By Drew Robb
The supply chain is getting a lot smarter, thanks to the Internet of Things (IoT). This added intelligence results in lower costs and added efficiency for companies like General Motors and Whirlpool.
Passive sensors in the supply chain are being replaced with more intelligent versions which put companies in a better position to exert more control over the external environment and ultimately execute better decisions, said Noha Tohamy, a Gartner analyst. For example, IoT-enabled factory equipment will be able to transmit temperature and machine utilization parameters, change equipment settings and optimize process workflows to raise overall supply chain performance and efficiency.
IoT in the Warehouse and on the Factory Floor
One example is GM's Plant Floor Controls Network, which utilizes Cisco's IoT technology. Sensors installed throughout GM's manufacturing plants measure building humidity and adjust the assembly line so cars are not painted in overly humid conditions, which impairs paint quality. Cisco reckons reductions in repainting have saved GM millions.
Manufacturing and logistics are in the forefront of the push for an IoT-enabled supply chain. An injection molding company, for example, has set up its parts "crib" (or bin) on its shop floor, networked it with its xTuple ERP system and connected it to vendor systems for stock replenishment as a way to remove human interaction, and to keep work flowing and customer demand supplied, said Wally Tonra, vice president of Sales at xTuple.
He thinks IoT's impact will be felt in three key areas: making a profit, keeping product on the shelf and staying compliant with certifications and regulations. This encompasses areas such as inventory flow, factory climate conditions, the detection of the presence of allergens, product shrinkage, equipment monitoring/tracking, delivery, stock/ingredient/component replenishment, inventory control, product lifetime expiration dates and maintenance.
"The biggest challenge of integrating IoT with existing supply chain systems such as a company's ERP is to stay focused on the business goal and implement those integrations that will fulfill the overall needs of the specific business," Tonra said.
IoT and the Little Guy
While companies like GM and Whirlpool are already heavily invested in IoT, other large companies will take a more conservative approach. This opens the door to increased competition from small companies and startups eager to embrace IoT.
"The Internet of Things gives managers, especially manufacturers and distributors in the supply chain, the visibility and data to outthink, outsmart and outperform their competition," said Tonra. "When IoT is brought to scale by small- and mid-sized business, they can become competitive with the behemoths in their industry."
Drew Robb is a freelance writer specializing in technology and engineering. Currently living in Florida, he is originally from Scotland, where he received a degree in geology and geography from the University of Strathclyde. He is the author of Server Disk Management in a Windows Environment (CRC Press).