The IoT: a means for a tangible, intelligible future. Are you ready?
It’s reach, velocity, and capabilities have already, and will continue to, transform the way modern businesses function within the digital global market landscape.
The IoT has become a trendy topic of discussion in regards to how businesses create strategies. Utilization of the IoT increases value from the bottom-line (operational value) to the top (strategic value and revenue return).
Since this is Kodiak Community, and we talk all things supply chain, we’d like to dive into the depths of the internet-of-things, and get lost in it’s illustrious vortex of reliable data.
Before we can understand the utility, the IoT can bring to the world of supply chain management, we must place a definition on the term!
What is the IoT; really?
After scouring the Internet, I found a plethora of definitions for the internet-of-things.
One eventually stood out, in the crowd of hundreds.
“A global network infrastructure, linking physical and virtual objects through the exploitation of data capture and communication capabilities. This infrastructure includes existing and evolving Internet and network developments. It will offer specific object-identification, sensor and connection capability as the basis for the development of independent cooperative services and applications. These will be characterized by a high degree of autonomous data capture, event transfer, network connectivity and interoperability.” (rfidglobal.eu)
The area of this definition that jumped out at me was the use of the word “network”. To me, a network is typically built as a means of interconnectivity; a platform created for involvement and innovation.
If you haven’t heard about the IoT before this blog post, this would be the time to come out from your dial-up rock you’ve been cozying-up under.
Market research has predicted that the worldwide spending on the IoT will grow to $1.3 trillion by 2019.
How does the IoT affect Supply Chain Strategies?
Global supply chains are fast moving, ever changing and prone to risk-exposure.
The IoT can be utilized to slow things down, speed things up or keep things just right. That’s the beauty of the IoT. It’s infrastructure is built to develop around the needs of those using it’s capabilities.
This kind of intelligence may seem intimidating at its surface, but understanding it’s benefactors should outweigh the trepidation. Optimizing the deployment of the IoT in your supply chain could create a whole new standard for efficiency.
Improve Communication with suppliers.
Gaining regular visibility and communication with suppliers in your external supply chain can be the cause of many headaches.
Communication, when backed by IoT, puts you in the driver seat as an individual seeking supplier compliance (for example). Many softwares and applications for SRM (supplier relationship management) strategies have implemented communication platforms to nurture the buyer-supplier relationship. These systems typically include features such as document sharing bases, email tracking and contact compilation for streamlined supplier contact and communication. All of which is stored in the IoT.
Better communication; better supplier governance.
Logistics tracking and automation have become large players in today’s global supply chains.
Real time data gathering of shipping information through the IoT is taking the knowledge and transparency of logistics to a whole new plateau. This is crucial during both the operational functionalities involved in the shipping/delivery process, but also the ability to reevaluate and reposition overall logistic strategies (routes, packaging, method of delivery etc.).
This kind of visibility is made possible by the interconnectivity of physical, and non-physical, analytical devices that are under the IoT umbrella.
“All told, these diverse and interconnected entities will give corporate managers real-time, end-to-end visibility and control across their supply chains. (CIO)”
See how Maersk Line has utilized the IoT to help strengthen their global supply chain, by understanding their logistical analytics of millions of shipping containers:
Building Supplier Trust
“A relationship management scenario for wearable products designed to increase awareness of personal health and wellbeing is unlike any traditional RM context and raises important issues for consideration. (Garry 2016)”
The interpretation of this statement could go two ways.
1. The IoT builds a basis for false trust, being that the utilization of wearable products or imbedded data gathering devices are used under the pretenses of distrust.
2. The IoT sets a precedent for the transparency and trust, in the buyer-supplier relationship, before there is any need for intervening relationship management.
As an optimist, and a fan of the IoT, I like to interpret the connectivity capability between buyer-supplier as a right rather than wrong.
To second my opinion, I believe the optimization of visibility in the buyer-supplier relationship can lead to better compliance and more sustainable business practices.
Besides, in the end, the real beneficiaries of streamlining buyer-supplier relationship trust through the IoT are consumers and society at large.
When business is able to innovate, practice transparency, visibility and sustainability because of better intelligence, it’s not just building the richness of their supply chains. This builds the richness of product quality, which reciprocates the notion of excellence to consumers.
Smart supply chains are sustainable supply chains.
The IoT isn’t just the Internet-of-Things it’s a means for a more intelligible future.
Until next week.
This publication is brought to you by author Sam Jenks, but also on part by Kodiak Rating — A Supplier Relationship Management SaaS functioning out of Stockholm, Sweden. Kodiak Community intends to challenge traditional business practices with innovative thinking and creation.