How IoT-enhanced warehouses are changing the supply chain management – Part 3
IoT-based warehouse management, like any other emerging technology, also comes with a few challenges/drawbacks of its own. This is why, despite all the advantages and acceptance by the likes of Amazon, Ocado, and Alibaba, many 3PL companies are still hesitant to adopt this technology, says Jaykishan Panchal, a content marketing strategist at MoveoApps. Also, we discussed about Highly Effective Technologies used in IoT & technologies of warehousing previously.
- Lack of IoT standards and regulations
Neither the internet nor the cloud comes under the jurisdiction of one country or authority. As a result, IoT regulations remain virtually nonexistent. Regulating IoT devices is also difficult owing to their diverse origins.
From local to global, many vendors and manufacturers launch new IoT devices in the market every day, making it almost impossible for local authorities to regulate their standards.
There are no legal rules about how these devices should exchange information, and access or store user data. This often leads to serious security concerns for businesses and consumers alike. The global tech community and authorities need to come together to put forth regulations and set standards for the IoT industry.
- Security concerns
Although the internet has become more secure, it still remains susceptible to cyber attacks. Exchange of sensitive data is at the heart of IoT-based warehouse management systems. Unfortunately, the growing number of IoT-connected devices is likely to provide more opportunities to cybercriminals.
The cost of an average data breach to companies worldwide is around $3.86 million (€3.37 million) with an average 196 days required to identify a data breach. Reports also state that cybercriminals are likely to steal an estimated 33 billion personal records by 2023.
- Data management
IoT-based warehouses will generate large amounts of data. To obtain vital insights, however, this data will need to be analyzed and sorted into easy-to-understand chunks. It all needs to be done in real time.
In other words, without efficient data handling experts and processes in place, the data will be a meaningless pile of bits and bytes. 3PL companies will need to hire technicians with relevant IoT qualifications and training before setting out for warehouse automation.
To handle the enormous volumes of data generated by IoT devices, you will require a sound infrastructure with necessary network hardware including sensors, cables, mPOS, computers, wearables, and cobots or robots.
The more advanced the system is, the higher the infrastructure cost will be. Not many small and medium logistics companies can raise billions of dollars for smart warehouses, although the ROI is reasonably quick.
Despite all these challenges, however, the smart warehouse technology is rapidly evolving. AI development is proving to be a game changer for the logistics industry in particular.
Using AI, this industry aims to –
- Predictive analytics
With the help of advanced AI algorithms, retailers can create customized predictive analytics models to process the big data collected from the supply chain. The hyper-efficient warehouses in the near-future will be able to regulate everything, from the HVAC system to the inventory, in real time using advanced predictive analytics.
- Responsive supply chain
The next level of automation and hyper-connectivity will lead to the creation of a responsive and profoundly intelligent supply chain. It will accurately locate, track and measure the movement of each item from manufacturing till it reaches the end-consumer. Manufacturers will be able to speed up or slow down their production, while warehouses will optimize their storage based on user demand.
- Unmanned Aerial Vehicles (UAVs) for deliveries
In the not-so-distant future, Unmanned Aerial Vehicles (UAVs) or drones will be used to make same-day or express deliveries, particularly in big cities. Many companies have already started using UAVs.
Amazon is testing Prime Air in different locations to bring down their delivery time to 30 minutes or less. Using the top of its vans as a mini-helipad, UPS has also started experimenting with drone deliveries. They will soon become an essential part of smart warehouses and supply chain management.
The author of this blog is Jaykishan Panchal, a content marketing strategist at MoveoApps