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The Internet of Things in the Supply Chain

July 25, 2022


The Digital Age is all about connectivity and so is the emergence of the digital supply chain. Consumers expect to be connected to retailers. Retailers expect to be connected to manufacturers. Manufacturers expect to be connected to suppliers. And all of them expect to be connected to logistics providers transporting goods to and from various supply chain nodes. Ajay Rane, Vice President of Business Development at Sigfox, explains that the required connectivity is only possible when there is “proactive communication about the status of shipments.”[1] He adds, “Using sensors enabled by the internet of things (IoT), [stakeholders] can keep tabs on shipment whereabouts and conditions, enabling proactive communications to customers about the status of their orders.” Analysts at ModusLink add, “The IoT concept is aimed at providing a global interconnected network infrastructure for connecting objects to the cyber-physical world. It enables companies to track and trace their products which are equipped with sensor devices.”[2]


Supply chain IoT tools


The ModusLink staff identifies three main IoT tools being used in today’s supply chain operations: radio frequency identification (RFID); near field communication (NFC); and barcodes.


• RFID (radio-frequency identification): The ModusLink staff explains, “RFID is an electronic sensor and data collecting system using RF signals located on packages to monitor critical parameters such as temperatures, pressure, and vibration which captures and communicates data about how the products are moving along the supply chain and enable organizations to track and trace the product during its journey from manufacturer to customers. … Traditionally, inventory counts [have been] a complex exercise done manually about once a year but RFID technology enables retailers to monitor stock monthly bringing accuracy from 60% to over 90%.”


• NFC (near field communication): NFC, the ModusLink staff explains, “is non-contact near-field communication technology. An NFC reader is a tool that can be integrated into the warehouse management picking verification system. The benefits of using such technology [include the ability to connect] with a smartphone as a carrier for the logistics industry and [its ability to] optimize the management process with a low error rate increasing operability without sacrificing labor and resource efficiency. … Furthermore, it helps eliminate the paperwork and provides information about the inside of the package such as the location of the product inside the warehouse, description of the item, and the number of items inside the warehouse.”


• Barcode label: According to the ModusLink staff, “Plenty of operations happening inside the warehouse rely on administrative documentation. The use of barcodes … saves a lot of time for employees in [the] packing and picking process as they only need to scan the barcode and receive all the information needed on the requisite hardware to read them. The barcode label also benefits in managing inventory by being able to track the exact location and movements of products in and out of the warehouse facility as well as eliminating delays and error.” To learn more about the history of barcodes, read my article published on National Barcode Day.[3]


Although the ModusLink staff concentrates on the benefits of IoT in warehouse and inventory management, journalist Dan Robinson (@Dan89Robinson) notes real-time fleet management is “by far the largest and most mature use case across the IoT market.”[4] He explains, “real-time fleet management and telematics play a vital role in handling maintenance schedules, vehicle usage and suggested routes. Growing emphasis on energy savings, and reducing overall fleet budgets such as maintenance costs and fuel spend, is pushing the logistics operators to implement fleet management solutions to improve the efficiency and safety of fleet operations.”


Stefan Spendrup (@SpendrupStefan), Vice President of Sales for Northern and Western Europe at SOTI, reports there is another IoT revolution underway in supply operations involving robotics. Spendrup insists “the Internet of Robotic Things (IoRT) revolution” is “sweeping across the globe.”[5] He writes, “IoRT is a concept in which intelligent technology can monitor and manipulate the events happening around them by fusing their sensor data and making use of local conditions to decide on a particular course of action of how to behave or control objects in the physical world. Manufacturing and transportation and logistics companies have been pioneers of today’s IoRT revolution, leading the way to connect and automate industry operations.” When Spendrup discusses “intelligent technology,” he is talking about some form of artificial intelligence. Whether you’re talking IoT or IoRT, it should be clear that an ecosystem of sensors, connectivity, and analytics is involved.


IoT challenges


Rane insists, “Tracking and monitoring containers can only be accomplished if IoT devices are connected to a global network and can deliver the insights needed to help retailers and customers stay up to date.” Unfortunately, in many cases, not all tiers of a supply chain are connected. This lack of connectivity diminishes IoT effectiveness. One reason IoT connectivity has been impeded is cost. However, the staff at C3 Solutions reports, “[There have been] significant cost reductions in the costs of the technologies that make [the IoT] possible. The average price of sensors has fallen from US$1.30 in 2004 to $0.38 in 2019, for example. Likewise, the cost of data transfer dropped from $0.47 in 2014 to just 4 cents in 2019.”[6]


Although cost remains an issue, the greatest challenge to wider IoT implementation is security. Analysts from Cybellum explain, “Hackers are quickly recognizing that connected devices can be an easily compromised endpoint. Because they are often part of a larger system … devices can act as unwitting gateways. That’s why they are increasingly attracting hacker attention, exploited for intrusions and lateral movements throughout large networks, for exfiltration of the company’s data, or other malicious activity.”[7] And, they note, “The supply chain is attracting a lot of attention by suppliers, governments, and hackers — for good reason.”


Concluding Thoughts


Although IoT challenges shouldn’t be minimized, the upside of IoT connectivity for the supply chain is substantial. Rane concludes, “With greater visibility up and down the supply chain, organizations can set themselves on the path to operational efficiency, superior customer experiences, and a healthy bottom line. Whether [stakeholders] are adjusting to evolving demands stemming from the coronavirus, or trying to maintain their competitive standing, IoT can provide the insights needed to adjust course, while still delivering exceptional service at an affordable price.”


[1] Ajay Rane, “Why IoT Is Key to a Seamless Supply Chain,” SupplyChainBrain, 13 April 2020.
[2] Staff, “IOT Supply Chain Tools (Internet of Things),” ModusLink Blog, 9 March 2022.
[3] Stephen DeAngelis, “National Barcode Day,” 24 June 2022.
[4] Dan Robinson, “IoT in logistics: How connected tech is being adopted in warehouses, shipping and haulage,” NS Business, 23 August 2018.
[5] Stefan Spendrup, “The Internet of Robotic Things: How IoT and robotics are evolving to benefit the supply chain,” TechNative, 9 September 2020.
[6] Staff, “The Internet of Things and the Retail Industry,” C3’s Yard Management and Dock Scheduling Blog,” 28 July 2020.
[7] Cybellum, “3 Reasons Connected Devices are More Vulnerable than Ever,” Bleeping Computer, 13 April 2022.

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