This technology can make the supply chain more efficient, more transparent, and give you a greater competitive advantage. Read on to learn how IoT can improve the supply chain.
How Can IoT Make the Supply Chain More Efficient?
For a start, IoT increases the level of automation in the supply chain. Automation generally has the effect of boosting efficiency because it reduces the amount of human involvement. To err, after all, is human.
That being said, IoT can help humans make better decisions. Trucks equipped with sensors could tell drivers what the best route is so they arrive as quickly as possible. That saves gas, which in turn leads to cost savings for a company.
Another way in which IoT can boost efficiency in the supply chain is through the procurement process. Raw materials equipped with sensors can tell you when they’re running low and then automatically reorder themselves (in the correct quantity). That saves you time and money – you’re not ordering more than you need because you’re panicked that you ran out of a critical component.
How Can IoT Make the Supply Chain More Transparent?
One of IoT’s benefits is that it gives manufacturers greater transparency into the supply chain. We’ll go back to the previous example of raw materials equipped with sensors. You no longer have to guess how many raw materials you have left – the sensor tells you with immediate and accurate results.
Sensors don’t just give you insight into raw materials. They allow you to track a shipment across the entire supply chain. You don’t have to worry if a shipment got lost or stolen, because you can see where it is at all times.
How Can IoT Provide a Competitive Advantage in the Supply Chain?
Some industry experts suggest that IoT can even give manufacturers a competitive edge in the supply chain. How so?
IoT can actually help you create a new business model. Instead of selling a product, you can sell a service when that product is IoT-enabled. The customer can gain access to more data than they’ve ever had previously.
Another competitive advantage IoT can provide is to help organizations make better decisions. Going back to the point made above, IoT gives you access to an unprecedented amount of information. You can gain insight into aspects of your business that you never thought possible. Your competitors not using IoT won’t be able to keep up when you can react quickly to changing market conditions and they can’t.
The use cases for IoT in the supply chain are growing. It’s not hard to see why – IoT has the potential to significantly improve the way the supply chain operates for manufacturers. It delivers efficiency gains, allows for greater transparency, and offers a competitive advantage that allows you to succeed in the market. The competitive advantage is especially important today in an increasingly crowded marketplace.