How the Internet of Things is Profoundly Impacting Supply Chains

Supply chains are becoming more responsive thanks to IoT, (Internet of Things) which provides autonomous, real-time insight into all aspects of your operation.

A recently published report by Cisco and DHL suggests that IoT is set to provide a $1.9 Trillion shot in the arm to for the Logistics and Supply Chain industries. The report forecasts that 50 billion internet connected devices will be integrated by 2020, up from the current number of 15 billion. Most of the development will be seen in transportation and warehousing. In this article we will look at the transportation innovations.

The recent moves toward omni-channel fulfillment is a tectonic shift for the supply chain industry. The pressure coming from customers to deliver goods more efficiently is being met by the industry through technological innovation. Consumers now demand instant gratification; this means convenience of purchase is at the very center of companies’ plans, with the objective being a simple transaction, and for companies such as Amazon, delivering items on the day that they are ordered. This level of demand for an enhanced experience means that IT systems within corporations are becoming the focus of change and innovation. Those companies are taking the lead by innovating and transforming the supply chain via the augmentation of their existing IT infrastructure.

Adapting to these levels of pressure has pushed the supply chain to near breaking point. Innovation is only being made as part of long-term multi million dollar investment plans in conjunction with a major software company, while the increase in customer demand is immediate.

What’s required is a transformation in thinking, and the integration of previously unseen levels of innovation.

What is going on can be compared to a householders approach to home security. Would they hire a security guard, or instead seek to install a home security device? Unless you can afford to pay the security guards salary, it is evident that in the majority of cases householders will take the latter option, provided by a large home security company. They will provide all the devices including computer hardware and software that is networked to their responsive home security infrastructure, and a relatively small team of operatives will monitor the system.

Logistics companies are achieving the same level of operational efficiency on larger scale, by employing 3rd party providers.




Register for EF5