Supply Chain & IoT: Overcoming the Adoption Hurdles

Supply Chain & IoT: Overcoming the Adoption HurdlesIn our recent blog on the impact and capabilities that IoT Analytics brings to supply chain management, we talked about a range of use cases where the need for real-time visibility is being enabled by IoT Analytics.   Since we published that blog, several interesting articles and research reports have come across our radar.  Overall, we are clearly seeing an uptick in supply chain and IoT use cases and applications.

IoT Readiness Remains a Challenge for Many Industrial Supply Chains

In Supply Chain Management Review, Patrick Burnson discusses the results of a recent Industrial Internet of Things (IIoT) research study completed by The Business Performance Innovation (BPI) Network. The study surveyed 350 supply chain executives at large global enterprises such as Whirlpool, Airbus, Philips Lighting, and Hitachi.

Supply Chain intelligence and logistics are two of the top areas for new investment.  The most striking aspect of the survey was the large gap between the stated strategic focus of these organizations compared with the current state of their IoT operations and applications:

  • 90% of the respondents indicated that IoT is a strategic focus for their organization
  • But only 9% indicated that their particular industry has begun any kind of widespread adoption

The slow adoption is caused by a number of factors. A “skills gap” is cited as the primary reason by 51% of respondents. Better data and improved analytics (41%) and re-thinking traditional business models (33%) were additional critical challenges to gaining business value in IIoT and supply chain applications.

In the short run, these executives expect system integrators to be key players in IIoT supply chain applications as they can fill in the IoT skills gaps in in the enterprise. Over time, these organizations expect to improve their internal skill sets to lessen their dependence on integrators.

One result of the survey supports the increasing understanding of the importance of real-time analytics for IIoT. 47% of the respondents gave their companies an excellent or good rating on their ability to deploy and take advantage of applications that utilize real-time insights and systems monitoring.

IoT logistics technology gaining speed in freight industry – Real-Time Visibility

One supply chain use case gaining speed is managing the visibility of freight shipments and inventory.  While these organizations have tended to have a reputation for slow technology adoption in past cycles, that situation appears to be changing as these companies have begun to see the power of IoT to help them address their major challenges.   Chief among these challenges is freight visibility, which is a very manual and error-prone process today. Linda Rosencrance did a nice round-up of some of the fast moving developments in this key sub-sector in a recent piece in Tech Target.

Some of the specific new capabilities she cites in the context of real-time visibility include:

  • Overall, the introduction of devices which track the freight itself, not just orders.
  • Marine containers with built-in sensors that report worldwide continuously on key metrics such as temperature and weight.
  • Sensors on pallets that enable companies to track and trace products once they’re on trucks heading to their destinations.
  • A wide array of IoT logistics devices are also now being used by logistics companies to capture real-time weather reports that may impact shipments.
  • A connected vehicle can alert a dispatcher if it has been idling in one place for too long, which could mean it has broken down or that someone is tampering with it or its contents.
  • Warehouse managers leverage IoT sensors to know what goods are on hand and their locations. This provides real-time visibility into their inventories so they can take the necessary actions to move the right products to the right customers fast via their supply chain networks.

This list makes clear that logistics managers are now enjoying the benefits of sophisticated IoT sensors to provide end-to-end visibility for their supply chain networks.

The Accelerating Evolution of the Digital Supply Chain

Roberto Michel wrote an excellent piece recently in Logistics Management where he identified some of the key trends in Digital Supply Chains.  He leverages and cites the results of the Material Handling Institute’s recent annual industry research report. The majority of these trends involve the application of IoT and Analytics:

  • Merging IoT with app processes – software vendors are starting to do more to ensure that sensor data can be leveraged within applications.  He cites the example of transportation management systems that should be able to merge cold chain sensor information with shipment management to ensure proper handling of sensitive goods. Exception management is also critical to help operators filter out critical alerts from the large flow of data inherent in IoT.
  • Scenario-based planning leveraging IoT – the breadth of data gathering in IoT applications often gets a lot of attention, but “much of IoT’s value will come using that awareness to make better decisions,” says Joe Vernon, senior manager of North America supply chain technologies for Capgemini.  He describes contingency planning in cold chain scenarios as a prime example.  If goods have gone bad because of a temperature problem, planning and analytics systems can help trigger and drive the initiation and fulfillment of alternate shipments.
  • IoT, smart roads and predictive analytics – supply chain managers are also increasingly benefitting from the increased IoT sensor infrastructure to deal with traffic, weather, and road conditions in real-time.  These systems help to predict traffic snarls that can then be avoided to keep time-sensitive good flowing to their destinations.

Roberto finishes the article by pointing out that the adoption rate of various technologies and practices has increased dramatically from a Deloitte study.  Predictive analytics is now considered a potential change driver by 59% in the survey compared to two years when ago when it was at 38%.

Wrap-Up

This round-up of recent supply chain news and articles demonstrates the increasing realization of the power that IoT and Analytics is bringing to today’s supply chain managers.  The challenge now is to deploy integrated systems that can take advantage of the various hardware and software technologies to deliver tangible business value.  Vitria’s VIA IoT Analytics Platform represents a new generation of software platform that can help large organizations and their trading partners drive their supply chain management into this new generation.   Click here to learn more about how VIA can help.

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