The digital exchange of all relevant data along the supply chain is becoming increasingly important. Transparency and seamless tracking opportunities are required for end-to-end process control. And further, the German Supply Chain Act places high demands on companies. For all those scenarios, the Internet of Things offers numerous opportunities to increase the efficiency and agility of the supply chain. Find out how IoT-based solutions can help companies minimize risks, reduce costs and optimize processes.
- IoT technologies increase supply chain agility
- Significant competitive advantages through IoT
- IoT technologies for seamless tracking in the digital supply chain
- Internet of Things: Security first
- IoT solution: Investment pays off
1. IoT technologies increase the agility of the supply chain
The digitized supply chain is becoming the new standard: After all, it enables the rapid exchange of relevant information, increases transparency for effective collaboration with all supply chain stakeholders, and it ensures an increase in daily productivity. In addition, to meet the requirements of the German Supply Chain Act, which has been in force since January 2023, end-to-end digitization and seamless tracking are required: companies are increasingly being assessed on whether they are meeting their environmental and social responsibilities, throughout the entire value chain – transparency thus becomes mandatory.
In order to maintain a precise overview of whether legal requirements and other agreements and regulations between contractual partners, such as delivery times or monitoring of goods, are being adhered to, the most complete possible digitization of the logistics processes is becoming a strategic advantage in almost every industry. The Internet of Things (IoT) offers a wide range of opportunities in this context to improve the efficiency and agility of the supply chain. In addition to sensor technologies, connectivity, machine learning and RFID, IoT cloud platforms are coming into focus: They create access to the necessary infrastructure and form an interface between devices, technology and data analysis – that way, for instance, routes can be tracked, inventories optimized, and costs reduced.
IoT also connects physical objects with virtual ones: With the help of IoT technologies, objects are given a digital identity by microprocessors, equipped with electronic intelligence and networked: They are thus able to send and receive data via the Internet and to accept and execute commands. The more assets are connected with each other, the better the overall process intelligence can unfold. This way, entire value chains can be self-organized, automated and designed more efficiently. In the process, artificial intelligence (AI) can provide companies with evaluations of data, which form a solid basis for decision-making in order to be able to act more efficiently and competitively.
2. Significant competitive advantages through IoT technologies
Studies prove that the Internet of Things is gaining importance. IoT platforms offer a sort of hub through which business partners and technologies are interconnected. Thus, companies benefit significantly from smart products and digital services in many respects: For example, real-time tracking and smart labels for identifying goods provide more agility in the supply chain. Likewise, smart warehousing through product detection and prioritization is also simplified by IoT solutions. In addition, smart containers and bins can uncover untapped potential, protect and track goods, and report delivery delays.
The advantages of IoT-based solutions at a glance:
- By viewing the data, companies can check whether legal requirements are being met
- Status tracking: Delivery times of the goods can be monitored
- Intelligent networking enables monitoring of the condition that critical goods are in during transport
- Blind spots in the supply chain and errors due to outdated, manual records can be avoided
- The greater the interconnectedness between assets, the more visible and traceable the processes become: This also helps in meeting commitments
- The data collected shows in which areas it is possible to operate more sustainably: This is how companies can save CO2 and make a contribution to climate and environmental protection
- For medicines, food and other perishable goods, IoT tracking can control the temperature during storage and transportation
- Smart warehouse management: Using IoT, all products in the warehouse can be recorded, identified as slow-movers or bestsellers, and prioritized accordingly.
3. IoT technologies for seamless tracking in the digital supply chain
To make the supply chain even more digital, IoT-based solutions for the tracking and networking of even non-electrified load carriers and items are becoming increasingly important.
Intelligent networking of objects and IT systems enables end-to-end tracking: All steps in the supply chain can be tracked and documented almost in real time. This can result in decisive competitive advantages in the long term, as the collected data creates the basis for uncovering weak points as quickly as possible. For example, if it is possible to track exactly where and in what condition a particular item is at any given time, it is possible to react more quickly and reschedule in the event of problems.
Best practice: Container tracking for more transparency and security
One example of the application of modern IoT technologies is container tracking via RFID transponders or Bluetooth Low Energy tags (BLE tags). Installed on the containers in a weatherproof and shockproof manner and identifiable by a unique number, the tags “communicate” with the company’s logistics system via the respective radio standard. As soon as a connection is established with the onboard unit of a vehicle, for example, data on the object and its location can be read out. The comprehensive data tracks of the containers facilitate dispatching, help to optimize transport routes, improve capacity utilization and save CO2. Industrial components or even foods can be traced back to their origin – a significant benefit with regard to the optimization and sustainability of the own supply chain.
Long since, intelligent containers have not only provided information about locations, temperatures or packing capacities. With the help of sensors, monitoring to protect against theft is also possible. In addition, interruptions in the planned sequence and delays in delivery can be detected at an early stage and incidents can be documented. In the future, containers and load carriers such as pallets could even organize their transport routes completely autonomously: In self-controlling supply chains, they communicate with each other via IoT networks. They send data in real time, which is available to all supply chain participants within a cloud environment, and independently communicate where they are and where the journey should go.
4. Internet of Things: Thinking about IT security right from the start
From spying on personal user data to deliberate acts of sabotage: By networking devices and assets on the Internet, there is always the risk of a cyber attack or unauthorized access from the outside. Therefore, in IoT-based solutions in supply chain management, cybersecurity should be considered from the outset. In this context, it is advisable to secure communication between devices through identification and access management in such a way that sensitive data is protected and processes cannot be manipulated. Firewalls or similar programs are necessary to protect the systems, and data sent over the public Internet should always be encrypted. Another security aspect is the regular maintenance and inspection of the systems in order to be able to detect errors quickly and eliminate weak points at an early stage.
5. IoT solution: Investment pays off
Secure processes in the warehouse, transparent flows of goods, efficient route planning and greater eco-efficiency: Seamless digital networking of the supply chain opens up numerous perspectives for sustainable supply chain management. In order to optimize processes in close collaboration with suppliers and minimize costs at the same time, the Internet of Things offers a variety of starting points and enables seamless communication between employees, processes and objects. IoT technologies incessantly collect data that provide important insights for process optimization. In this way, companies can save valuable resources and increase their efficiency in the long term.