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Why implement IoT in the supply chain?

Updated: Mar 31, 2022

This article has been written by Paúl Alejandro Rivera. Member of the Dynamic Systems Society, Committee I 4.0, Ecuadorian-German Chamber, Member of the Logistics Association of Ecuador, CEO of Wiibiq. The times of history far exceed the times of the decision makers; so much so that it is often forgotten that everything that currently challenges our present had a similar form in the past. Our challenges are cyclical, if there was a pandemic in the past; there will be a pandemic in the future; if there was an economic depression in the past; there will be an economic depression in the future. The cyclical nature of life cannot be eliminated; but you can smooth the transition between highs and lows; as long as one condition is met: having reliable and timely data and information.

In this context, the key principle of the correct management of a system; lies in the ability to obtain and analyze data to increase the effectiveness, efficiency and effectiveness of decision-making. The supply chain is no stranger to this principle; in fact, if one considers that one of its four constitutive flows is information; It is understood that correct supply management implies having the appropriate technical and technological capabilities to capture data in real time and transform it into actionable information for rapid and high-value decision-making; This is where the implementation of IoT in the supply chain comes into play. The internet of things (IoT for its acronym in English) is a system of elements interconnected with each other, and in turn to the network (internet); for, through that integration; generate data, information and action. Each element of the system is given a UID (Unique Identifier) ​​code and the ability to transfer data to the network without requiring human or computer intermediation. In the aforementioned ability to generate data for each element, a virtue and a defect are revealed simultaneously. The virtue: know in detail the operation of each element. The flaw: incurring in capturing useless and expensive data. The latter is easily mitigated by proper knowledge and experience; thus maintaining abundant profits; which are quoted below:

  1. Effective, efficient and effective monitoring of business processes.

  2. Cost optimization of business processes: the data reveals inefficiencies and patterns that normally escape even the most expert of supervisors.

  3. Saving time and money: the IoT allows cost control in real time. It significantly improves decision making, drastically integrating the operational layer with the executive layer.

  4. Systemic improvement in the customer experience: Imagine the case of an exporter that can certify each and every one of its critical control variables; throughout your entire supply chain.

  5. The dream of every international buyer. Ability to access information anywhere and at any time.

  6. The transfer of information on paper and through files is minimized; this implies very important savings of time and resources; by digitizing in real time, the reports and reports.

An adequate technological selection of IoT, both in terms of digital platform and equipment, drives a resounding improvement in the alignment and integrated management of companies. In general, IoT is more abundant in manufacturing, transportation, and utility organizations, making use of sensors and other IoT devices to improve operation performance. However, there are cases of its use in agriculture, infrastructure and home automation industries, driving digital transformation in each case. The application of IoT in the supply chain is a practical and cost efficient way to optimize and digitize the operation. It is strategic to explore it. #IoT #I4.0 #Manufacturing #Supplychain

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