Introduction

The competitive pressure that rises in the modern world makes supply chains to be one of the key determinant factors in competitiveness. Since the IoT technology has extended the idea of interconnected systems to include physical objects, the supply chain has regained fertile and innovative ground that may represent a suitable environment for the application of the new methodology. This paper seeks to focus on the application of Io Things technology in supply chain management and the opportunities, risks and the prospects for the future of the technology (Ng, 2020).

 J. Peirce, A. Francesco, and I. Iron: ‘the Internet of Things: A Perspective on Supply Chain Management’

Internet of Things is defined as the concept whereby physical objects, embedded with technology are connected in a network format that enables them to receive, exchange and transmit information in real-time. In the domain of SCM, IoT is regarded as revolutionizes, because of full product visibility, improved effectiveness and analytical predictive capabilities. Sensors, RFID tags, GPS trackers etc are some of the connected devices with potential to be placed on products, vehicles, warehousing systems to track the location, status, condition of the goods at various phased of the supply chain.

Real time data is another primary advantage that Internet of Things has for supply chain management. This data enables the company to provide fact-based information relating to stock status, product flows and guarantee the merchandise is appropriately stored and transported. For instance temperature sensitive commodities like pharmaceuticals and perishable foods can be recorded for long to check the temperature at which they are expose to, and these are sensitive products that should not reach certain temperatures they get spoilt. Also, gadgets connected to IoT ensure real-time tracking of shipments so that routes can be improved, and delivery times minimized (Rafique, 2020).

Enhancing Efficiency through Automation

IoT technology also helps automating some of the supply chain activities hence reducing the dependency on man and hence also reducing chances of errors in the supply chain system. Smart systems on their part can be programmed to draw on data from IoT devices to initiate processes like restocking, changes in the production line, or to redirect consignments. First, this level of automation optimizes processes but also provides a possibility to work more flexibly in terms of immediate changes in demand or supply chain damages (Dweekat, 2017).

For instance, keeping an eye on manufacturing equipment, IoT sensors can indicate when the tools and equipment are due for a checkup or replacement. A sensor on a machine, for example, can promptly alert maintenance personnel of a problem of any kind or simply stop the machine, if it thinks that it is running outside its correct parameters. This approach of maintenance prevents damages on the machinery and general wearing out, hence saving costs of repairs, and additional benefits of increased efficiency in the long run.

In warehousing, the use IoT in automation of the placement and the locations from where goods can be accessed efficiently can be achieved. Self-driven vehicles such as the automated guided vehicles (AGVs) and robotic systems can locate stocks, pick as well as place items, and even control stocks depending on the information retained by the IoT sensors. This replaces the need for manpower that often slows the order processing, therefore, enabling companies to satisfactorily meet their consumption market needs (Bi, 2018).

 Data-Driven Decision Making

Possibly the most important benefit of IoT technology in supply chain is the utilization of data for decision making. With so much data produced by IoT, it is possible to employ data analysis to plan and to look at patterns and trends, which will help the supply chain companies to make changes towards efficient processes.

Using analysis of IoT data, companies can be able to predict the demand and this may assist in purchasing and supplying the market based on IoT data analysis. This kind of information helps business organizations to see in advance that demand is likely to rise and fall in the future, that there may be an interruption in the supply chain, and possible changes to tackle them. It is also effective in the elimination of costs associated with excess stock/ inventory as well as storage of the same (Haddud, 2017).

In addition, it was established that IoT data can be employed to improve cooperation and interaction within supply chain networks. By providing timely information to its suppliers, manufacturers and logistics service providers, the companies are in a position to establish or synchronize, the goals of all the employees who are involved in the project. This level of transparency and collaboration minimize the problem of communication breakdown, delays, and other inefficiencies, thus creating a more flexible supply chain (Boyes, 2018).

Challenges and Considerations

On the same note, there are issues that have to do with IoT technology applied in supply chain management with the following being worth to note; the first trend is reasonably obvious and still remains one of the major concerns, namely data security and privacy. One weakness of IoT devices is that the massive amount of data that produced is always at risk of being hacked leading to a loss of important information and needed supply chain solutions. They are; encryption, authentication, and security auditing; to eliminate these risks, security measures must be reaffirmed for use by companies (Borgia, 2019).

A second issue particular to the IoT is how this new technology is to interface with existing supply chain systems and structures. A lot of firms established their networks long before IoT, and this means these networks may not support IoT devices hence costly upgrades. Further, it may disrupt current operational techniques, this being ill-suited for organizations that are slow to adapt to such change (Wamba, 2019).

Even the cost implications need to be put into consideration especially the cost of putting in place IoT technology. It is therefore evident that adoption of IoT in SCM is beneficial in the long-run however the cost that is incurred in acquiring IoT devices and software as well as the infrastructure is high at the initial stage. IoT technology must be implemented in a way that achieves strategic objective and it is the responsibility of companies to adapt and understand that strategic approach to IoT may well take time before it delivers the expected returns on investment.

The Future of IoT in Supply Chain Management.

The market for supply chain IoT is expected to grow in the next few years due to the enhancement of connectivity in IoT system, data analytics and automation. Future studies will melt with the IoT devices in delivering better visibility, efficiency as well as decision making to companies hence unveiling the above supply chain integration models more to the practicing organizations (Papert, 2017).

 Another of the significant factors of the future of IoT in supply chain management is smart supply chain. These supply chains use IoT technology, AI, and machine learning to develop supply chain systems that are self-correction mechanisms that can respond to real-time changes. For instance, smart supply chains can make the number of production changes, based on real-time data on the demand; it can also change the routes to supply in their networks in response to traffic information; and finally, smart supply chains can also determine the appropriate levels of inventory to hold, in order to optimize on costs as well as service requirements.

Conclusion

Hence, the adoption of IoT technology in the SCM has vast margins that involves optimization of the functions in addition to the availability of data that can support decision making. Although there are problems, such as the security and integration of data as well as the costs of IoT, the potential advantages to supply chain management cannot be dismissed. It maintains that as the technology world advances, companies that engage in IoT will be well-placed to contend with the much obscured and competitive environment globally. As we speak, the future of supply chain management is in making supply chains smart, responsive, and therefore future ready through the use of IoT (Frank, 2019).

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References

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