Smart Supply Chain using Internet of Things (IOT)

1. INTRODUCTION
An ecosystem of physical devices connected via the internet is called Internet of Things
(IOT).Due to the great number of devices connected to the internet, IOT becomes a great topic of
talk. The things which form the grid of IOT are fitted with sensors and transmitters which collect
a vast amount of data and transfer it over the internet. As the things in IOT are connected over
the internet, today in this modern age, one can access this data from anywhere in the world. On
the accessing end, organizations and businesses are collecting and analyzing that data to inform a
variety of business decisions and operations. These things in IOT could be a sensor in a smart
home or a sensor which is installed to monitor air pollution, basically, the things in IOT are
objects that have been assigned an IP address and have the ability to collect and transfer data
over a network without manual assistance or intervention.

In the year 1999, an article published by Ashton said, “If there were to be autonomy with the
computers and they could learn and understand everything that is there to know about various
objects and phenomenon, by using the data collected without any human intervention, one could
track and count everything and reduce cost. If the computers had the ability to gather data and
take decisions they could also let us know when to replace, repair something on the shop floor.
Today we can say that IOT is a technology which precisely does what Ashton predicted about 20
years ago.

A large number of opportunities is available for digitalizing the Supply Chain of an organization
and provide optimal solutions that combine information, products and services digitally over the
internet. Cloud powered Supply Chain IOT ecosystems is predicted to be one of the greatest
beneficiaries of organizations.

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2. SCOPE OF IOT
Very few technologies today can capture a share in every walks of life, one such
technology is IOT. Machine-to-Machine communication (M2M) concept was given life by
IOT. IOT, when used in any given enterprise properly, could eliminate inefficient processes,
increase facility and infrastructure utilization, reduce cost and improve the productivity.

In this modern world, one can access the internet from any part of the globe which gives us an
for controlling the connected devices which are embedded into various objects and scenarios,
this ease of internet connectivity offers an opportunity for collecting more data from more
places, the challenge is to ensure safety and security of transmission. IOT also helps in home and
business automation.

2.1 IOT in Traffic Congestion and Transportation

Traffic congestion is a major issue due to which the time taken to reach our destination is high.
Already many taxi aggregating companies have implemented great connected platforms. Even
our cars and motorcycles could be a part of the IOT ecosystem used for traffic congestion. One
can use IOT and integrate the Google Map’s real-time traffic update service to the dashboard
displays of cars to give congestion information on various roads.

2.2 IOT in Agriculture

Agriculture could be defined as such a profession where one could lose a lot of money without
proper predictive systems (excluding natural disasters). In today’s environment, we also lack the
employee’s engagement in agriculture fields. IOT gives framers a great potential to control the
irrigation and various other parameters digitally. IOT could contribute significantly to meet these
challenges through better sensing and monitoring of production, including farm resource use,
crop development, animal behavior.

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2.3 IOT in Homes and Buildings

Home automation is where IOT is being used in homes and building, the use of sensors to
change the light intensity, change the thermostat temperature and so on. Smart assistants like
Google Assistant or Amazon Alexa software could be used for controlling the various devices
embedded with IOT technology. IOT can also be used for home security where a transmitter
based camera could be used to send the information and pictures of the person at the doorstep.
IOT has also crept into the consumer used machines such as washing machines and refrigerators
where the type of washing program or temperature could be changed based on the input given.

2.4 IOT in Smart Environment

A space in which a variety of smart devices are constantly and continuously working to make the
inhabitants more comfortable is called as a smart environment. With the use of IOT one could
track the air quality in real-time and check the pollution levels, IOT sensors which are used on
animals in form of collars can be used to track them or monitor what they are eating when they
are let out for grazing. IOT systems can also detect forest fires and rescue the environment.

2.5 IOT in Retail and Logistics

IOT in Retail and Logistics could be used for Track deliveries from the vendor to the
manufacturing facility using real time location information, track deliveries and materials around
your manufacturing facility by integrating IOT for autonomation, track deliveries and materials
inside your manufacturing facility, IOT can also be used for Kanban System and to monitor
sensitive goods to avoid damage or loss to mitigate risk. The scope of IOT is limitless, one can
say that in the future, IOT would be integrated in almost all the walks of life.

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3. ADVANTAGES OF IOT

Communication
Communication between devices, known as Machine-to-Machine (M2M) communication is the
core concept of IOT. Because of this, the physical devices are able to stay connected and hence
the total transparency is available with lesser inefficiencies and greater quality.

Automation and Control

Human intervention is completed nullified due to physical objects getting connected, able to
communicate with each other machines by themselves and also being controlled digitally leading
to automation.

Information
Better decisions are made with more information in hand. Due to a large amount of data could be
collected in an IOT ecosystem so the accuracy of decisions increases. Depending on the type of
IOT implementation, the decisions range from what to get at a grocery store to when to
understanding the quantity of inventory required.

Monitoring
IOT enables remote monitoring, having the knowledge of the exact quantity of supplies to be
ordered or knowing which roads are congested, could have a significant influence on one’s
decisions. Implementation of IOT in a refrigerator could inform us in advance what is inside it
and what is being used on a daily basis.

Time
A quite a large amount of time is saved by IOT, saved time equals saved money and also one
could use this saved time for optimizing the system.

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Efficient and Saves Time

The machine-to-machine interaction provides better efficiency, hence; accurate results can be
obtained fast. This results in saving valuable time. Instead of repeating the same tasks every day,
it enables people to do other creative jobs.

Saves Money
We can be alerted in case of possible bottlenecks, breakdowns, and damages to the system.
Hence, we can save money by using this technology. Optimum utilization of energy and
resources can be achieved by adopting this technology and keeping the devices under
surveillance.

Better Quality of Life

All the applications of this technology culminate in increased comfort, convenience, and better
management, thereby improving the quality of life.

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4. SUPPLY CHAIN AND THE INTERNET OF THINGS (IOT)

Flow of materials, goods, services and information is called as a supply chain. It is a network
which starts from a company’s suppliers to their customers going through the company for
purpose of distribution of specific goods and services. Moving the raw materials into the
organization , processing these materials aptly to produce a finished product and making sure
they reach and satisfy the customer requires a cross functional approach and supply chain’s
spectrum consists of all these applications

4.1 Limitations in Traditional Supply Chain

One of the greatest hurdles to operation success in enterprises, industries and institutions is sub-
par supply chain strategies such as-

Lack of Visibility
In traditional supply chain there is limit on vision through the stages of the supply chain, i.e. a
customer does not interface with a supplier. Inaccurate plans , wrong schedules and higher cost
are some of the issues the company faces due to lack of visibility.

Poor Response Times

Humans in a traditional supply chain send and receive information in a linear model from one
stage to another and could be communicated really slow. This decreases the responsiveness of
the supply chain.

Conflicting Priorities
A company’s supply chain is designed to align with the objectives of the company; although
there is alignment of the supply chain function with these objectives but traditional supply chains
does not have cohesion.

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Inefficient Fulfillment Model

The consumer requirements is really driving supply chain models forward, consumers are
demanding multiple channel access and the ability to purchase take delivery and pick up
anywhere and anytime. The traditional fulfillment model is too inefficient to handle this.

Inflexible Technology

In addition to fulfillment models, technology around other supply chain functions is also falling
behind an increasingly digital and technologically focused consumer experience.

Lack of Advanced Cross-Functional Skills

In traditional supply chains even though, the operational skills are defined to be cross functional,
they are not functioning in that manner. They are specific in function, this impacts the
operational efficiency.

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5. ENHANCED SUPPLY CHAIN USING IOT

IOT is set to revolutionize the supply chain with both operational efficiencies and revenue
opportunities made possible with just this type of transparency. In today’s market, supply chain
isn’t just a way to keep track of your product. It’s a way to gain an edge on your competitors and
even build your own brand. The following are a few areas where we’ll be seeing the most
advancement and change with the ever-advancing Industrial IOT.

5.1 Operational Efficiencies

When it comes to operational efficiencies, the IOT offers many:
 Asset Tracking: Tracking numbers and barcodes used to be the standard method for
managing goods throughout the supply chain. But with the IOT, those methods are no
longer the most expedient. New RFID and GPS sensors can track products “from floor to
store. At any point in time, manufacturers can use these sensors to gain granular data like
the temperature at which an item was stored, how long it spent in cargo, and even how
long it took to fly off the shelf. The type of data gained from the IOT can help companies
get a tighter grip on quality control, on-time deliveries, and product forecasting.

 Vendor Relations: Asset tracking provides data which is important and used by
companies for making their production schedules and supply procurement better and save
resources. This data could also be used for improving vendor relations and save money.
According to IBM, whose Watson AI technology used for supply chain, says that a large
value of a company’s products or services is derived from its suppliers. That’s a huge
incentive to pay closer attention to how your vendors are handling the supplies being sent
us, and how they are handling our product once it’s made. Higher quality goods mean
better relationships with customers and better customer retention overall.

 Forecasting and Inventory: When human resource is provided with the task of
inventory control there could be errors or inefficiency due to monotony, IOT sensors can
provide far more accurate inventories than humans can manage alone. For instance,
Using Wi-Fi robots to scan QR codes on its products to track and triage its orders. Being

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able to track your inventory including the supplies you have in stock for future
manufacturing at the click of a button. We would never miss a deadline again

 Connected Fleets: As the supply chain continues to grow upward and outward it’s even
more imperative to ensure that all the carriers from shipping containers, suppliers’
delivery trucks to your van out for delivery are connected. Again here the data is the prize
and the most important. Just like cities are using this data to get to emergencies quicker
or clear up traffic issues, manufacturers are using it to get better products to their
customers, faster.

 Scheduled Maintenance: IOT can also use smart sensors on its manufacturing floors to
manage planned and predictive maintenance and prevent down-time that can cost so
much.

5.2 Revenue Opportunities

The chance to know more and understand more about our customers, their buying habits, and the
trends associated with them is invaluable. It allows businesses to form tighter connections with
customers and, inevitably, market to them in new and better ways. Beyond the use of data for
improved efficiencies noted above, for instance, businesses can get creative with supply chain
transparency. They can build a reputation of social responsibility by allowing customers to
access and with AR, even see where their product came from, who made it, and the conditions in
which those workers lived. They can see who wore it whose celebrity hands may have touched it
which countries it may have traversed to reach their homes.

Now further supply chain is made efficient by the advent of newer technologies like block chain
and edge computing.

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6. LIMITATIONS OF IOT IN SUPPLY CHAIN

There is a great potential for loss of privacy with so many items talking to each other all the time.
If any organization does not have the potential to track people’s buying behavior and movement
then even what is being shipped or volume of goods being shipped must be considered a risk.

IOT is a complex system any failures in the system such as a bug in software or even power
failure could cause unprecedented miscommunication. Another problem with IOT in Supply
Chain is the fear of hackers from competition which would jeopardize our information safety.
Tagging and monitoring equipment does not have any sort of international standard for
compatibility between them. There is nothing new needed .The manufacturing companies of this
equipment just need to agree to a standard, such as Bluetooth, USB, etc.

6.1 Ensure benefits from IOT in Supply Chain

 Standards need to be in place for the format of data emanating from sensors. Without
standards it will not be possible to automate simple supply chain decisions.

 In order to achieve that automation, software will be needed to “execute automated,

event- driven decision making based on input from a variety of sensor systems.”

 Data from the sensors will also need to be exchanged via standard protocols; this will
ensure that all businesses will be able to have access without having to purchase
‘translation’ software.

 Data need to be shared universally, perhaps after being anonymized to protect

competitive advantage.

 Data will need to be available in real time via Cloud-based or mobile-to-mobile

applications. As noted above, security is crucial.

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6.2 Alternative way to implement IOT in Supply Chain using existing technology
According to Mitsubishi Road Map for IOT Supply Chain,
 Phones can scan barcodes, which is useful for picking, packing and put away operations
in the warehouse or DC.

 3rd party truck drivers arriving at distribution center yards can use the same type of
applications that are commonly used by airlines to expedite passenger check-in.

 Apps are also available for shippers to hire carriers, set pick-up appointments and update
shipment status which is something similar to Uber .

 Asset management is another area where the phone can function as a tracking device,
monitoring signals from objects near or far away

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7. CONCLUSION
As one could define supply chain to be a collection of all the individuals involved in
satisfying the customer demand, we can conclude that any reduction in cost in the supply
chain could profitable to any organizations , getting a competitive edge over the
competition is much to the organization’s advantage in this ever growing and ever
changing world. Internet of Things, a technology which could be used all walks of life to
gain numerous advantages when applied to the supply chain of an organization would
reduce confusion, damages and also would ensure better decisions are made. Certain
standards and security protocols should be used for the purpose of ensuring data security
and smooth integration of Supply Chain and IOT.

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8. REFERENCES

1. How IOT Will Impact the Supply Chain,

https://www.forbes.com/sites/danielnewman/2018/01/09/how-IOT-will-impact-the-supply-
chain/#4b35f6b23e37

2. Overview: SMART Supply Chain Solutions & their Benefits,

https://jktech.com/overview-smart-supply-chain-solutions-their-benefits/

3. 5 IOT Applications In Logistics & Supply Chain Management

https://www.airfinder.com/blog/iot-applications-in-logistics

4. Reinventing the Supply Chain using IOT

http://cloudtransformation.cio.com/article/reinventing-the-supply-chain-with-the-internet-of-
things/

5. Pros and Cons of IOT

https://www.linkedin.com/pulse/pros-cons-internet-things-iot-bhaskara-reddy-sannapureddy/

6. 5 ways the Internet will benefit the Supply Chain

https://www.gartner.com/smarterwithgartner/five-ways-the-internet-of-things-will-benefit-the-
supply-chain-2/

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