Smart Comes to Supply Chains: Giving You More Control, Less Expense

It feels like the Internet of Things (IoT) has been a long time coming to supply chains. But forget about incremental creep because one transportation sector is set to lead the charge toward the networked channel.

The big thing about any system of interrelated computing devices, of course, is its power to increase end-to-end visibility in the supply chain with the use of connected freight sensors that provide intelligence on shipping air, ground and water cargoes 24/7.

And the thing about having more visibility is that it gives you more control. That means improved efficiency and greater opportunities to minimize loss.

It’s the smart network, and it’s something that really changes the game.

Breaking Through the Barriers

So, why haven’t we heard about a lot more actual large-scale deployments of the Internet of Things? One barrier is, unsurprisingly, network security.

That issue came out ahead in a survey of enterprise customers conducted last year by experts at Bain & CompanyOpens a new window . Their research also found that respondents would be willing to acquire more IoT devices and pay more for them if their security concerns were addressed. (More on that point later).

Another issue has been cost. FedEx’s SenseAware system, for example, weighs in at around $150 for a one-off national delivery, which isn’t a trivial cost when you scale it up across multiple shipments. That gives cause for concern about your ROI.

It makes sense, then, that the enterprises most likely to be early IoT adopters are those with the most to gain financially.

Enter the cold chain.

According to a recent BCG studyOpens a new window , improved supply chain infrastructure and transportation efficiencies could reduce the amount of food waste globally from a value of $1.2 trillion a year to $270 billion.

The use of sensors in the supply chain to provide real-time tracking and monitoring of goods sensitive to even slight temperature changes could significantly reduce wastage and improve the bottom line.

The same applies to pharmaceuticals, where freight losses can turn out very costly – the industry loses an estimated $15 billion a year solely from temperature deviations during transportation.

Biopharma products, the fastest-growing part of the pharma market, are also highly sensitive items, as are biologics such as blood plasma products and vaccines. Maintaining a cold chain environment is vital. This is where an IoT smart network can count.

Controlling the Variables

Plus, those sensors are becoming ever more sophisticated, making smart, smarter still.

“Sniffer” devices in a reefer container keep a check on temperatures, as well as on other crucial variables such as humidity, light exposure, and barometric pressure, plus any incidents of shock. That gives shippers the ability to intervene, either via direct action or remotely through wireless connectivity, creating the opportunity to rescue cargo in potential peril.

Gathering actionable data at the edge has to be a good thing. But keeping that information to yourself is a bad one.

The optimum deployment of smart technology means not only using that extra intelligence effectively but sharing it with your partners, too. Shippers should avoid the temptation to keep that information in silos and instead should move to distribute it across connected communities.

That’s why the Port of Rotterdam, for one, has become a keen advocate of chain members sharing their data. It launched an IoT initiative, together with partners IBM and Cisco, to build what it hopes will be “the smartest port in the world,” with a view to improving the services it provides to all users.

Making Connected Devices Safer

Of course, thousands of connected devices and more sharing means addressing those widespread security concerns. A number of organizations are working on this, including the National Institute of Standards and Technology within the US Commerce Department. In June, it published its “Considerations for Managing Internet of Things Cybersecurity and Privacy Risks”Opens a new window report offering guidance on mitigating risks.

Also, the International Organization for Standardization has developed a new standard it says will help ensure that connected systems are “seamless, safer and far more resilient.”

The Internet of Things has been a long time coming. The big thing now is to make sure its benefits accrue to everyone along the chain.