Covid-19 has disrupted the supply chain globally, requiring fast action from logistics companies that want to continue driving growth through the pandemic. New technology will likely be a key resource for these businesses.
The Internet of Things (IoT) consists of smart devices that transfer and receive data over the internet. IoT sensors are a crucial part of what analysts are calling Industry 4.0, the current trend toward digitization in manufacturing and logistics.
This year, Industrial IoT (IIoT) devices have already significantly impacted how cutting-edge logistics operations approach their work. There are signs that these changes are just the beginning of a major transformation that will take place over the rest of this year.
Here's how the IoT will change the supply chain in 2020.
The Industrial Internet of Things Has Already Changed Logistics
One of the biggest changes so far has been the increased adoption of IoT-powered fleet management technology. With the right sensors, companies can collect real-time data on vehicle movement and share it between all involved parties.
Fleet management technology helps logistics companies with large fleets manage their vehicles in a way that promotes safety and sustainability. For example, one IoT sensor installed in a truck may track a handful of variables, like speed, location, acceleration and engine status. This data can be used to detect when vehicles are idling for too long — a valuable data point for businesses with trucks operating in cities that have restrictions on commercial vehicle idling.
Logistics companies are also using fleet management tech to optimize vehicle routes and reduce fuel spend. These additional capabilities can be helpful to strengthening an industry that has faced numerous weaknesses within its supply chains.
Data from IoT sensors in vehicles can also provide a bird's-eye view of the supply chain. As a result, IoT fleet management platforms provided logistics companies with information on how COVID was impacting the supply chain in the early days of the pandemic.
As Covid disrupted supply chain operations and social distancing became the norm, however, this changed. Supply chains were shocked by sudden and drastic shifts in demand. Overnight, customers' preferences changed. Demand for luxury goods crashed while demand for essentials — especially non-perishable food items — skyrocketed.
The data provided by IoT devices helped supply chain customers better understand the scale of the disruption and make more informed purchasing decisions.
IIoT Will Continue to Disrupt the Supply Chain Through 2020
The supply chain's IoT digitization will continue throughout the rest of the year. Pressured by tighter margins, many warehouse owners will likely begin integrating smart warehousing tech in the coming months.
For example, the Internet of Things may soon change how warehouses are lit and how companies control their lighting. A large number of smart, IoT-powered lighting systems can remotely control light-emitting diodes (LEDs). LED lighting is an energy-efficient light source that warehouses can use. A wireless IoT switch may be used to control a complex, multicolored LED lighting setup, providing visibility or a signal as necessary.
IoT tags can also be used to enable in-warehouse asset tracking, which can improve supply-wide data transparency. With the right solution in place, customers can track shipments in real-time, no matter where their items are in the supply chain. Radio frequency identification (RFID) tagging systems can also help companies better track assets while they're in-warehouse. As a result, these systems can reduce asset loss and improve warehouse efficiency.
As the number of IoT devices in warehouses grows, owners may also be pushed to adopt IoT management platforms that can coordinate and maintain these devices. Embracing more IoT tools could bolster the previous year's predictions of a 4.8 percent revenue increase in the manufacturing industry this year.
The Internet of Things may also improve information transparency across the supply chain. Data from tracking systems in the warehouse and on the road can let both logistics companies and customers know where shipments are at a moment's notice.
The Internet of Things Is Transforming the Supply Chain
The Internet of Things has already had a big impact on the supply chain. New fleet management technology, made possible by IoT sensors, is being used to track the flow of goods across the supply chain. Logistics companies are also using the tech to optimize fleet management — reducing idling, finding more efficient routes and decreasing fuel consumption.
The IoT's impact will likely grow over the rest of the year. Logistics companies may adopt new smart warehouse tech, like IoT-enabled asset tracking. This technology will improve data transparency across the supply chain, providing better information to logistics companies and their customers.