Until about 25 years ago, warehouses relied on manual processes to manage inventory. Warehouse associates had to locate each item physically and then document it on paper or with a barcode scanner for upload to a spreadsheet or database. While some warehouses still operate this way, the methodology is outdated, slow, and inaccurate for businesses that move substantial volume.
The rise of the Internet of Things (IoT) has dramatically changed the warehouse and the entire supply chain. Internet of Things devices create a network among physical objects, allowing for real-time or near-real-time information sharing. In this article, we’ll discuss some of the benefits shippers see from using IoT technologies.
Enhancing Visibility and Transparency
The introduction of Radio Frequency Identification (RFID) technology in the early 2000s changed inventory management for the better by improving the visibility of physical goods. Initially, attaching RFID tags on pallets or goods merely helped warehouses see when inventory entered and exited the warehouse. Now, advancements in RFID technology still hold a valuable place among supply chain visibility technologies.
RFID tags, GPS trackers, sensors, and data loggers that connect via cellular or Bluetooth® have advanced significantly in recent years, ultimately making up what is known as the Internet of Things. Since the IoT also includes consumer devices, sometimes supply chain- and manufacturing-purposed devices are called the Industrial Internet of Things (IIoT).
Incorporating IoT devices into shipments and warehouses gives organizations a substantial boost to end-to-end supply chain visibility by providing:
- Real-time tracking – Thanks to GPS and cellular sensors, shippers can track the location of cargo in real time. This enables shippers to identify and address shipment problems earlier to avoid disruptions.
- Inventory management – When combined with an advanced warehouse management system or other inventory management software, IoT sensors dramatically improve the accuracy of inventory counts. Warehouses also gain a real-time view of inventory, facilitating better purchasing decisions.
- Supply chain transparency – IoT increases transparency by providing stakeholders with access to data at every stage of the supply chain. IoT sensors monitor production processes during manufacturing, check in with data at key checkpoints during transit, alert freight owners if cargo goes off course, monitor vehicle health, track environmental conditions, monitor goods moving around the warehouse, and more.
Improving Efficiency and Automation
The IoT has also been an essential part of the automation revolution in the supply chain. Much of the data used to feed the machine learning algorithms that train artificial intelligence comes from IoT sensors and devices. Collecting this data at every stage of the supply chain is critical for identifying processes that can benefit from automation. Here are a few examples of IoT-enabled automation:
- Smart warehouses – IoT sensors are the backbone of the modern smart warehouse. IoT plays a role in mapping optimal paths for pickers, optimizing inventory locations based on demand, and programming goods-to-person robotics, among other tasks.
- Automated operations – The Internet of Things facilitates various supply chain automation, including automated or Lights Out factories, robotic-supported picking and packing, asset management for vehicles and equipment, and real-time inventory tracking that mitigates the risk of overstocking or stockouts.
- Predictive maintenance – IoT sensors on equipment can predict failures and schedule maintenance before a breakdown occurs, minimizing costly downtime.
- Transportation optimization – Data collected by IoT devices can optimize routes and reduce transportation costs by analyzing traffic patterns, weather conditions, and fuel consumption.
Elevating the Customer Experience
The global pandemic taught manufacturing, logistics, and retail professionals just how much the supply chain impacts the overall customer experience. Material shortages at the manufacturer have a domino effect on retailer and wholesaler inventories. Poorly tracked inventory can lead to late ordering, causing stockouts that frustrate customers. A few late deliveries can cause customers to give their business to a competitor.
The IoT has made it possible for supply chain stakeholders to address many of these issues through the power of better data. IoT lets businesses create a better customer experience by facilitating improvements in:
- Demand forecasting – IoT data helps businesses better understand inventory trends and consumer behavior, leading to more accurate demand forecasting.
- End-to-end visibility – IoT helps to ensure that the goods customers want to buy remain in stock. Additionally, it allows sellers to provide customers with real-time updates on their orders, improving satisfaction and trust.
Powering a Modern Supply Chain
The Internet of Things works hard behind the scenes of a vast range of end-to-end supply chain processes, ultimately providing industry stakeholders with more accurate, higher-quality data. This data gives organizations the power to make informed decisions that extend beyond the supply chain function and enable a more efficient and effective business operation.
About Phoenix Logistics
Strategic Real Estate. Applied Technology. Tailored Service. Creativity. Flexibility. These fundamentals reflect everything we do at Phoenix Logistics. We provide specialized support in locating and attaining the correct logistics solutions for every client we serve. Most logistic competitors work to win 3PL contracts, and then attempt to secure the real estate to support it. As an affiliate of giant industrial real estate firm Phoenix Investors, we can quickly secure real estate solutions across its portfolio or leverage its market and financial strength to quickly source and acquire real estate to meet our client’s need.