How will the new Smart Revolution revitalize supply chain management?
Read and learn about what comes with Industrialization 4.0 and what it means for Supply Chain management.
Just several decades ago the idea of robots replacing humans was but a mere flight of fancy, and yet today it's becoming more and more of a reality. The pace of innovation is brutal and unforgiving: previously difficult jobs managed by human hands are now being taken care of by the likes of artificial intelligence (AI) and the Internet of Things (IoT).
However, don't feel too discouraged yet. We still have many paths available to embrace the coming changes.
In the following post, we will be discussing what changes signify the new industrial revolution and how they will affect industries in the longer term. And in particular, how with the new Smart technology businesses can now track their products in real-time, monitor their supply chain operations, and make data-driven decisions to optimize their processes.
What is the Smart Revolution?
The Industrial Revolution was driven by scientific innovation, ever since the 1780s, when we first began switching from hand production methods to the use of machinery. In previous decades, the rate of innovation increased exponentially and we are already standing at the precipitate of the 4th stage of industrialization – the Smart Revolution.
But don’t get it wrong, electronics, IT, and automated production was already a thing since the 60s. What’s peculiar about this new stage is the development of cyber-physical systems, interconnected devices that allow even higher efficiency, "smart technology" if you will. We are talking about things like IoT, artificial intelligence, digital ledger technology, and many more. But it wouldn't be a total lie to say that IoT devices stand as one of the main drivers of the Smart Revolution.
The Internet of Things (IoT) is a new innovative technology that can completely reconstruct the way we do work, communicate, interact, and do business, and it will keep evolving at a fast pace.
Now you may feel inclined to ask, what is IoT exactly?
What’s deal with it and why is it mentioned everywhere in IT and business spaces?
Simply put, it is a network of physical devices built with sensors and/or software that exists to connect and exchange data between these devices and systems over the internet (or other communication networks).
Just in 2020, we had around 8.74 billion connected IoT devices and by 2030, this number is expected to increase up to 25.44 billion (FinancesOnline, 2023).
The functions of IoT devices are numerous. They include:
Real-time video and audio monitoring
Automatic identification of objects, etc.
Currently, the development of AI technology also added another layer of functions achievable by IoT. Things like speech recognition, computer vision, and automatic translation between languages are becoming readily available.
All of these make IoT very useful in tracking the condition of the products during transportation and transferring the information across the network. In fact, one of the industries that are particularly poised to benefit from it is Supply Chain Management.
IoT in Supply Chain Management
Supply chain management is a complex and dynamic process that involves the movement of goods and services from the point of origin (production stage) to the point of consumption. In the food industry, for example, the supply chain includes everything from farming, and manufacturing to packaging and transporting goods.
Now, where does IoT come from all of these?
Well, it's commonly known that supply chain management is a time-consuming and complicated process. The nature of the process involves many intermediaries, ranging from suppliers to producers to consumers, all of whom are not exempt from human error. Miscommunication, tardiness, and oversight are real things that happen in every business venture, and they can significantly stall the whole process of production and delivery.
With the introduction of IoT, however, the supply chain management process has become much more efficient already.
By using sensors, now we can track goods and products all the way from the point of origin to the point of consumption. Automatic monitoring of things like temperature, humidity, and other environmental factors that could affect the quality of the product means that we can make better decisions about the transportation and storage of these products. For instance, IoT sensors attached to a refrigerated truck could monitor the temperature of perishable goods and alert the driver or the central management system if there is a deviation from the ideal temperature. This information can be used to take corrective action and prevent spoilage of the goods.
Moreover, IoT can also help to improve the security of the supply chain. With connected devices, supply chain managers can monitor the movement of goods and products in real time, which can help them to identify any potential security risks. This means that they can take action quickly to prevent any loss or damage to goods.
Certain aspects of the supply chain process such as inventory management, order fulfillment, and shipping logistics all can be automated using IoT devices. This not only saves time and money but also reduces the likelihood of errors and improves overall efficiency.