The Internet of Things (IoT) has become visible across many different settings and use cases. Networks of connected sensors have brought convenience to everyday life, powering everything from home automation to connected cars. IoT systems are designed to enable both data collection and analysis.

Beyond these headline-grabbing consumer applications, there exists another side of the IoT — the Industrial IoT (IIoT). Companies leverage IoT concepts on a large scale, using complex networks of sensors to keep a closer watch on every aspect of their operations. Areas like supply chain management fall under this umbrella, with leaders finding new ways to make data work for them.

What's the state of the IIoT?

As businesses worldwide see the value of IIoT implementations, the market is rising steadily. A recent MarketsandMarkets survey indicates the global IIoT space is worth $194.4 billion. At a compound annual growth rate of 8.1%, the market is projected to reach $286.3 billion by 2029.

Companies of all kinds are seeing potential to run more efficient operations and release their products at a higher volume. Especially among manufacturers, IIoT use is driven by this desire to become more prolific. IoT sensors enable these businesses to build quicker, more precise automated systems for increased productivity.

Of course, the growth of the IIoT space isn't entirely unfettered. Issues such as a lack of standardization and a need for software updates will require solutions. Organizations that are best able to address these challenges may be able to spin that adaptability into advantage in the years ahead.

Some parts of business operations seem like especially strong places to deploy more IoT sensors and capitalize on the new wealth of data they provide. This is the idea behind using the IoT in supply chain management. Businesses' shipments around the world are good candidates for in-depth analytics and the efficiency boosts that come along.

Why is the IoT so important in the supply chain?

The value proposition of IIoT in the supply chain is so strong because it affects more than one variable. Companies that excel at building sensor and data analysis networks into their logistics processes are poised to save time and money in several ways.

The general benefits of IoT in supply chain processes include:

• Real-time visibility of assets: Do companies know where objects are within their supply chains, or do workers have to go looking for them? This is one of the issues resolved by the addition of IoT technology.
  
  DHL specifies that using IoT sensors in warehouses and distribution centers — and attaching them to load-lifting robots — allows managers to know where objects are at all times. With such a level of visibility, employees can move around less and carry fewer heavy loads. The reduced physical exertion required of team members keeps them safer and happier.
  
  Real-time visibility, applied to the whole supply chain, is a classic efficiency booster. Manual activities associated with tracking down shipments are now streamlined and heavily automated. Employees and customers at all levels benefit from this more informed way of doing business.

• Process optimization up and down the supply chain: Eliminating waste from industrial processes is a major IoT focus point. With access to better, more immediate data via sensors, companies can become more precise in their planning and decision-making, and thus more efficient.
  
  There are a few ways the IoT increases efficiency, including more accurate and immediate picking and packing in retail, as well as inventory layout optimization. Companies that have access to data streams at the shipment level can make quick, accurate decisions about how to direct goods.
  
  Optimization can take many forms. Real-time information allows organizations to fill each container or vehicle so they're maximizing resource usage. They can also harness the information to speed up their fulfillment timelines.

• Proactive decision-making: Analytics systems based on rich data allow companies to stay one step ahead. With the help of strong predictive algorithms, leaders don't have to be reactive in their thinking — they can anticipate likely outcomes and be proactive, targeting maximum value.
  
  McKinsey & Company indicates that the kind of continuous improvement enabled by the real-time flows of IIoT data is often faster and less incremental than what was possible with legacy systems. This information and the analytically driven insights that come from it enable a more agile decision-making style.
  
  Various stakeholders within an organization each gain more ability to make impactful changes within specific domains. Relevant areas may include transportation, automated systems, maintenance, and many others. The best IoT systems will allow users to share data with the teams who can use it best.

• Sustainability and green operations: In some cases, rather than targeting general efficiency, companies are interested in affecting specific aspects of their operations. Reducing emissions and creating a cleaner, more sustainable supply chain is one such case, whether businesses are trying to get into compliance, please customers and shareholders, or independently embrace corporate citizenship.
  
  A few ways in which IIoT insights can boost green performance include maximizing routes for lower fuel consumption, receiving early warnings about potential spoilage, and opening up deeper insights into inefficient processes that are threatening green goals.
  
  As with any other aspect of an organization's strategy, sustainability efforts are more precise and targeted when they're driven by data. The real-time flow of information from the IIoT can indicate opportunities for improvement throughout the supply chain, not just allowing leaders to make their logistics processes greener and giving them immediate feedback on their progress.

Each organization has its own logistical needs and existing processes. This means there will be numerous specific routes to pursue those overarching goals.

IoT use cases in the supply chain

To demonstrate just how many roles the IoT can play in supply chain, it's worth exploring some of the prominent use cases for sensors and the data management and analytics tools that come along. These span multiple parts of the supply chain, from the back office to the warehouse floor, along with vehicles in motion as they carry shipping containers around the world.

Impactful applications include:

• Predictive maintenance: When companies implement predictive maintenance based on sensors attached to their vehicles and other heavy machinery, they can reduce downtime and prevent the expenses that come with unexpected breakdowns. IoT connectivity allows systems to be more efficient than would be possible with legacy scheduled maintenance approaches.
• Loss prevention: Businesses that track their shipments in transit — including through relatively simple devices such as radio-frequency identification (RFID) tags — gain powerful new levels of visibility. This can lessen waste, as there's less risk of inventory going missing. It can also act as a theft prevention or recovery method.
• Safety monitoring: Ensuring the safe operation of heavy machinery is easier when that equipment is constantly outputting a stream of data through IoT sensors. An automated asset with its performance and operating parameters being overseen constantly is safer to operate near than one without this data-based safety monitoring.
• Continuous improvement programs: Real-time data generated by IoT sensors within the supply chain can act as fuel for customer-facing improvements and service adjustments. This rich information allows companies to quickly identify the causes of inefficiencies and other issues causing friction with a company's audience.
• Warehouse automation: RFID tags and other more advanced sensors provide the data that drives warehouse automation systems. Robotic picking and packing systems can work with minimal input from human workers, creating major efficiencies in warehousing and distribution — but they need strong, accurate data. That information comes from the IoT systems.
• Safe and secure shipping: Rather than just saying where an item is, IoT sensors can also report on the condition of the goods. This might mean detecting temperature or moisture changes in a container to make sure perishable items are being kept in a suitable environment. By preventing items from arriving damaged, brands protect their bottom lines and keep their customers happier.
• Updates for customers: Keeping IoT data in-house is one way to use the information, but sharing it with end-users can add even more convenience. When customers are waiting for orders, companies can share the exact, up-to-the-moment location of those shipments. They can also send alerts when packages reach distribution centers or send warnings when condition sensors detect temperature changes, or even too much light, which might imply the container has been damaged.

At nearly every link of the supply chain, leaders can ask whether there's an opportunity to collect and use more data. From making proactive decisions internally to sharing real-time data externally, IoT sensors add a variety of new possibilities for businesses with various levels of logistics requirements.

Developing IIoT solutions for today's supply chains

A given company's engagement with the IIoT is only as strong as that business's hardware and software. Unreliable data naturally undermines efforts to build more effective supply chain management systems, as do weak or unsuitable analytics systems.

Increasing the focus on software design and development is a natural reaction to today's data-driven era for the supply chain and logistics as a whole. Companies that haven't previously thought about creating customized applications or infrastructure may now have to adapt and add these capabilities.

Working with experts who have put in hours working with advanced software design and development is a way to immediately add capacity and stay competitive as the supply chain digitizes. Transcenda can connect organizations with the perfect level of support, whether that means consultation or direct, hands-on support throughout the lifespan of an ambitious project.

Organizations that take this next step and develop the ability to analyze supply chain IoT data can operate in a more informed style. The added level of precision can represent a true competitive advantage — and with the IIoT only poised to expand, it's important to start engaging with the systems now.

Contact Transcenda to learn more about what we can do for your supply chain IoT project.