Four Ways the Internet of Things Will Transform the Supply Chain

Four Ways the Internet of Things Will Transform the Supply Chain

If there's a "quick win" to be had with IoT, it's in monitoring the performance and maintenance of industrial machines.

It was only a couple of years ago when people spoke about the Internet of Things (IoT) as if it were a mysterious superhero for business—it would rescue old traditional industries and set them on a new prosperous path—but no one knew how exactly it would work, or how to use it. We'd all talk about the moment, or year, or use case when IoT finally "hits" and goes mainstream.

Well, it hasn't quite panned out that way. Instead, slowly and quietly, IoT has started to seep into different parts of the manufacturing process. And everyone from airplane manufacturers to chemical companies are experimenting with use cases that advance the technology further. Observing these use cases, we can now extrapolate what IoT has in store for manufacturers.
Following are four ways IoT will reshape the supply chain for manufacturers.

1. Asset Performance Management

If there's a "quick win" to be had with IoT, it's with regards to the performance and maintenance of industrial machines. By equipping industrial machinery with sensors and connectivity, companies have been able to gather real-time data to better understand when certain equipment breaks down or needs maintenance. This has led to proactive maintenance and the smart-scheduling of workloads and workflow to optimize output and reliability.

IoT allows companies to use data to answer questions like: What piece of equipment is most likely to break down? How have various devices performed in the past? How much stress have they had? By correlating breakdown instances with external factors like weather conditions, manufacturers can discover patterns that can help them service equipment early, and avoid costly downtime.

The holistic goal of enterprise asset management becomes more achievable through the use of IoT.

2. Guaranteed Performance

The next logical extension of asset performance management is not just to prevent failures, but to ensure a certain level of performance. Selling guaranteed performance/uptime is an entirely new business model now made possible by the IoT. It allows traditional asset-based companies to become service companies.

Smart sensors in IoT equipment allow manufacturers to know what variables are involved in a given process, and affords them greater control over those variables. Real-time information can lead to proactive decision-making that can fine-tune operations for greater profitability.

3. Industrial IoT Apps

The app market for IoT has a lot of potential, not just for revenue, but to make IoT accessible to all sorts of industrial companies. Just like mobile apps took smartphones to the next level, making them incredibly useful in ways far beyond their original design, IoT apps will make IoT technology customizable and tailored for highly specific manufacturing functions.

Already, several cloud-based Industrial IoT platforms exist. As more customized applications develop, look to see these platforms become centralized data hubs that unify what were once disparate parts of the manufacturing and supply chain process.

4. Advanced Manufacturing Automation

Fully automated manufacturing and supply chain processes are the ultimate potential enabled by IoT. If asset performance management, guaranteed uptimes and custom apps are all developments that provide better visibility and insight into manufacturing processes, the next step is control.

Instead of information being pushed one way—from device to cloud-based analytics—the reverse flow of information enables devices to automatically adjust their operations based on conditions. IoT devices won't just be sources of information, but interconnected, remotely-adjustable extensions of intelligent manufacturing.

In the end, the holy grail of industrial manufacturing is to have a complete feedback loop between real-time information, analytics, command and control—sensing and responding all via interconnected data streams.

An End-to-End, Holistic Vision

Picture an order change coming into a manufacturer. It arrives via a cloud-based information platform, with an approval by the production manager. The request for changes goes straight to the factory's production equipment, located across the globe. These smart machines are equipped with chips and sensors that are networked together. Across vast distances, these machines talk to each other, assess one another's capacity, and coordinate with machines in other geographies to determine the most efficient method to produce the order change.

Big Data analytics take into consideration the existing workload, stress and capacity of equipment, the final destination of the goods, transportation costs, delivery times and overall profitability. Then, the entire system automatically optimizes operations, and begins altering production by pushing control changes right to the smart manufacturing equipment. Any further refinements made on-the-fly are updated across the entire supply chain, so that stakeholders halfway across the world immediately know that their changes are happening.

This end-to-end, holistic vision is what IoT brings to industry.

Many companies are already experimenting with portions of this long-term vision. And yet, for companies who still haven't begun, the biggest obstacle remains information-sharing infrastructure.

Companies often implement systems with their own four walls of enterprise in mind.

Sometimes, it goes further—restricted to a department or a division. But with today's manufacturing being complex and distributed, and with 80% of supply chain data residing with trading partners, companies need to start thinking of information flow as a multi-division, multi-enterprise problem.

This requires creating a data infrastructure that can connect all parts of a manufacturing supply chain together. Once that happens, piloting and experimenting with different IoT projects in smaller chunks becomes easier.

By 2025, the total global worth of IoT technology could reach up to $6.2 trillion. Businesses who don't want to lose out need to start gearing up now. 

Suhas Sreedhar is manager of supply chain and technology thought leadership at GT Nexus, an Infor company and a developer of a cloud-based supply chain collaboration platform.

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