By Albert Gibosse | Blue Label Weekly Magazine | WEBSITE |
The Internet of Things (IoT) is a major digital disruptor that drives performance and
productivity for those within the supply chain industry. Benefit fully from IoT investments within a secure, intelligent and connected supply chain operation, also means that businesses utilize an IoT platform that is built around Identity and Access Management (IAM).
Reshaping the supply chain with IoT
The Internet of Things will help develop new capabilities to revolutionize supply chains. With the increased global and complex supply chains, organizations are obliged to
collaborate closely with customers, suppliers and partners to achieve realtime visibility across every part of the supply chain.
With the Internet of Things (IoT) being one of the biggest technology success stories of all time, the speed at which IoT-enabled devices have become a part of our daily lives has
been astonishing. As over 70.4 billion connected IoT devices are expected to be in use by 2025, IoT will generate as much as $12 trillion a year in the same period, which will represent 11 percent of the world’s economy. This value being generated within business, factories and logistics will feature prominently. Likewise, fifty percent of all IoT spending will come from the manufacturing, transportation and logistics and utilities industries.
Moreover, although business to business (B2B) applications will account for over 70 percent of all value generated by IoT, companies must identify key areas in which IoT can help generate real value and create an IoT-capable infrastructure to realize their full potential.
Heavy investment in an enterprise-wide IoT platform focused on identity and access management (IAM). It also explores how IoT can be leveraged across three key supply chain activities
- Visibility of shipments as they move across global supply chains
- Automated replenishment of procurement processes
- Predictive maintenance of IT and supply chain equipment
IoT is benefiting supply chain operations in these different ways
IoT’s ability to deliver makes it the top investment priority within the supply chain of many organizations, as seventy percent of executives are already expecting to see payback from their IoT investments.
Nearly fifty percent of transport and logistics companies have already implemented IoT as part of major business transformation initiatives and are currently using connected devices for notifications and realtime monitoring rather than for optimizing and transforming their supply chain operations.
Implementation of IoT in the supply chain is enabling companies to realize significant benefits.
Evolving the supply chain with IoT
Whereas pre-IoT deployment were done on proprietary networks and could only capture data relating to their
specific function(s), current IoT developments provision for devices with smart sensors to provide realtime monitoring and reporting on every aspect of the supply chain that include the location, temperature, humidity and time of arrival, as well as changing equipment settings and process workflows to optimize performance.
Moreover, granted most companies are currently using their IoT devices for the monitoring and alarm functionality of their previous sensor and tagging technologies, most supply chain executives are aware that the real power of IoT lies in logically connecting people, processes, data and things—then taking advantage of that intelligence to radically change business processes.
The eventual goal is to enable realtime and informed decision-making that allows organizations to move beyond efficiency and cost improvements toward implementing more effective business strategies around new product development, proactive inventory management and demand-driven production.
IoT’s ability to help optimize the supply chain can be defined as follows
The collection, consolidation and processing of data coming from a network of physical objects and the conversion of that data into actionable intelligence.
IoT’s three-stage process in the supply chain include
- Data collection: Collecting data not only from IoT devices, but also from people, processes, and other systems and infrastructure
- Data consolidation: Converging all data into extremely large data pools—often called data lakes—and ensuring access to structured and unstructured data held in disparate repositories internally and externally
- Data conversion: Leveraging cloud platforms with advanced analytics capabilities to gain full intelligence and value from the data
loT entails much more than simply connected devices
Capturing data from connected devices and then analyzing and acting on that data are
key capabilities of IoT devices. IoT is intrinsically linked to analytics, artificial intelligence (AI), machine learning as well as other critical digital initiatives. In all, IoT is now a top investment priority for supply chain companies and should be for every organization.
The challenges that supply chain organizations face, as they evolve their IoT capabilities from that of simple reporting and alerting into those that will optimize their supply chain, include the amount of data – that are growing exponentially – they are required to handle as they also struggle to and only analyzed less than half of their IoT data.
Modern supply chains require close collaboration with customers and suppliers
Organizations have made significant strides in connecting and accessing information
from third-party devices, assets and people. Over 40 percent of companies that implement IoT are gathering data from third-party mobile assets, such as trucks, vehicles, as well as integrating directly into IoT supplier networks.
Essentially, IoT-enabled infrastructure must focus on secure and trusted connections for people, processes, systems and things. Such infrastructure should be a structure that enables all forms of connections that include machine-to-machine, machine-to-person and machine-to-application, without placing undue administrative or processing burden on the organization.
Creating the digital ecosystem
IoT is more effective when all elements of the supply chain are connected —a connection that requires a seamless and secure interaction of people, systems and things. The digital supply chain is fast becoming the “Intelligent and Connected supply chain,” thus representing the next stage in digital transformation. The digital ecosystem offers a holistic approach to bringing big data, IoT, analytics and AI together to achieve dramatic business transformation.
In effect, the organization is creating a “digital ecosystem,” of which IoT devices are but one component. The ecosystem is built around a single digital backbone that connects and integrates with any person, device or enterprise system across a highly complex environment, such as a global supply chain, thus providing the foundation on which to link internal enterprise systems and external trading partner communities.
The Digital Ecosystem
The enterprise-wide IoT platform forms the basis for deploying and managing a digital ecosystem—a central platform that will allow organizations to quickly build and deploy new IoT applications, collaborate with suppliers and customers and optimize supply chain performance while mitigating compliance risks. According to IDC, by the end of 2020, 50 percent of new IoT applications will leverage an IoT platform that offers outcome focused functionality based on comprehensive analytic capabilities.
The ultimate challenge for organizations seeking to fully take advantage of an IoT platform lies in how to drive security across the entire digital ecosystem while also ensuring safe and appropriate access
Although loT security is improving, challenges remain as seventy-five percent of companies list security as their chief consideration when selecting connectivity for IoT projects.
Among IoT users, security is certainly their primary concern. Organizations therefore need an exacting means of protecting devices, data, systems and enterprises from cyberattacks and privacy breaches. Security is aimed at guaranteeing trusted interactions among all entities in the IoT network. It is predicted that by 2020, there will be 215 trillion stable connections with 63 million new ones every second.
Likewise, as IoT connections grow so will trusted interactions, which will become increasingly essential. Each connection must therefore be cautiously managed, while the IoT platform enables data flow into processes across the supply chain.
Reliable estimates suggest that many IoT devices have security vulnerabilities and that 81 percent of all cyberattacks were credentials-based. Guarding the perimeter is no longer enough: security revolves around how various entities gain access to the network.
Secure IoT platforms Must
- Provide secure and seamless data exchange across organizations and systems
- Enable the effective management of online and offline state of entities and sync data across networks and in the cloud
- Enable the management of the lifecycle of entities as roles and authorizations evolve
- Control entities’ use of protected resources
- Administer access and manage entities’ access
- Enable the Integration of disruptive disparate technologies (cloud and on-premises apps) as well as legacy systems and data repositories
- Enable the management of global compliance and governance
- Seamlessly enable the connection to internal enterprise systems and external trading partner communities Security is at once a major concern and a key enabler. Within the supply chain, loT is not a task that a single organization can achieve in isolation. Rather, loT must function alongside suppliers, logistics providers and other partners. The level of collaboration needed to optimize supply chain performance requires trusted access into the systems of trading partners.
Most companies view IT security as a key enabler of building trust when moving online.
IoT platforms that enable identity-centric approaches allows organizations the flexibility to manage the lifecycle of devices, systems and people from initial provisioning to final deletion. Such platforms deliver powerful capabilities to manage the relationships between entities, and the ability to audit and track every event associated with every entity delivers complete transparency across the digital ecosystem.
These IoT platforms enable vast amounts of structured and unstructured data from various sources to be rapidly ingested and aggregated in large data sets. Unified data model allows all data to be normalized across the entire ecosystem. The platform can then apply a series of services to the data to meet the needs of the business processes within your supply chain. Its integrated advanced messaging and orchestration services enable the flow of data among devices, systems and people, thus removing the need for separate machine-to-machine, machine-to-application and machine-to-people integrations.
Essential use case(s) for IoT in the supply chain include the effective deployment of IoT
increases the speed and accuracy of decision-making through advanced analysis of all data available to the enterprise.
IoT can deliver faster cycle time, improved customer experience, new products and revenue streams as well as flexible and agile business processes.
IoT use cases that offer the potential for great value to supply chain operations
Supply chain use cases for IoT Pervasive Visibility include knowing an item’s location, condition and delivery time is of vital importance to all supply chain operations.
With previous generation of tags and sensors that could only provide some information on location and condition, their scope were quite limited. As the elements weren’t connected, it wasn’t possible to track items in realtime. More importantly, the data they created was isolated from other relevant data. For example, a barcode could provide information about the location of a pallet when it arrived at a warehouse, but this information couldn’t be correlated with the temperature of the item during transit. IoT provides improved end-to-end visibility of goods ”from floor to store,” thus enabling the continuous and pervasive flow of data from highly connected supply chain assets during every stage of the process. This visibility includes tracking and monitoring of multi-modal 3PL providers, optimization of warehouse operations and improvements in “last mile” delivery.
The key to Persistent Visibility lies in a new generation of cloud-based Geographical Positioning Systems (GPS) and Radio Frequency Identification (RFID) tags and sensors
These tags and sensors provide granular, realtime information of item identity, location and other tracking information. They also provide environmental information such as temperature, humidity and even the condition of the pallet.
With Pervasive Visibility, the supply chain professional has a complete picture of every item as it passes though the supply chain, allowing the organization to achieve unprecedented levels of control and transparency to ensure that the right product is delivered at the right time in the right condition and at the right cost. Pervasive visibility is also useful in the monitoring of perishable goods moving through a supply chain.
Pervasive Visibility delivers | Improved asset utilization
Through continuous monitoring, it is possible to measure the performance of any asset in the supply chain and effect change when required. Pervasive visibility delivers complete control, which means knowing what assets are currently doing and what they will do next.
This data facilitates analysis that identifies when assets are underperforming and how to better utilize assets to improve business performance. In this way, an organization can begin to increase the automation within business processes to eliminate manual intervention, improve quality and reduce costs.
Improved fleet management
The connected vehicle is one of the breakthrough use cases for IoT. Today, millions of car owners are benefiting from a series of in-car services, including predictive maintenance and emergency support, delivered from a central IoT platform. The connected vehicle has even greater application within the commercial world as the basis for improved fleet management. For example, a container in transit can be tracked by the meter or by the second. Not only can trucks continually report on the performance of the vehicle and the condition of the cargo, but they can also communicate with the driver to advise on optimal speeds and routes.
Optimized warehouse management
Combining IoT with other supply chain systems creates a “smart warehouse” that can boost responsiveness and efficiency. Using sensors, tags on pallets, video cameras and wearable devices, such as smart watches and glasses, staff can chart each item’s optimal time and path prior to its arrival. In addition, IoT can improve the performance and safety of autonomous vehicles—such as forklifts—as they travel around the warehouse.
Reduced supply chain risk With so many geographically dispersed organizations in the global supply chain, there is ample room for uncertainty, which breeds supply chain risk. Any number of factors can affect or delay order fulfilment. Although reduced supply chain risk has previously been difficult to predict and control, IoT can improve control over goods in transit. At a tactical level, IoT can provide constant information on road and weather conditions to the driver and head office to plot the optimum delivery route. This feature enables constant delivery status in realtime to the customer, thereby creating an enriched customer experience.
Strategically, IoT, when used in conjunction with AI and analytics, becomes extremely good at predicting and planning for adverse events (such as natural disasters) with the aim of reducing risk and increasing business continuity.
Proactive Replenishment and Improved Customer Experience
With inventory optimization being key to every company, reducing inventory levels while improving customer experience requires the ability to automate much of the replenishment process in order to continuously monitor stock levels and restock as required.
Likewise, avoiding out of stock situations that may lead to lost sales entail adding tags and sensors can be added to all items. Connecting the sensors to the Warehouse Management System can provide realtime inventory visibility. Like monitoring the stock levels, IoT platforms can indicate the condition of each item, such as the storage temperature or expiration date, to ensure the quality of the items in the supply chain.
Scanning pallets before they leave the warehouse, will ensure that the right items are shipped in the right order, during outbound delivery, and automatically update stock levels while also triggering the replenishment process when ever required.
The growing use of IoT in the retail and store environments allows an organization to capture in-depth information on customer preferences. Along with consumption monitoring analytics, shelf sensors provide immediate notification when retailers are running low on stock and can automatically trigger replenishment. Likewise, IoT data also enable quick and accurate prediction of future buying patterns. That way, companies can start building their inventory based on actual customer demand, therefore reducing the amount of stock held in the supply chain to ensure the correct levels of availability
Being able to predict when part of sub-system of a serviceable product is likely to fail continues to be a key investment area for the supply chain. Whether a given a part is within the production process, the warehousing environment or part of a connected fleet vehicle, IoT enables proactive monitoring and analysis that can boost the performance and lifespan of the part as well as ensuring the availability of the entire sub-system.
Predictive maintenance is a key use case in IoT
By attaching sensors to physical assets, they’re able to emit instant alerts to the supply chain professionals when it is operating outside acceptable levels. When applied to advanced analytics and machine learning, the IoT platform can determine whether the part needs to be replaced or repaired and then automatically trigger the correct process.
This conclusion is not only from the history and past performance of a particular asset, but also from a range of data sources covering similar asset types, sub-systems and operating conditions—information that can provide intelligence and enable a more informed decision.
For example, the flow rate sensor attached to a hydraulic pump on a train’s braking system may alert the IoT platform to pressure loss in the hydraulic pump. The machine learning and AI capabilities within the IoT platform can then decide whether to repair or replace the part. The IoT platform then automatically triggers the correct process (either to repair or replace a failing part) and initiates any supporting processes, such as parts ordering, work orders and documentation exchange needed to ensure that maintenance is completed as quickly and efficiently as possible.
Organizations are currently reaping competitive advantage by managing their supply chains as a strategic asset. Increasingly, companies are working with suppliers worldwide to increase supply chain efficiency and collaborate on ways to drive customer experience and create new products. Indeed, with operational efficiencies and revenue opportunities, the IoT is set to revolutionize the supply chain—offering the potential to radically improve the performance of its supply chain. However, like the supply chain itself, IoT-based solutions involve a complex ecosystem of devices, systems and people. Reaping the full benefit of any IoT investment, then, requires an enterprise IoT platform that can quickly and easily create new IoT applications that address the key use cases—such as Pervasive Visibility, Proactive Replenishment and Predictive Maintenance—for IoT in the supply chain.
Advanced Identity and Access Management must be one of the platform’s core components. Thus, it is crucial to implement an IoT platform that allows organizations to enable the secure and trusted interactions needed to achieve close collaboration with trading partners and optimization across the entire supply chain operations.
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