be a reassuring response to it. IoT has already entered the supply chain domains and its incorporation is further expected to increase in the coming years. Needless to say, given the innovative capabilities of IoT, one can expect it to overhaul the supply chain dynamics for the better.

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Jessica Robinson is a charismatic corporate leader, a selfless educator, and a versatile content creator. Despite a management degree, her vision behind blogging is not only to follow her passion but to create more informed societies. Her selflessness reflects in every piece of her work on The Speaking Polymath.

Melbourne, FL
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