Nowadays, technological innovations happen much faster than
it ever had. Indeed, it took only a decade for a big portion of the world’s
population to have internet in its pocket. And if you were born in the late
80’s like me, you probably remember the first “mobile phones” from Motorola or
Nokia: nothing to compare to today’s smartphones. This innovation pace has also
its impact on the industry! These technological innovations that we see in our
everyday life found also their ways in factories, offices, trucks, ships,
planes, and is completely reshaping the way business is conducted. While it
enable companies to be much more efficient than it was just 10 years ago, it
also opens everyone’s eyes on “what could be achieved but that is not in place
yet”, resulting in new customer expectations to which each need to adapt. The
Internet of Things, for example, fall into these innovations with tremendous
potential to reshape our world on many facets and areas, supply chain included.
Before to look into how IoT could impact the supply chain
industry, let’s take a look at what IoT is exactly. IoT is mostly known today
through revolutionary products that 10 years ago would be a good candidate for
a sci-fi movie, such as the concept of “smart home” devices. How does it work?
First of all, let’s take a look at what is exactly a smart home device. Put
simply, it is composed of sensors, microprocessors, wireless radio components paired
with an Application Specific Integrated Circuit (ASIC). Sensors capture your
voice (the data) when you “speak to it”, the ASIC is the program that analyze
your request and trigger the according “response” by communicating with other
devices thanks to wireless radio components. Pretty simple presented that way!
The point here is to present the broad range of applications it could have! By
extrapolating it to a factory or a warehouse for example, there is a lot of
potential for connecting objects to each other in order to automate a response
based on data collected, or providing stakeholders with access to data that
would help driving better decisions.
Another important point to consider is how these “smart
objects” actually work. The rule of thumb for IoT devices is to be designed
with the following 3 characteristics:
- It operate on low power.
- It uses low bandwidth.
- It works on a mesh network (every objects can “talk” to each other and “hear” each other)
The reason why these 3 characteristics are important is that
it increase the range of capability of an IoT device in terms of life time
(battery can last up to a decade) and range of communication (anywhere from 30
feet to more than 300 feet).
Now that the background of IoT technology and how IoT devices
work, let’s take a closer look at how it could impact the supply chain
industry. IoT applied to the supply chain is forecasted to have the most
potential for innovation. From warehouse management to logistic, the range of
application is wide and the benefits of it can significantly improve operational
efficiency. For example, sensors on warehouse shelves could detect in real-time
a resource consumption and trigger an automatic order for refill, with limited
human intervention. A little bit like the new concept of Amazon Go, or the
smart grocery shop, where IoT devices detect what items a client takes home and
automatically make the payment, without human intervention. This concept would
allow a company to reduce significantly the amount of time needed for a given
task, reduce the risk of shortage, by ultimately optimizing its supply-chain processes.
All that using devices designed for minimum maintenance needs, as explained in
the previous paragraph.
In summary, IoT technology improve communication by providing
real-time data to any who involved in the supply chain process. This new
real-time data availability will allow internal and external stakeholder to
fill communication gaps and drive faster and more efficient decisions. In other
words, today’s new technologies are opening opportunities to redefine processes
through innovation. IoT is showing tremendous potential for both customer and
industry applications. A little bit like when computers were introduced in the
market! A piece of advice: stay tuned with IoT!
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