The evolution of the Internet of Things in Supply Chain Management

The Internet of Things or Internet of Things (IoT), despite still having plenty of opportunity for evolution, is no longer new. In 2015, our expert Leonardo Julianelli was already talking about the theme.

IoT can be applied throughout the supply chain, bringing benefits to the various logistics functions such as warehousing, inventory management, transportation, demand response and customer service. These benefits range from reducing costs by reducing waste, reducing resource consumption and better use of assets, to improving the level of service by adding values ​​of time, place, quality and information. In short, IoT enables a new level of operational efficiency, as well as creating automated services for your customers.

The application of IoT in the supply chain can take place in different stages, depending on the level of technological sophistication employed:

1. Asset transparency

With the monitoring of assets through sensors, it is possible to record their use. This information can be used a posteriori for analysis of productivity, utilization and idleness of assets, generating important inputs for decision-making on capacity adjustment. An example would be tracking the use of forklifts, noting the times of day they are most used and whether there is room to cut a forklift from the operation. In this way, through in-depth knowledge of all assets, it is possible to maximize their use.

2. Monitoring and control

Along with monitoring asset usage, it's interesting to track resource consumption and the condition of those assets. How much energy they are using, what is the temperature, what is the vibration, are some examples of monitoring that can be useful to avoid waste and breakdowns.

The project Mode, supported by the European Union, is an example of how monitoring and control through IoT can reduce vehicle maintenance costs. The project consists of developing a truck that autonomously identifies the need for maintenance at the right time and sends the information to a monitoring center. This center, which receives data on vehicle conditions in real time, directs the vehicle to the nearest technical assistance. In this way, preventive maintenance based on historical data and statistics is avoided, which can inactivate the vehicle before the real need. To learn more about the MoDe project, watch the video below.

Another example of monitoring and control is Blue's Smart Bottle prototype. Label, presented at the Mobile World Congress in Barcelona in 2015. The project consists of a label with a sensor printed with NFC (Near Faithful Communication), which transforms the Blue Label into a smart bottle. Using a smartphone, the consumer can track the entire path taken by the bottle until it reaches the shelf and still have information about the condition of the product (if the label has been violated, for example). This is an example of how the IoT can offer a better level of service by providing information value to the customer.

3. Real-Time Operation Optimization

At this stage of IoT implementation, the object has algorithms that optimize its operation in real time, without human interference. An example would be the thermostat of a refrigerator connected to the cooling control, which automatically increases or decreases the intensity according to the ambient temperature in order to optimize energy use. Thus, the optimization happens automatically, without the need for a posteriori data analysis for decision making.

4. Complete System Automation

This is the most evolved stage of IoT, when objects interact with each other and optimize the operation as a whole in real time, without the need for human interaction in the process. A hypothetical example would be a warehouse shelf that updates the WMS in real time and identifies the stock level of products. When the stock reaches the minimum level, the shelf automatically communicates with the supplier's ERP and places the order according to the programmed parameters.

Figure: Stages of IoT use in operation

Currently, IoT is still very dependent on human interaction, mainly in data analysis and decision making. Therefore, there is still a lot of room for its evolution. It is expected that in the future the connection between objects and systems will happen completely, leaving the most strategic decisions and the development of optimization algorithms to people.

References:

Internet of Things and Nanotechnology: where will we go in Supply Chain Management

http://gtdc.org/wp-content/uploads/2016/06/Internet-of-Things_ATKearney.pdf