The coronavirus pandemic strained countries’ supply lines, forcing them to scramble to get critical supplies in. That was perhaps most evident in areas like sourcing personal protective equipment (PPE), a critical component of infection control strategies in healthcare settings. In most cases, domestic supply chains weren’t able to scale to meet domestic needs, and the sudden increase in demand also showed international suppliers weren’t always as reliable as might be expected.
Shortages can be caused by production line stoppages and supply chain inefficiencies due to a lack of insight. The health crisis illuminated something we already knew: insights based on IoT data have a key role in ensuring supply chain activities are anchored on trusted insights driving efficiency and responsiveness in times of crisis.
But while it seems an irrefutable fact that logistics companies should deploy IoT technology as fast as possible, those deployments must be carefully managed. Just before the pandemic, the Internet of Things (IoT) Business Index 2020, a survey and report launched by the Economist Intelligence Unit (EIU), reported that 28 percent of executives believed supply chain management and logistics benefited more from IoT enhancements than any other part of their business. We expect this percentage will rise, as the current projections for the global logistics market indicate growth of approximately 18 percent by 2021. The industry is already at the forefront of meeting the growing demand for PPE and finding innovative ways to distribute the supply of other essential commodities by using IoT.
Before the pandemic, the EIU report showed that the industrial sector was also benefiting from early IoT adoption, and currently, it is well-positioned to help meet consumer demand. Although global economic activity has decreased, the deployment of IoT-empowered automation technologies is increasing: Nearly half of the business leaders are accelerating plans to automate their businesses.
As the global business community grapples with questions over how to avoid supply chain bottlenecks, it’s worth examining some of the IoT-empowered tools companies are using to adopt new technologies and platforms and how these businesses are using precise and reliable data to build integrity across supply chains.
Shortening of the Supply Chain
Supply chains are dizzyingly complex and fragmented. All points along the chain require tremendous data management efforts — from fielding customer demand and working with raw material suppliers to producing components, order requests, and management and delivery service.
Before COVID-19, IoT brought together many parts of the supply chain to create a single product. For example, the world’s largest passenger airliner, the Airbus A380, contains 4 million parts produced by 1,500 companies from 30 countries. If there is a problem with the supply chain for just one of these parts, the creation of an entire fleet of airliners can be held up.
As the economy shifts toward more local production and distribution markets, the solution to fragmentation will need to lean toward creating simpler, more transparent supply chains rather than simply decreasing the number of parts per product.
Phil Skipper, head of business development at global IoT leader Vodafone Business believes that shortening the supply chain could allow smaller companies to bring their products to market faster. In contrast, larger enterprises will need to focus more on security and scale to manage countless streams of digital data to get real business outcomes. A shorter supply chain, says Skipper, allows companies to “restructure [their] process, but it also gives more control to execute [their plans] faster and more consistently.”
Smart Labels Mitigate Supply Chain Challenges
Even as more production goes local, global trade is necessary. Yet all too often, kinks along the supply chain prevent products from ever reaching markets.
Globally, billions of dollars worth of pharmaceutical products are shipped at improper temperatures. In contrast, other products either don’t arrive at their destinations until their use-by dates have expired or are not as-promised by suppliers. These problems aren’t just expensive for companies — they can be life-threatening for people reliant on the drugs.
Smart labels look just like normal adhesive postal labels. Still, their iSIM technology, consisting of a SIM, battery, antenna, microprocessor, and modem all integrated into a single chip, is specifically designed for low-power IoT devices. These smart labels connect via public mobile networks and provide continuous service from its power source. They allow companies to monitor products in real-time through the supply chain and take action when there is a problem. If, for example, a sudden change in temperature occurs, a notification is sent that triggers an alert to take corrective action or highlight an area for process improvement. Also, the smart labels can’t be removed from products without inhibiting their functionality, making them more tamper-proof, thereby ensuring the legitimacy of shipments.
Automation and Robotics Help Meet Customer Demand
In addition to creating ‘smart’ products that use data to alert companies to real-time problems in the supply chain, declining revenues due to the coronavirus crisis are forcing companies to accelerate investments in automation and robotics.
Even before the onset of the current pandemic, robots were already used to speed up production in warehouses operated by major companies. Amid the health crisis, venture capitalists have fueled this growth by injecting $36 million into AI firm Brain Corp. to increase automation in areas of the logistics industry that are struggling to meet consumer demand and handle human labor shortages. As more companies lean into automation, we can expect safer, more resilient supply chains.
Change Won’t Happen Overnight
For some years now, businesses have been looking at gaining a competitive advantage on process optimization, greater automation, and better use of data — collectively known as digital transformation. COVID-19 is simply accelerating these plans.
Amid the health crisis, we can expect more companies to meet global market demands while focusing on digital transformation to function in the new economic world order.