This article for Manufacturing and Logistics IT Magazine discusses how the Internet of Things will help to develop intelligent supply chains in the future.

1. Creating intelligent supply chains
Feb 18, 2015 Critical Issues, Process Comments (0)
Mark Morley, Industry Marketing Director for Manufacturing at OpenText, looks at how the Internet of Things (IoT) has the potential to become one of the
most disruptive technologies to impact future supply chains.
Today's supply chains are in a state of transformation. The emergence of the connected or digital consumer is leading companies to place increased pressure on suppliers by
demanding greater customisation of products, swift delivery of goods and an experience that is smooth and seamless. As a result, supply chain operations are being placed at the
heart of delivering a superior customer experience.
To successfully facilitate changing consumer demand, it is becoming increasingly important to have end­to­end visibility of shipments across a supply chain. Businesses need to be
able to collect information about the physical location of shipments from the point of manufacture, across the distribution network and on to the point of delivery, so that they can
quickly fulfil orders with greater accuracy and efficiency.
In the past, it was important for organisations to understand the physical flow of goods based on information that had been manually entered into IT systems. However, this had the
potential to be inaccurate or out of date. Today, the introduction of IoT based technologies has the potential to transform end to end visibility across global supply chains. Billions of
connected devices associated with global supply chains will transform the amount of information that can track shipments in real time. Digital information coming from these
connected devices will drive increased levels of pervasive shipment visibility and this in turn will allow organisations to move towards more intelligent value chains.
Exponential Growth in Connected Devices
The exponential growth of connected devices holds the potential to revolutionise the exchange of digital information across the supply chain. Analyst firm IDC estimates there will be
200 billion connected devices by 2020, and Cisco estimates the market size at $14.4 trillion. IoT has many applications in the supply chain, for example warehouse stock levels can
be continually monitored so that stocks can be replenished whenever sensors detect a near out of stock situation. Alternatively 'tagged' goods in a warehouse can help to guide
pickers to their exact location using augmented reality technologies such as wearable devices. For example one German based automotive supplier has created a virtual supply
chain based on IoT technologies which is used to replicate the physical movement of goods from one of their plants. Each shipment has an RFID tag attached to it and these tags
can be read not just in the factory but whilst travelling across third party logistics networks to an end destination in real time.
SAP has built a supply chain demonstrator based on a connected vending machine, using their HANA based technology to monitor consumer buying trends. Not only can the
vending machine recognise each consumer, but based on previous purchasing history it can make real time suggestions for next purchases or offer tailored promotions. The
vending machine also monitors its stock levels and can automatically place orders for new stock to be delivered to the vending machine as required. With a global network of
connected vending machines, confectionery manufacturers for example can analyse consumer buying patterns, or trends across different regions around the world and then
optimise product mix for each machine based on hyper­local preferences.
In fact big data analytics is widely regarded as a key component of IoT based technologies as every company will need to find a way of analysing information coming from sensors
attached to connected devices. At the ARC Advisory Forum in Orlando in February 2015, the different applications of big data analytics in IoT was one of the key themes of the event.
From an aftermarket supply chain point of view, many of the sessions presented at the ARC forum had a heavy focus on how IoT can help companies implement predictive analytics
to help monitor the performance of remote equipment such as wind turbines or power generation equipment.

2. Emergence of a 'Digital Nervous System'
The key challenge moving forwards is how companies capture and analyse a whole host of critical information from a variety of products, appliances and equipment and then
communicate status updates and information as we approach the next phase in the evolution of the internet.
In this next phase of development, wireless and machine to machine technologies will help to connect globally dispersed machines and form the digital nervous system of the new
world. To be prepared, manufacturers need to create business networks that support disruptive technologies by synchronising the flow of data and transactions from different types
of sensors attached to logistics drones, 3D printers and even wearable technologies. Once a remote device captures information it will need to be transferred to other business
systems such as a cloud based B2B integration platforms or ERP environments. This automated flow of information into back end enterprise systems will significantly improve the
efficiency of tomorrow's supply chains.
In a global economy, the key challenges faced by organisations of all sizes are working seamlessly with trading partners located anywhere in the world and responding quickly to
any form of supply chain disruption. Moving forwards, the IoT will help to establish intelligent supply chains that potentially minimise disruptions to ordered goods, mitigate instances
of downtime and allows companies to scale their supply chains according to economic conditions or consumer demand.
About Us
Established in 1997, Manufacturing & Logistics IT Magazine (LogisticsIT.com) is the leading specialist IT solutions magazine and web­site covering all aspects
of end­to­end supply chains within a wide range of vertical markets. The editorial content covers real live applications within collaborative supply chain
environments and has contribution from leading vendors and research analysts. This provides our readers with an insight into how technological developments
enable all kinds of businesses to operate effectively and efficiently.
Copyright © 2015 Manufacturing & Logistics IT. Contact us Privacy policy