Supply chain managers know better than anybody how many things can go wrong between point A and point B. Damage from mishandling and the elements, contamination, and product and IP theft are all very real threats. So how can you use technology to secure yourself against known and unknown threats in your industry? Just as importantly, how can you keep that technology sufficiently secure?
An ounce of prevention is worth a pound of cure — and IoT technologies for the supply chain boast a lot of potential cures. Luckily, with the right approach, you can have all the benefits and still minimize the risks.
What Kinds of Supply Chain Challenges Do IoT Technologies Cater To?
The most obvious advantage of bringing IoT technologies aboard is that you grant yourself true visibility of all your operations. You might justifiably feel a little intimidated at the prospect of newfound access to real-time data at a truly granular level. However, depending on the type of work you do, there are many IoT solutions that might add to your value and help you work more intelligently — without a crippling learning curve.
For example, some elements in your industrial IoT might be as large as pallet trucks and order pickers. Major companies are already deploying warehouse and supply chain equipment with self-driving functionality to achieve higher levels of vehicular safety and productivity throughout their operations.
Other times, bringing IoT to your supply chain provides far quieter, but equally impressive, results. The cost of RFID tags and near-field communication has been dropping reliably for years. What this means is that even large quantities of shipped products and components can receive per-unit identification through trackable, sensor-equipped tags. The right technology can feed you real-time information about the condition of your shipments and details about the environment in which your remote vehicles, personnel and teams are operating.
Of course, gathering all this information is one thing. Sifting through it and actually arriving at efficiency-boosting action items requires the right data analysis talent. In some cases, you'll need a reliable third party who can help you make sense of it with a dashboard or cloud business tool that's tailored to the work you do.
As you've probably been able to gather, the rest of the challenge centers on keeping all these devices — and the vital data they carry — safe from prying eyes. It also has to be accessible and useful to your team and partners.
The IoT Comes With Challenges of Its Own
With few exceptions, the major challenges that accompany a supply chain's integration of emerging IoT technologies fall along these lines:
- Ensuring continued connectivity throughout networks with virtually no downtime
- Safeguarding vital data, such as shipment locations, and making proprietary information, source code and other IP resistant to theft and tampering
- Making sure new hardware and software integrates well with existing platforms and IT solutions
You won't be surprised to hear this, but a majority of IT specialists in the corporate world cite increasingly complicated networks as the source of most of their security concerns. Think about the complexity of the IoT — and all its satellite devices, beaming information to each other and to you. You'll start to get a sense of the challenge awaiting you when your facility or supply chain operation performs its own digital upfit.
Using the IoT to augment your abilities as a market leader and add transparency to your organization doesn't have to come at the expense of security-mindedness, however. In fact, in making strategic IoT purchases, you're very likely to find yourself better prepared than ever for some of the general and industry-specific compliance and quality standards you might be expected to uphold, such as HIPAA, PCI-DSS and Sarbanes-Oxley.
These probably sound like consumer-centric security regulations, and they are — but they exist to protect you and your partners, as well. They're a reminder that every piece of technology in an industry that touches human lives is an opportunity and a responsibility in equal measure.
Productivity and Security Work Hand-in-Hand
One of your first steps is to work with your partners to develop a holistic security solution for your newly connected supply chain. Anything you come up with needs to be consistent and as strong as the weakest link. Where are mistakes or security breaches most likely? In client-facing operations? In the last mile of delivery? Communication is paramount at this stage.
After that, it's a matter of gradually rolling out the hardware and software you're bringing into your operations. There will be a learning curve, after all, but ensuring buy-in from your managers and process specialists can go a long way.
Making conservative changes, one at a time, is also good for getting your team members acclimated to changes in their workflows and helping them iron out the kinks. Think about the waste you'd incur if the sensors you've deployed with your outgoing shipments aren't recovered and returned to your facility, for instance. Technology is filled with opportunities, but some of it also requires attention to detail. A deliberate approach ensures things progress smoothly.
Depending on the technologies you deploy, the granular, real-time data you gather from your logistics, sourcing, handling, shipping and returns departments can help you peer into the future and more accurately anticipate fluctuations in customer demand. You can also plan for changes in parts and material availability throughout your supply chain.
You get to think several steps ahead of the game and stay ahead of your competitors. Think about the benefits of getting ahead of something like the electronics components shortage currently gripping the market.
That level of planning ahead is useful for keeping your operation secure in many ways. One is anticipating where your products will be needed and planning ahead for potential roadblocks. Others include better preparedness and more complete contingencies for emergencies such as natural disasters, lost or stolen shipments, lost internet reception for connected devices, extended power outages and more.
In this way, technology is a bit like a snowball. As it solves one problem, it seems to elegantly solve other interrelated issues. As a consequence, if you play this right and work with the correct talent, you'll find yourself improving efficiency throughout your operations — even as you make them more resilient against outside forces and unforeseen interruptions.
By capturing real time inventory data from vending machines, smart shelves and other instrumented sources of retail data, you learn customer preferences which let you quickly manipulate product mix to increase sales.
It is said that there are 100,000 freighters on the seas and that 90% of everything you have has come via container ship. The first time I saw Hong Kong Harbour from my swank room at the JW Marriott what struck me most was the number of container ships. As I scanned the waters I counted several dozen of the floating giants and imagined everything onboard was coming out of China and going somewhere on the planet.
Photo Credit: Andrew Smith via Flickr
Once at its destination port a gantry crane unloads the containers and places them either on a truck or a rail car. Then the goods are sent off to their respective warehouses, where another delivery vehicle most likely takes it to another vendor or supplier where it might eventually end up in your garage. Just thinking about this one aspect of transportation and logistics is mind boggling. And it’s perfect for IoT.
The fine folks at Deloitte University Press have written a wonderful overview on IoT considerations for the shipping and logistics industries. Entitled, “Shipping smarter: IoT opportunities in transport and logistics,” the report highlights that while companies in transport and logistics (T&L) have always been data-driven, with specific applications like real-time tracking of shipments, warehouse-capacity optimization, predictive asset maintenance, route optimization, improved last-mile delivery, and more, they still have a huge opportunity ahead of them in IoT.
The increasing number of connected devices, embedded sensors, and analytics technologies will only increase the data and accelerate. This will lead to more efficient use of transport infrastructure, better engagement with customers, and more informed decision making. The report has four recommendations for T&L and IoT, but what I found most thought provoking was their framework that captures the series and sequence of activities by which organizations create value from information: the Information Value Loop (see below).
You can find the full report here. Further reading on the subject is listed after the graphic.
Big Data Analytics and Supply Chain Management - http://bit.ly/1KU0lOZ
Sensor Applications Support the IoT: Part 1 Smart Transport - http://bit.ly/1Kt4YNZ
How IoT Based Analytics Will Drive Future Supply Chain Operations - http://bit.ly/1OhOOJE
Top technology trends in supply chain & logistics industry - http://bit.ly/1Lk6Bhw
The Industrial Internet Comes to the Loading Docks - http://bit.ly/1iSEHOE
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