The essential guide to supply chain management best practices
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Supply chain cooperation and process integration between partner companies are seeing unprecedented success, thanks...
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to the internet and the quality of integration software products available today. And the internet of things (IoT) -- the growing network of single-function devices that can add data to those shared processes -- is greatly enhancing processes that were already far better than anything that came before.
But IoT adoption tends to be an organic, in-house experience; a bottom-up decision that seldom occurs with big-picture forethought. A manager reads about a new gadget, gets consensus from the employees who will benefit from its deployment, makes a modest expenditure, and a new trinket goes on the company's IoT charm bracelet.
There may be a better approach. In an age when supply chain partners are increasingly interdependent, and supply chain processes are consortium-level undertakings, it makes sense to approach IoT adoption from that same global perspective.
IoT technology is becoming more and more pervasive in manufacturing, and one outcome of this is the smart supply chain. IoT technology can be found on products, packing equipment and pallets. It's in trucks, warehouses and manufacturing equipment. Sensors and other IoT-enabled objects predict delays in delivery and forecast equipment failure. They offer insight into product usage and customer behaviors. They reduce costs, lead time and downtime.
Despite all of these benefits, however, IoT components in logistics and manufacturing tend to infiltrate processes one at a time, as local, not global, innovations. IoT is still new enough in the evolution of the supply chain that there is no one right way to implement it; no best practices guide to adoption. Could this gradual uptake be resulting in less-than-optimal implementations or -- worse -- missed opportunities?
Consider a new approach. Could IoT adoption be improved if supply chain partners underwent that adoption together, and with a global implementation plan in place, arrived at through collaboration and collective brainstorming?
Partnering for a smart supply chain
Every manufacturing process and every delivery system is the result of meticulous design. They are not developed piecemeal; they are painstakingly developed. Why should the implementation of IoT be any different?
The objectives of an IoT implementation aren't bottom-up, they're top-down. So the process by which implementation occurs may likewise be best as top-down.
Bringing supply chain partners together can become a process by which questions affecting the entire supply chain may be addressed collectively; questions that can be answered with creative IoT deployment.
- How can downtime be minimized throughout the supply chain?
- What can be done to improve the effective response to disruption?
- How can stock and inventory be more effectively managed?
- How can delivery operations be made more efficient?
- How can manufacturing and delivery lead times be reduced?
Imagine bringing partner companies together to address each of these questions collectively. Imagine further, each contributing partner's input on specific opportunities to implement IoT devices and data to bolster their participation in any of these initiatives.
Imagine how such collaboration might result in reduced costs of implementation and testing; how the coordination of implementation between companies might greatly accelerate the integration of IoT components and data into existing processes.
For example, the questions "How can stock and inventory be more effectively managed?" and "How can delivery operations be made more efficient?" could be addressed together, resulting in the following scenario:
A food manufacturer supplies a national retail food chain. It implements radio frequency ID (RFID) tagging at the product, case and pallet levels, enabling real-time inventory monitoring across its many national warehouses. This tagging allows its partner transportation fleet to sync their payload in real time, as well. The transportation partner likewise equips its fleets with sensor arrays to monitor fuel consumption, track maintenance and predict failures. Missed deliveries are anticipated; when disruption occurs, alternate inventory, vehicles and routing are already queued up. Stock and inventory are more robust, logistics are more efficient and both cost and lead times are reduced.
Catch bottlenecks before they happen
But what if the implementation in the scenario above is uncoordinated? RFID tagging allows the manufacturer to better achieve order fulfillment to the retail chain, but if the fleet isn't syncing payload, then down vehicles or delayed deliveries will create holes in the real-time inventory, and recovery can be time-consuming. If the upgrade of the fleet to sensor-driven logistics has not occurred, then the down vehicles and delayed deliveries cannot be anticipated, so alternate delivery scenarios can't be accommodated. Everybody loses.
A top-down approach would be to implement multilevel RFID tagging and inventory control simultaneously with a multilevel RFID manifest, and to have preceded both of those implementations with vehicle sensor deployment. Coordinating these implementations makes each one productive from the outset, and everybody wins.
The fruits of IoT adoption partnering
Finally, the practice of getting partner companies together into collaborative discussion at a nuts-and-bolts level, rather than just to talk agreements, policies and best practices, can open up dialogs beyond IoT. It can become a new forum for collaborative process design, incorporating viewpoints from outside the circle of IT personnel and enhancing the understanding of issues affecting operations beyond the handling of data.
Bringing partners together is generally a positive step: Taking that step more regularly, and with a whiteboard handy, can create a smart supply chain and a better partner dynamic altogether.
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