Millions of internet-connected devices are deployed across the globe to sense, collect, and communicate real-time data. They’ve forever altered our personal and professional lives as the Internet of Things (IoT) has transformed myriad applications with intelligent monitoring and measuring. One of these is inventory management and replenishment, where data is king.
Feeding timely IoT data to a supply chain solution like the Atlas Planning Platform has two big advantages. First, it lets management teams sense changing conditions early enough to take effective action. Second, it sparks insights that help improve customer service levels and financial results over time. For some, IoT telemetry can turn demand planning and replenishment functions into serious competitive advantages. One example—and one that gives new meaning to the term “frozen inventory”—is Reddy Ice, a leading supplier of packaged ice products to grocery and convenience stores in the United States. The Reddy Ice supply chain team embedded sensors in its deployed iceboxes to continuously monitor ice quantity and consumption. This information is transmitted to their Atlas Planning Platform every 30 minutes, where it drives real-time decisions about replenishment frequency, quantity, and transportation routes.
As this example illustrates, adding IoT smarts to a supply chain means more than just installing internet-connected sensors. It takes a reliable data infrastructure to collect, store, and transmit telemetry. That calls for a supply chain management platform capable of analyzing near-real-time data streams to generate prescriptive recommendations and tune the supply chain plan in response to changes in the environment. But first things first—how can you know whether your business is a prime candidate to leverage IoT in your supply chain? Here are three easy indicators that you’re likely to derive worthwhile benefits from IoT-augmentation:
You’re ready to take advantage of IoT and point-of-sale (POS) data.
Combining POS and IoT information can be very powerful. POS data reveals buying patterns, consumer behaviors, and sales activity, while one of the many ways IoT can help you is by confidently scheduling restocks by automatically collecting real-world support for replenishment decisions. The two streams complement each other, helping increase your reaction speed, adapt stock levels and production to actual demand more quickly, and produce insightful forecasts. IoT data can also flag unexpected anomalies that no forecasting process short of a crystal ball can predict. For example, a SKU location forecasted to run out in ten days can’t account for a random, one-time purchase that consumes the remaining items. IoT pays off big by alerting planners to make on-the-fly adjustments to mitigate delays or stockouts.
There are long distances between your distribution hubs and stocking point locations.
The greater the distance between stocking point A and stocking point B, the more transportation costs become a factor in supply chain performance. If a store is ten miles from a warehouse, it’s inexpensive to replenish since there’s always a truck nearby. But for a store 100 miles away, restocking is much more costly, which amplifies the impact of imperfect replenishment timings. Data collected through IoT sensors can give planners the feedback they need to optimize timing of shipping schedules and the exact number of resources necessary, such as vehicles and drivers. With IoT supplying real-time consumption rates and stock levels across a far-flung network of different use cases, the planning platform adds situational awareness to its forecasting based on historical demand data. IoT also helps the system update its understanding of how seasonality and marketing promotions affect the demand signal. In short, while long-range replenishment will always be an unforgiving game, IoT can play a vital role in automatically building a fuller, more detailed picture of consumption to minimize stock outs while achieving peak transportation cost-efficiency. Learn more in this Forbes article on Pinnacle Propane.
Your business involves a significant amount of time-sensitivity.
With planning and execution now converging more and more, IoT can help ensure actions are taken to reduce the cost of waste and delays stemming from avoidable causes. The United Nations estimates that about a third of food produced for human consumption is lost or wasted, and the costs of “supply chain blindness” are especially high for any company producing and shipping items with finite shelf lives. IoT sensor data can increase your situational awareness in never-before-seen ways, providing status updates on the condition of everything from plants to production facilities, pumps, cargo containers, trucks, and much more. IoT data can help you predict and prescribe when to perform plant maintenance to avoid unintended breakdowns, surveil work queues in front of bottlenecked resources to optimize throughput for the manufacturing process, compare real-time ETAs for shipments against the response time horizon, sense vendor-managed inventory levels based on actual consumption…the list goes on and on.
So, it’s clearly time to examine the potential value of IoT to your supply chain. What’s the fastest way to do this? Simply reach out and we’d be happy to review your supply chain best practices and help you assess the advisability of incorporating data collection by Internet-connected devices in your supply chain management strategy.