MHI Solutions

Sustainability

7 WAYS IIOT IS MAKING SUPPLY CHAINS SMARTER AND MORE SUSTAINABLE

Companies Are Only Beginning to Leverage the Advantages, But the IIoT Is Already Producing Tangible Benefits for Many Corporations

By Carol Miller, MHI Vice President of Marketing and Communications

When the 2017 MHI Annual Industry Report, “Next-Generation Supply Chains: Digital, On-Demand and Always-On” was released last April, it included—for the first time—research and insight into the Internet of Things (IoT).

Defined by the report as “the use of the Internet to connect computing devices embedded in everyday objects, enabling them to send and receive data in real time,” 55 percent of respondents from corporations throughout the supply chain said IoT technologies would be a source of disruption or competitive advantage, while 33 percent said they would support ongoing improvements.

Within certain areas of supply chains, the Industrial Internet of Things (IIoT)—or the devices embedded within industrial equipment—already is making an impact on both operational intelligence and sustainability.

The data from those devices, including sensors and artificial intelligence (AI), is being sent in real time along expanded communications networks, connecting enterprises to their manufacturing and distribution facilities, suppliers and transportation providers. This enables faster, real-time analytics for predictive decision making, and even allows certain decisions to be made by the equipment itself based on pre-set parameters and sophisticated programming.

Ultimately, what IIoT creates is visibility. And having expanded views throughout all levels of a supply chain gives corporations greater control to mitigate the risk of disruption, says Prasad Satyavolu, chief digital officer and consulting leader in manufacturing and logistics at Cognizant, a digital consulting firm.

“The IIoT is enabling deeper visibility to minimize disruption in multiple ways,” he notes. “Manufacturers can take a closer look at production and transportation planning schedules from a variety of angles. IIoT constructs enable real-time risk assessments and allows managers to optimize their schedules more intelligently to avoid premium freight charges, overrun and overtime payments for labor, inventory mismatches, waste and scrap, damage to goods in transit, port congestion and unnecessary fuel consumption.”

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According to the recently released 2018 MHI Annual Industry Report, “Overcoming Barriers to NextGen Supply Chain Adoption,” eight out of ten survey respondents believe these supply chains will be the predominant model within just five years. However, the report found that the adoption of some of these technologies was slower than originally reported when MHI started the annual report in 2014. The report cites three top barriers to adoption of these technologies: 1. Making the business case for NextGen supply chain investments. 2. Tackling the supply chain skills gap and workforce shortage. 3. Building trust and security in digital, always-on supply chains. This issue of MHI Solutions focuses on the adoption of these digital solutions, from best practices in robotics and artificial intelligence to blockchain and innovations in last mile delivery.

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