Strategy

Connecting the supply chain

By Leo Yeung, Vice President, Business Network, Asia Pacific at OpenText

Although the core concept of the Internet of Things (IoT) has been around for several years, there is still a long way to go before we truly unlock its full potential. IoT has been applied across different industries improving connectivity and enhancing processes.

If harnessed effectively, IoT has enormous potential in transforming a standard supply chain into an intelligent and connected one, creating new wealth avenues for businesses.  

In today’s day and age, consumers now expect to have what they want, when, where and how they want it – businesses need to be on the front foot, using connected technology to help meet and exceed customer demands. This is key in supply chain and logistics, with many businesses relying on their partners to help deliver goods and services to customers in a timely manner.

So what role can IoT play in improving overall processes and meet customer expectations, today and in the future?

In order to gain value from IoT devices, organisations need to be able to effectively manage and interpret data. An organisation that does so can pinpoint certain factors within the supply chain that need improvement. Take for example the tracking of inventory. With connected devices, stock can automatically be counted and ordered, eliminating the need for manual inventory procedures, which can sometimes take days.

The use of IoT devices extends beyond just inventory checking – the latest technology is also able to provide granular information that can heavily impact a business. In the instance of food in the supply chain, knowing the storage temperature and length of time in transit is vital.

Having access to this data in real time and having the skills to effectively analyse it, can mean the difference between a restaurant or grocery store ordering too much which would eventually go to waste and be thrown away; thus, saving the company time and money.

Taking this a step further, a customer-focused operating model, with a well-managed, connected supply chain can help businesses gain both an ‘inside-out’ view of what products need to be readily available to meet customer demand, and also the ‘outside-in’ insight into what customers want and need to buy. Automation, data collection and data processing have huge roles to play here, all of which can be enhanced by IoT.

The impact when organisations get this wrong can be significant. Take a recent example of the UK division of a global fast food chain, which changed logistics carriers for delivering chicken to its restaurants. The change went wrong and as a result, no chicken was delivered to the restaurants – much to the customers dismay.

Not only did the company lose revenue because customers couldn’t buy what they want, they also faced brand and reputational issues with customers taking to social media to vent their frustration.   

This is all avoidable. Managing the supply chain is not just about gaining efficiencies. It is about understanding how to manage it to meet customer demand when they need it. This can only be done with a connected and intelligent supply chain.

So, what does this look like in reality? Think about a situation such as the restocking of a vending machine. In a connected and intelligent supply chain the vending machine is IoT-enabled as part of a proactive replenishment approach. There are sensors in the machine that help determine the best time to reorder goods to ensure it doesn’t run out of stock.

The supply chain uses AI and analytics to monitor consumption patterns in that vending machine, which then trigger a procurement process automatically for the supplier to come in and replenish the machine. Analytics and mobile capabilities are then used to track and trace that shipment as it moves across the connected supply chain.

I mentioned the importance of data and information before. Similarly, an enterprise information management (EIM) platform is core to any intelligent and connected supply chain. An EIM solution can automate processes and deliver insight into current and likely future demand and inventory replenishment patterns (the ‘inside-out’ view) and it can anticipate and react to changing market demands (the ‘outside-in’ view).

The platform also provides a means of communicating status and recommendations or predictions for suppliers and stakeholders, in addition to analysing customer activities and communication channels to keep connected to buyer dynamics.

Getting started? Get the IoT mindset  

Business decision-makers need to remember that it’s not good enough to implement these devices without the proper skillset to use them effectively; consider why they’re being brought into the business and what needs to happen to get the most out of them.

To extract the maximum value of IoT staff must be able to analyse and interpret data. IoT devices can be used with machinery and vehicles, helping to forecast and avoid any issues before they occur. Status and trend data from critical machinery can be continuously monitored with any problems and outages being picked up immediately – but ultimately, someone or something needs to act on the information when it is flagged, to reduce the amount of downtime suffered.

While this use is vastly different to inventory checking, the core to making it work is data. If an organisation has the skillset to make use of the data, it can be applied to multiple areas of the business to drive efficiencies better deliver on customer expectations.  

Human interaction and involvement will always be needed in supply chain.

However, the role of people will evolve and is evolving. It’s vital that businesses and workers don’t stand still, rather we should look to support human intelligence with the insights that machines can deliver – ultimately making for a smarter, more productive and profitable supply chain that exceed end-customer expectations.


About the author:

Leo Yeung is the VP of Business Network Sales at OpenText Asia Pacific. He has been with the company for over 20 years and managed marketing, product management, solution consulting and lately sales function. He has rich experiences in B2B integration as well as supply chain management and logistics solutions.

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