How the Internet of Things is transforming the supply chain: Part 2, Future solutions

In the previous part we discussed about IoT applications. In this part we are discuss about the future solutions.

Future solutions

Autonomous Vehicles – There are already some interesting developments that could have an impact much sooner than people think. One example was the trial of unmanned delivery vehicles in Greenwich, London by Ocado and Oxbotica which delivered to over one hundred residential customers. Technology like this could become widely adopted for final-mile deliveries, but also for longer distance work. There should be significant cost savings from autonomous vehicles. Morgan Stanley estimates the potential savings to the US freight transport industry at $168 billion (€138.77 billion) annually from improved fuel consumption, reduced labour costs, improved productivity and reduced accidents. Keep an eye on WISE-ACT outputs for relevant developments across Europe. WISE-ACT is a network of experts exploring the wider impacts of such innovative technologies, says Dimitrios Spiliopoulos.

Drones (air and ground) – Drones have been touted as the next big thing for long time, despite space and privacy regulations severely limiting their scope. Already some companies (e.g., 7-Eleven, Wal Mart) test them for last-mile delivery and even in stores. Drones can bring significant cost savings and speed, but also can serve consumers in remote areas where access by roads or sea is not possible.

Additional benefits from using IoT in Supply Chain

  • Data – By connecting all these vehicles, assets and people the amount of data that is collected is significant and the companies which will be able to integrate the different datasets and analyse them creating valuable insights will be these that will have a clear competitive advantage. All this data can also help companies create new business models selling potentially new services and insights to its B2B clients or partners. In this case, the challenge is to find and recruit the right number of Data Scientists and create a data driven culture within the organisation.
  • Insurance – Monitoring and measuring everything in real time can reduce risks and uncertainty in the supply chain helping insurers reduce premiums and incentivise clients to use the insured assets properly. Indeed, we already see an evolution in fleet management insurance due to the use of telematics. Researches show that access to ‘In-Vehicle data’ can save warranty claim costs by 25% and also bring down recall costs by 35%. In addition, there are companies that even use cameras to capture the moment of accident, robbery or hazard in real time. The total insurance industry of supply chain can be absolutely revolutionised.
  • Customer satisfaction & product development – Being able to better manage the supply chain and reduce costs, risks and uncertainty usually mean that the manufacturer and retailer are able to provide the right product in the right place at the right time, regardless of channel. As a result, the customer satisfaction and loyalty can reach high levels. In addition, especially in the case of products with connected packaging, the data which can be collected and analysed (anonymously) is so valuable that will help brands and retailers offer customised services or targeted discounts. Furthermore, by better understanding how their products are used hopefully they can develop new products satisfying new needs of not only large, but also niche market segments. Needless to say, organisations need to take all necessary measures to protect the privacy and the data of their customers.
  • Compliance & fraud – Apart from the operational and commercial benefits, higher scores of compliance with national and international regulations can be achieved as well as fewer penalties for the companies. This means that the quality of products and services for the consumers can be improved since there will not be enough space for fraud, corruption or misleading information. Especially if we consider the benefits of using blockchain and edge computing in the supply chain, we can be optimistic about a more reliable and transparent supply chain.
  • Sustainability – In many cases using IoT helps the company monitor, analyse and manage the carbon footprint across the supply chain, including in places or at levels of detail not possible before. Sustainability often goes hand-in-hand with efficiency, which is usually translated into cost savings. For instance, by optimising routes and loads, implementing reverse logistics, reducing waste of products (like food), improving driving behaviour. So IoT can promote lean logistics principles, eliminating any waste of resources leading not only to lower costs, but also to more green supply chains.


Internet of Things can enable many valuable applications in any aspect of the global supply chain offering. However, saying this doesn’t mean that a company has to implement all of these solutions at once or that every problem will be magically solved. Problems like data privacy, silos within organisations, fear of change, lack of skills or experience are probable to occur and each company has to be proactive to deal with each of these.

Some tips for the companies which are planning to start their IoT journey:

1) Be clear on what problems to solve first or what to achieve. Priotisation is key.

2) Consider the cost of implementing a solution in combination with the short and long-term benefits. The right balance is key!

3) Start small by having trials in few vehicles/few employees/few pallets and when the results are positive and there is support from all the different stakeholders then deploy the solution at scale.

Dimitrios Spiliopoulos

4) Train all supply chain actors, including own employees, suppliers and customers. However, do not only train the employees about how to use the technology, but also the managers about how to manage their resources, lead and motivate their teams aiming to achieve the right balance between human and technology.

5) Lead the cultural change of their workers, managers and partners who will be affected by these IoT implementations. Otherwise, it is very easy for these projects to fail just because people do not want to use them.

The human factor really matters and this is where many IoT projects fail. There is an increasing need for collaboration across the supply chain. That is why apart from the technological and economical aspect, the companies need to invest time and resources to enable the transformation of the human mindset and cultivate a more collaborative approach.

For IoT to be totally effective, all members of one’s global supply chain must be connected. That may take a while, but as technologies like blockchain, LPWAN and edge computing continue to take form, there is so much further we can go to make the supply chain even more efficient and creative than ever before.

Q: What are your thoughts about the future of Connected Supply Chain?

Thank you all for reading the article. Feel free to contact me if you want to discuss further the above mentioned IoT applications in Supply Chain or other IoT subjects.

The author of this blog is Dimitrios Spiliopoulos

Comment on this article below or via Twitter: @IoTNow OR @jcIoTnow


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