IoT in SCM

Dr. A. Ramesh
Associate Professor
Department of Management Studies
 Agenda
• Need for efficient supply chain processes and the challenges faced in
traditional SCM
• The role of technology advancements in reshaping supply chain
management
• How IoT works in supply chain management
• IoT ecosystem in SCM
• Case studies

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Chronological Evolution of Logistics & Supply Chain
Concepts

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Importance of SCM for business operations

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 What is IoT?
• Network of physical objects—“things”—that
are embedded with sensors, software, and
other technologies for the purpose of
connecting and exchanging data with other
devices and systems over the internet.
• Range from ordinary household objects to
sophisticated industrial tools.
• No. of IoT connected devises 22 billion by
2025.

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What is the “Internet of Things“?

The IoT has three main parts:

1 2 3

The things, which are The network that The systems that process
embedded with sensors connect them data to/from the things

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 Why is Internet of Things (IoT) so important?
• Over the past few years, IoT has become
one of the most important technologies of
the 21st century.
• Now that we can connect everyday objects
—kitchen appliances, cars, thermostats,
baby monitors—to the internet via
embedded devices, seamless
communication is possible between
people, processes, and things.

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 Why is Internet of Things (IoT) so important?
• By means of low-cost computing, the cloud,
big data, analytics, and mobile technologies,
physical things can share and collect data
with minimal human intervention.
• In this hyperconnected world, digital
systems can record, monitor, and adjust
each interaction between connected things.
• The physical world meets the digital world
—and they cooperate.

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 What technologies have made IoT possible?
• Access to low-cost, low-power sensor technology.
– Affordable and reliable sensors are making IoT technology possible for more
manufacturers.
• Connectivity.
– A host of network protocols for the internet has made it easy to connect
sensors to the cloud and to other “things” for efficient data transfer.
• Cloud computing platforms.
– The increase in the availability of cloud platforms enables both businesses
and consumers to access the infrastructure they need to scale up without
actually having to manage it all.

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 What technologies have made IoT possible?
• Machine learning and analytics.
– With advances in machine learning and analytics, along with access to varied
and vast amounts of data stored in the cloud, businesses can gather insights
faster and more easily.
– The emergence of these allied technologies continues to push the
boundaries of IoT, and the data produced by IoT also feeds these
technologies.
• Conversational artificial intelligence (AI).
– Advances in neural networks have brought natural-language processing
(NLP) to IoT devices (such as digital personal assistants Alexa, Cortana, and
Siri) and made them appealing, affordable, and viable for home use.

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Traditional vs digitally enabled supply ecosystem

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Historical perspective of supply chain management

Logistics
Industry 4.0
 Some applications of IoT in supply chain management
• Fleets of cars, trucks, ships, and trains that carry
inventory can be rerouted based on weather
conditions, vehicle availability, or driver availability,
thanks to IoT sensor data.
• The inventory itself could also be equipped with
sensors for track-and-trace and temperature-control
monitoring.
• The food and beverage, flower, and pharmaceutical
industries often carry temperature-sensitive inventory
that would benefit greatly from IoT monitoring
applications that send alerts when temperatures rise or
fall to a level that threatens the product.

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The role of technology advancements in reshaping supply
chain management

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 Real-time Visibility and Tracking
• With the advent of technologies like
IoT, RFID, GPS, and advanced
sensors, supply chain managers now
have real-time visibility into the
movement of goods and assets
throughout the supply chain.
• This real-time tracking enables
better decision-making, reduces
delays, and improves overall supply
chain efficiency.

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 Data Analytics and Predictive Insights
• Big data analytics and machine learning
have revolutionized supply chain
management.
• By processing vast amounts of data from
multiple sources, businesses can gain
valuable insights into demand patterns,
inventory levels, transportation routes,
and other crucial aspects.
• Predictive analytics helps in proactive
decision-making and forecasting future
demand and supply trends.

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 Inventory Optimization
• Technology has made it easier to
optimize inventory levels.
• Inventory management software
and algorithms help in determining
the right stock levels, minimizing
excess inventory, and avoiding
stockouts.
• This leads to cost savings and
improved customer satisfaction.

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 Automation and Robotics
• Automation technologies, including
robotics and autonomous vehicles,
have transformed warehouse
operations and logistics.
• Automated processes reduce human
errors, speed up tasks, and enable
continuous operations, especially in
e-commerce fulfillment centers and
distribution centers.

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 Cloud Computing and Connectivity
• Cloud-based SCM solutions provide scalable and
flexible platforms to manage and collaborate
across the supply chain.
• Cloud technology facilitates real-time data
sharing, seamless integration of systems, and
accessibility from various devices, making it easier
for businesses to coordinate globally dispersed
supply chain activities.

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 Collaborative Platforms
• Technology has facilitated the
development of collaborative
platforms that connect
suppliers, manufacturers,
distributors, and retailers on a
single network.
• These platforms enable
seamless communication, data
sharing, and coordination,
leading to better collaboration
and optimized supply chain
processes.

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 E-commerce and Omnichannel Retailing
• E-commerce and omnichannel
retailing have disrupted traditional
supply chain models.
• Technology has enabled businesses
to manage multiple sales channels,
handle customer orders efficiently,
and provide seamless shopping
experiences across online and offline
channels.

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 Demand Sensing and Responsiveness
• Advanced technologies allow
businesses to sense and respond to
changes in demand more effectively.
• Demand sensing tools leverage real-
time data and analytics to identify
shifts in demand patterns and adjust
production and distribution
accordingly.

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 Risk Management and Resilience

• Technology has helped supply chains

become more resilient in the face of
disruptions.
• Supply chain risk management tools use
data analysis to identify potential risks and
vulnerabilities, enabling businesses to
develop contingency plans and mitigate
supply chain disruptions.

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How IoT works in supply chain management

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 IoT Devices and Sensors
• IoT devices, such as RFID tags, GPS
trackers, temperature sensors,
humidity sensors, and various
other types of sensors, are
attached to products, assets,
vehicles, and equipment involved
in the supply chain.
• These devices collect and monitor
data related to location, condition,
temperature, humidity, and other
relevant parameters.

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 Data Collection and Transmission
• The IoT devices continuously collect
data from the environment or the
items they are attached to.
• This data is then transmitted
wirelessly to centralized systems or
cloud platforms through various
connectivity options, such as Wi-Fi,
Bluetooth, LPWAN (Low Power Wide
Area Network), or cellular networks.

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 Cloud Computing and Edge Computing
• The data collected from IoT devices is
stored and processed either in the cloud
or at the edge (near the source of data
generation) using edge computing.
• Cloud platforms offer scalable storage
and computing capabilities, while edge
computing allows for real-time
processing and quick decision-making
without relying solely on centralized
cloud resources.

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 Data Analytics and Insights
• The vast amount of data generated
by IoT devices can be analyzed
using data analytics and machine
learning algorithms.
• These analytics provide valuable
insights into supply chain
performance, demand patterns,
inventory levels, and other critical
factors, allowing businesses to
make informed decisions and
optimize their operations.

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The integration of physical devices and digital technologies

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Key Components of IoT in SCM

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 Technologies for Logistics 4.0

Big Data

• List of records
• A system of interrelated • A field that treats ways to called blocks
• On-demand availability of
computing devices analyze, systematically • Linked
computer system
• extract information from using cryptography
Mechanical and digital resources,
machines provided with • Deal with data sets that • Each block contains
• Especially data storage
unique identifiers are too large or complex to cryptographic hash of
and computing power,
• be dealt with by traditional the previous block
Ability to transfer data without direct active
data-processing • A timestamp, and
over a network without management by the user
application software transaction data
requiring human-to-human
or human-to-computer
interaction
 Understanding the Concept of IoT Connectivity
• Sigfox
• NB-IoT (Narrowband IoT)
• LoRa (Long Range):
• Zigbee
• Wi-Fi and Bluetooth
• Cellular Networks/GSM

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Benefits of IoT in Supply Chain Management

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 Benefits of IoT in Supply Chain Management
• Real-Time Tracking and Visibility
• Enhanced Efficiency and Productivity
• Predictive Maintenance and Quality Control
• Improved Inventory Management and Optimization
• Automation and Autonomous Operations
• Data-Driven Decision Making
• Customer Experience and Satisfaction

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 Real-Time Tracking and Visibility
• Importance of real-time tracking in SCM
• How IoT enables better visibility throughout the supply chain
• Use cases of real-time tracking: from raw materials to end products

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Why real time tracking is important?

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Predictive Maintenance and IoT

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Predictive Maintenance and IoT

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Quality Control and IoT

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Quality Control and IoT

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Best practices and tools to leverage for ensuring quality
control through IoT solution development

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Inventory Management and Optimization

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Challenges in traditional inventory management

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How IoT data can optimize inventory levels and reduce stockouts

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Inventory forecasting using IoT analytics

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Popular brands that have implemented IoT for inventory
management

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 Supply Chain Automation
• Examples of automated processes, including
• Benefits and challenges of automation in SCM

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role of IoT in supply chain automation

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Autonomous and drones in supply chain management

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 Example 1: How the IoT is transforming supply chains

Big Steps To Fresh Hops

• Hops to be used in brewing “fresh hop” or

“wet hop” beers
• In other words, the hops are not dried in the
field but are shipped quickly for immediate
use in breweries
• But they’re also a volatile crop that must land
in a beer vat within 12 hours of harvest, or
else they start to go bad
• Too much heat and they start to smell like https://blogs.intel.com/iot/2018/02/06/how-rogue-ales-makes-a-g
compost reat-beer-from-wet-hops-clean-water-and-innovation/#gs.9qnw9
0
  Example 1: How the IoT is transforming supply chains
Big Steps To Fresh Hops
• With the help of sensors, now able to collect
temperature and humidity data on its shipments at
every stage between the hop yard and the brewery
• These sensors track each shipment’s location via
GPS and note whether temperature or humidity rise
above or fall below acceptable boundaries
• The end result is preserved product, thanks to data
that measures the condition of the crop through
every step in the chain
 Example 2: How the IoT is transforming supply chains
Union Pacific, On Track
• Any sort of equipment failure—a train derailment, for
example—can jeopardize the delivery of product, jack
up fleet replacement costs and negatively impact
worker safety
• Union Pacific—the largest railroad in the United States
—has introduced IoT as a valuable asset in monitoring
the reliability and condition of its equipment
• The company’s IoT-based system predicts equipment
failures and reduces derailment risks through an array
of acoustic and visual sensors on tracks
 Example 2: How the IoT is transforming supply chains

Union Pacific, On Track

• Sensor monitor the integrity of train wheels by sending

more than 20 million temperature readings per day to
the Union Pacific data center, which are then processed
via data analytics.
• On average, three railcars per day are found to exceed
safety thresholds and pulled out for inspection and
servicing: a huge step forward in preventing bearing-
related derailments, which can result in costly delays
and up to $40 million in damages per incident.
Example 3: How the IoT is transforming supply chains
Temperature Cold Chain
Supply chain control Management
(Refrigeration)

Cold Chains That Never

Lose Their Cool
 Example 3: How the IoT is transforming supply chains

Cold Chains That Never Lose Their Cool

• Shipments will always be vulnerable to
theft or accident, AI-powered predictive
analytics can provide forecasting based
on combinations of data that highlight
an increased risk
• These include weather + location, a rainy
day + low visibility, or a holiday + time of
the day with location
 Example 3: How the IoT is transforming supply chains
The Next Big Catch Via Blockchain
• The events of the next few years will see
connected logistics harnessing the power of
blockchain
• The decentralized digital ledger may be most
commonly associated with cryptocurrency,
but its applications go far beyond it
•  Hyperledger’s Sawtooth blockchain platform,
for example, works in tandem with the IoT to
improve the seafood supply chain from
ocean to table.
Example 3: How the IoT is transforming supply chains

The Next Big Catch Via Blockchain

• IoT sensors are affixed to harvested fish
to gauge shipping location, transport
temperature, movement, humidity and
more.
• Using “Hyperledger Sawtooth,” anyone
along the supply chain can track the fish
• Then the final buyer can access a
complete record of information and
trust that the information is accurate
and complete.
 Example 3: How the IoT is transforming supply chains

The Next Big Catch Via Blockchain

• Blockchain implementation allowed us to know for certain
– when the fisherman caught the fish,
– when they stored it,
– its temperature at any time,
– when it was inspected and
– exactly when it arrived at a restaurant.

https://www.forbes.com/sites/insights-inteliot/2018/12/04/from-automation-to-immediat
e-data-retail-and-marketings-high-tech-high-speed-seismic-shift/#747b39641dce
Applications

Source: Deloitte Analysis

 Applications Action
DATA
Perform preventive maintenance
Optimize driver route and vehicle Vehicle data: Location, fuel, harsh barking, etc.
utilization
Cargo data: Temperature, humidity, shock, etc.
Enable quick response to in-transist events
Driver data: Hours logged, driving patterns, etc
Ensure product quality and compliance with
handling

Insight
Track and correlate vehicle/driver Information
info
Driver aggregated,
Identify issues/events
organized and structured
Monitor operational metrics

Predict maintenance requirement

Source: Deloitte Analysis
Applications

Object: detect trucks with and without cargo

Measure congestion level for each specific lane

Notify the co-Ordinator and /or patroller when the

threshold is hit to trigger action

Source: Deloitte Analysis

 Security and Data Privacy
• Address security concerns related to IoT in SCM
• Best practices for securing IoT devices, data, and networks
• Data privacy considerations and compliance with regulations

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IoT security challenges

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Future Trends in IoT and SCM

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Challenges

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Thank you

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