Logistics 4.0: The Impact of IOT on Supply Chain Management

Smart technology is slowly embedding itself in many business processes today, expediting different aspects of a company’s operations. The impact of smart tech also reaches logistics and supply chain management, and it’s all thanks to the Internet of Things (IoT).

The Internet of Things in Logistics

The IoT is the extension of internet connectivity with devices and everyday objects. This enables electronics and different hardware to communicate with each other and perform automated tasks. People can also remotely control or monitor IoT-enabled devices through the internet.

When e-commerce launched in the ’90s, the only role of logistics is to deliver goods from one place to another and to ensure that the products don’t sustain any damage in the whole process. But today, IoT has changed the landscape. The era of logistics 4.0 not only focuses on basic shipping and handling processes, it also puts a premium on efficiency, customer experience, sustainability, and competent service.

Logistics 4.0 entails the incorporation of IoT in supply chain management. This means using communication devices in containers, transportation systems, vehicles, and storage units, among others. This technology allows real-time data extraction, safer transportation, predictive maintenance, and integrated comprehensive security solutions. It also improves vehicle tracking, supply chain monitoring, process automation, and inventory management.

Improving Supply Chain Reliability

food processing technology

Most IoT systems reduce reliance on human labor, thus lowering the risks of human error. IoT-enabled devices have alert systems that inform technical teams immediately when any of the monitored data falls outside of the norm. These also remote update systems that automatically upgrade software when a new version is available, without the need for human intervention.

The IoT can also remedy some of the following common paint points in global logistics:

  • Lack of information on shipping conditions – Sensors installed in delivery trucks can monitor conditions throughout the entire duration of the shipping process. This is important especially for products that require specific shipping and storage conditions. For example, a meat shipping company may turn off the fridge right as it leaves the port to reduce energy costs and then turn it back on near the destination. When the conditions are checked at the endpoint, the temperature will be within the right parameters again, but the quality of the products may have been compromised.
  • Theft and pilferage – Supply chain theft amounts to $35-40 billion per year in the US. It may be difficult for manufacturers to determine where and when a theft occurred since shipment reports only arrive days or weeks after the products have arrived at the destination. IoT-enabled logistics providers can easily avoid this problem by installing smart hardware in warehouses, trucks, and ships to provide real-time updates on the shipping journey of goods.
  • Counterfeiting – Counterfeiting is still a prevalent problem in the supply chain. Counterfeiters can easily misappropriate brands, falsely label goods, or use fake or low-quality components to replicate a product. This can hurt the ability of manufacturers to sell because the consumers lack confidence in the legitimacy of their products. Manufacturers can avoid this by getting logistics providers who offer accurate tracking of shipping conditions while the goods are in their possession.

Smart technology and the IoT are continually changing different aspects of commerce. Businesses can leverage these technologies to improve and expedite their operations and provide better quality service to customers.