The Internet of Things (IoT) refers to a network of smart software, sensors, and other devices that are connected via the internet and can send and receive data in real time. In the consumer world, IoT devices range from smart refrigerators and televisions to smart watches and cell phones. These devices continuously collect data, which can fuel the machine learning algorithms that make artificial intelligence (AI) smarter. These devices help to target ads, predict consumer behaviors, and much more.

In the supply chain, the Internet of Things—also sometimes referred to as the Industrial Internet of Things (IIoT)—serves a similar purpose for businesses. IoT technologies have become a cornerstone technology as companies try to build resilience and visibility into supply chains.

IoT and the Supply Chain

The IoT solutions used in the supply chain vary widely, with all of the various types of technologies coming together to form a cohesive network. The components that make up an IoT supply chain network may include, but are not limited to:

• Sensors
• GPS trackers
• RFID tags
• Artificial intelligence (AI) solutions
• Robotics

IoT technologies like these are playing a critical role in transforming the supply chain in a variety of ways.

Enhancing Visibility and Transparency

IoT solutions have been an essential part of improving visibility and transparency in the post-COVID supply chain. After a global pandemic shut down international supply lines, businesses now realize they need near-real-time or real-time views of the flow of goods in the supply chain to identify issues early and resolve problems before they spiral into disruptions.

GPS trackers allow shippers to monitor the location and health of goods in transit. This means that shippers know early if a shipment will be late, or if the cargo has spoiled.

Meanwhile, RFID helps warehouses improve inventory accuracy and cycle counts. With better inventory data, companies can avoid unexpected stockouts or overstocking, make more accurate forecasts, and more.

Enabling Automation

Reshoring continues to pick up speed in the United States as companies seek to shorten supply chains and bolster resilience. However, the U.S. manufacturing workforce has dwindled over decades of offshoring, leaving more than 600,000 manufacturing jobs open across the country.

Many believe that automation is the future of U.S. manufacturing and logistics, and fully automating processes requires the IoT. Smart sensors, robotics, drones, and artificial intelligence will be the backbone of industrial facilities across the supply chain over the next decade as facilities continue to automate more tasks.

Additionally, IoT sensors can help to drive other efficiencies in the supply chain. For example, sensors on equipment and vehicles can mitigate the risk of disruption by predicting maintenance needs long before something breaks down, virtually eliminating unexpected downtime.

Creating Efficiencies

IoT solutions already create countless efficiencies across the global supply chain. Here are some examples:

• Dynamic route optimization. Many cities and highways have IoT sensors that monitor traffic conditions. Logistics and transportation technologies can tap into this data to adjust routes in real time to avoid traffic and optimize fuel consumption.
• Facilities management. Warehouses and factories often use smart energy management systems to optimize energy usage and avoid unnecessary heating and cooling.
• Demand forecasting. When a company can’t sell its inventory, it must eventually be disposed of or destroyed. More accurate forecasting facilitated by IoT technologies helps to minimize waste.

Improving Security

IoT solutions have significantly improved security capabilities across the supply chain. For example, many facilities use RFID cards for access control to sensitive areas. GPS trackers can warn shippers if cargo deviates from its expected route. Sensors ensure the integrity of goods by tracking temperature, moisture, light exposure, and more.

Traditionally, shippers had to trust that cargo was properly cared for and would reach its destination. Now, however, IoT solutions give shippers a much more comprehensive set of data about goods as they move through the supply chain, often removing the necessity for trust from the equation entirely.

IoT helps businesses reduce costs, improve customer satisfaction, and stay ahead of the competition. As technology continues to evolve, the future of the supply chain will undoubtedly continue to be shaped by the next generation of innovations in IoT, making it crucial for businesses to embrace these advancements and adapt to the rapidly changing landscape.

About Phoenix Investors

Founded by Frank P. Crivello in 1994, Phoenix Investors and its affiliates (collectively “Phoenix”) are a leader in the acquisition, development, renovation, and repositioning of industrial facilities throughout the United States. Utilizing a disciplined investment approach and successful partnerships with institutional capital sources, corporations and public stakeholders, Phoenix has developed a proven track record of generating superior risk adjusted returns, while providing cost-efficient lease rates for its growing portfolio of national tenants. Its efforts inspire and drive the transformation and reinvigoration of the economic engines in the communities it serves. Phoenix continues to be defined by thoughtful relationships, sophisticated investment tools, cost efficient solutions, and a reputation for success.