Beyond Networked Hub Logistics: Using the Internet of Things to Manage your Supply Chain

There’s a lot of discussion about how the internet of things (IoT) connected to big data analytics is changing the way we manage a complex supply chain. This recent blog post about the Port of Hamburg is a great example. However, sometimes this big idea glosses over that fact that managing a supply chain requires many technical components that must work together. That’s because a supply chain encompasses a range of activities spread out over a large geographic area.

In fact, a supply chain execution platform must receive, analyze and process data from many sources in every part of the chain, including inputs from business management applications, RFID chip and barcode readers to identify packages or components, sensors built into machines and equipment, GPS data from vehicles, sensors in roads and traffic control systems, and other data sources as well. That data only becomes useful when applications analyze it in ways that enable actions meaningful to managing supply chain operations.

Building a fully integrated supply chain execution platform has been an evolutionary process. The good news is that a great many of the core technologies and components needed to manage an extended supply chain are real, proven, and available. To show this, I’d like to review some of the applications available today that leverage IoT generated data in ways that support the key activity centers of an extended supply chain: transport management, warehouse management, and track and trace.

• Transport management – Transport management involves coordinating shipping, rail, and truck transport based on real-time traffic data, and the logistics of loading and unloading goods. Transport management solutions such as SAP Transportation Management use real-time tracking and load management data to build freight transport plans. These solutions are greatly enhanced with integrated logistics control systems, which use real-time traffic data and collaboration between parties involved in transportation to optimize routing, communications, and prevent bottlenecks in busy hubs like sea ports. These solutions make it possible to pass more freight through a hub without increasing the hub’s physical footprint. They also maximize use of transport services and equipment by minimizing idle time. Furthermore, IoT technologies can be leveraged to optimize fleet usage and secure transportation (cold chain/seals).

• Warehouse management – Efficient warehouse management enables faster goods picking and order fulfillment, which is an essential link in a market-responsive supply chain. The IoT plays an important role in warehouse management. A solution like SAP Extended Warehouse Management depends on IoT data and analytics to manage and automate materials flow. Companion technologies, such as SAP Augmented Reality Warehouse Picker used with smart glasses, makes picking faster and more accurate. Warehouse management also can integrate with SAP Auto-ID Infrastructure for quickly scanning barcodes and RFID data.

• Track and trace – Solutions such as SAP Event Management and SAP Object Event Repository not only show where goods are in the supply chain at any moment in time, they ensure supply chain integrity. This becomes incredibly important to industries that are integral to people’s health and well-being. For instance DeLaval, one of the largest suppliers of equipment used in milk production, depends on SAP Event Management to make their supply chain totally transparent for close monitoring and fast response to service needs. Many types of products must comply with regulations requiring that they be traceable from their point of manufacture throughout their distribution chain. Beyond the location, product conditions such as cold chain requirements as well as transportation seals may need to be surveyed. A robust track and trace solution enables anyone in the supply chain to generate a product trace, which protects against counterfeits and enables quick identification of the source of problem products.

When these software applications using IoT data and real-time analytics work together, they create an integrated supply chain execution platform capable of tracking, controlling, and automating an extended supply chain. In addition, SAP’s supply chain management applications integrate with a broader portfolio of SAP business process management apps. This makes it possible to more tightly integrate the supply chain to other business operations, as described in this recent blog: How the Network Economy Is Revolutionizing Supply Chains.

To learn more about how IoT technologies are becoming critical to managing an extended supply chain, check out the upcoming SAPPHIRE conference. You can see a sample agenda for Supply Chain here.