CGN Edge Blog

IOT & Its Impact on Supply Chain Management

July 18, 2018 Posted by: Swapna Simhadri

The Internet of Things (IoT) is the network of physical devices, vehicles, home appliances, and other items embedded with electronics, software, sensors, actuators, and connectivity that enables these things to connect and exchange data.  This creates opportunities for more direct integration of the physical world into computer-based systems, resulting in efficiency improvements, economic benefits, and reduced human exertions.

The number of IOT devices is estimated to reach 30 billion devices by 2020.  The global market value of IOT is projected to reach $7.1 trillion by 2020.  According to Gartner, more than half of major new business processes and systems will incorporate some element of IOT by 2020.  The Internet of Things has become a hot topic across the business world, in part because of the sheer number of “things” being connected over the internet. These devices, including cars, industrial robots, washing machines, elevators or home thermostats, are being outfitted with sensors and connectivity that enable them to generate high volumes of data, and transmit via the internet to organizations on the receiving end, collecting and analyzing that data, to make a variety of decisions.


IOT is implemented in all kinds of industries, like agriculture, manufacturing, healthcare, across company-wide programs, like supply chain, smart home gadgets, and wearable devices.  Amazon’s Echo (Alexa), Home Thermostat Nest , Eco Bee,  Google Home, healthcare wearable devices like Fitbit, Microsoft’s Azure, connected cars like Tesla, BMW, as well as home automation and home security devices are all great examples of how IOT is implemented across industry boundaries. 

The Implementation of IOT cuts cost and reduces risk and complexity associated with managing millions of connected devices in large-scale disparate environments.

How IOT is Revolutionizing Supply Chain Management

Supply chain management is a foundational business process that impacts nearly every enterprise, from manufacturer, to transportation of finished goods, to the point of sale.  The following are some of the operational examples made possible through Industrial IOT and representations of IOT's impact on supply chain.

  • Asset Tracking: Based on RFID tags or global SIMs allow a supply chain manager to know the real-time location of a product, truck or shipping container. Identifying, locating, and determining the status of assets is the top function of IOT.
    • Better Insights into the whereabouts of shipments by using the sensors and avoid manual counting and human errors.
SC shipping
  • Fleet Management: Companies, like DHL or Fedex, use cloud platforms that are fed data from the fleet, along with traffic models, weather reports and other sources, to plot an efficient route to deliver packages to customers.
  • Network operators & Equipment Vendors: Data Analytics is a large portion of deriving supply chain efficiency from IOT. Companies like Verizon, IBM and Cisco are deriving supply chain efficiency from IOT, by establishing greater visibility into supply chain data and processes, leveraging cognitive technologies.
  • Manufacturing Maintenance: One area where supply chain IOT progress can be seen is within production facilities that integrate sensor networks into machinery, to increase up-times, reduce operational cost, and improve overall quality of service. IOT - driven solutions have the ability to aid the efforts of mobile and web applications to control real-time operations and visibility by collecting data, like temperature and equipment malfunctions.

Photographic instruments can now scan machine components, such as blades, to send alerts for predictive maintenance. Additionally, scanners can check raw materials for traits like paint color, alloy strength, or fabric composition, to confirm accuracy before they are used for a finished product. Higher up-times for manufacturing can be seen in production facilities that integrate sensor networks into machinery. 

Inventory Forecasting: IOT data provides critical information, changing the way manufacturing and distribution companies understand procurement operations.  For instance, transit or retail stock levels can be closely monitored, including 3PL distribution centers and warehouses, so companies can receive advance warning on any shipping error, reducing data-entry errors and prolonged cycle times. 

The collection of data intelligence, with pattern analysis over time, enables accurate forecasting and intervention, should faulty operations occur.  As a result, inventory planners, production and procurement managers can be better informed and equipped for executive decision-making on materials to hold, build, or buy, better and more accurate forecasting; by closely monitoring retail stock levels, through more reliable connections, between assets and end users, and using IOT to get data to time an item’s shelf line.

CGN Global utilizes its predictive analytics knowledge to help businesses win in the expanding IOT space, by driving collaborative and innovative, easy to manage, adaptive supply chain networks, connecting IOT to the business, providing a fast response to dynamic markets.

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