The Supply Chain and the Internet of Things

Say goodbye to bar codes? Eventually, yes.

Is your company ready to reap the benefits from the internet of things (IoT)? The use of sensors and radio frequency identification (RFID) in the supply chain is nothing new. What is new is the ability to communicate a world of data to wholesalers and manufacturers — in real time, from end-to-end, with internet-based sensors.

Combined with always available cloud technologies, the promise of the IoT is more visibility and control in operations. And in the end, don’t you want to help meet your customers’ demands to receive your products and goods as on time as possible?

Investment in the IoT is real. In 2016, manufacturing had the largest IoT investment at an estimated $102.5 billion, and the IoT overall is projected to increase at a 15.6% compound annual growth rate, rising to $1.29 trillion by 2020, according to recent IDC research.[1]

Information technology and supply chain research firm Gartner depicts the IoT this way in its blog post “Five Ways the Internet of Things Will Benefit the Supply Chain”[2]

Unlike previous generations of passive sensors, the IoT will allow a supply chain to control the external environment and execute decisions. With the IoT, sensor-embedded factory equipment not only can communicate data about parameters such as the temperature and utilization of the machine, but also can change equipment settings and process workflow to optimize performance.

Think about it: The sharing of high volumes of data via IoT connectivity enables companies to collect, view, track and analyze information across the entire supply chain. Imagine being able to track specific products from factory creation to shipment to customer delivery.

Inventory and warehouse management teams will have many uses for the emerging IoT technologies, too, including using active RFID tags that have their own battery power and additional “smart” sensors. Low-power wide area networks (LPWAN) used with internet-connected trackers and satellite trackers share location data from virtually anywhere on the planet, including areas without cellular coverage. Along with near-field communications technology tags, Bluetooth tags and beacons, information about a product is only a mobile device away from a worker’s hands.[3]

With the IoT, you can:

Improve your asset tracking. Although asset tracking inventory using bar code scanners has been available for years, new IoT technologies provide more precise data on the location of components.

Streamline workflow. Embedded sensor technologies can enable supply chain managers to change equipment settings, more effectively streamline workflow, and monitor and adjust system parameters as conditions warrant or necessity directs.

Boost your demand planning. Continuously matching demand and availability “will positively impact revenue, profitability and customer service while simultaneously optimizing finished inventory,” wrote Lalit Wadhwa, vice president of global supply chain operations for Avnet, in his blog post “How the IoT Will Change the Supply Chain.”[4]

Shore up customer service. Wadhwa also points out that more capabilities for tracking raw materials and finished products throughout their entire life cycle can boost customer service performance and contribute to improved use of working capital.


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The article(s) you are reading were prepared for general information purposes by Manifest, LLC. These articles are for general information purposes only and are not intended to provide legal, tax, accounting or financial advice. PNC urges its customers to do independent research and to consult with financial and legal professionals before making any financial decisions. These articles may provide reference to Internet sites as a convenience to our readers. While PNC endeavors to provide resources that are reputable and safe, we cannot be held responsible for the information, products, or services obtained on such sites and will not be liable for any damages arising from your access to such sites. The content, accuracy, opinions expressed, and links provided by these resources are not investigated, verified, monitored or endorsed by PNC.