How IoT is Changing the Face of Supply Chain Management
US companies are under continuing pressure to lower their costs in order to stay competitive. As part of this process, many are turning to IoT technology and developing new strategies to lower costs and boost efficiency. However, they perhaps do not yet realize the scale of the potential of IoT
Apart from the image being portrayed by bold start-ups heralding from Silicone Valley, there is growing research to suggest that most US based companies are actually very conservative. When they come up against extraneous pressure they often revert to type and attempt to bring their costs down.
IoT presents one of the biggest challenges of the decade to these companies. As it is technically and technologically complex, IoT comes with new regulations, processes and challenges to business relationships. Added to this, as it is an emergent technology with many companies working on the development of formats, it is still a relatively risky thing to invest in for a lot of companies.
Many are utilizing IoT with the focus on how it can bring down costs and boost efficiency. This is supported by a lot of evidence relating to how operations can be carried out with less manpower and at greater speeds. However, what many of these companies don’t realize is that IoT can transform their supply chain completely, allowing for a lot more innovation and differentiation.
Since the term entered the business vernacular in the early eighties, “supply chain” has always been understood as a linear process. Over time, they grew into comp ex networks, but the basic steps have remained to appear linear, from receiving materials to distributing them to consumers.
The value created by the supply chain depends largely on a businesses capacity to manage the many links and connections within it. Better products, faster production and cheaper costs are the pillars of a well functioning supply chain.
IoT can be a great boost to these processes, by providing the connection between the physical objects and the information they generate. Based on a closed loop of bits, IoT is creating a new, non-linear way to manage the previously linear process, bringing about a growth in the number of options available to managers who are seeking to get extra value from their supply chain. Collecting data from real world objects makes them instantly more manageable.