The challenge of embedding IoT in the supply chain

Posted on 11 Dec 2017 by Jonny Williamson

As more and more manufacturers embrace the disruptive benefits which IoT technologies offer, a new set of challenges has emerged.

Graeme Wright, CTO Manufacturing, Utilities and Services at Fujitsu UK&I.

There are multiple reasons why companies are embracing the Internet of Things (IoT). Extending the product reach, better product traceability and greater transparency in the supply chain are three such factors.

The Manufacturer recently sat down with Graeme Wright, CTO Manufacturing, Utilities and Services Fujitsu UK&I, to discuss how manufacturers can overcome the common stumbling blocks when adopting IoT technologies.

According to Wright, the majority of the partners Fujitsu works with collect data to screen their supply chains, extend their product reach and bridge costly gaps in their distribution and retail networks.

Wright stated that one way Fujitsu supports its partners by embedding IoT-based ‘Near Field Communication’ (NFC) devices into their products for actionable business insight.

In the FMCG market, it’s easy to lose sight of a product in the supply chain; with an estimated 3% of global revenue lost due to products being out of stock at the retailers, noted Wright.

As a result, companies are keen to connect the relevant dots through IoT-connected devices.

Wright explained: “Even when a manufacture holds significant value of goods globally, there is no guarantee that they stock the required products. To have sufficient insight into the supply chain, is therefore crucial for manufacturers.”

Companies who miss out on making their supply chain more transparent potentially face a significant loss in revenue and higher costs and low free cash flow.

Wright said: “A dairy company, based in the US, was told by a supermarket that the dairy products had gone sour. The reality was, the supermarket warehouse had the product standing outside of the cold room for too long.”

The company integrated active RFID tags to monitor the temperature of the product through the supply chain, Wright continued, and it identified the root cause for the products turning sour and reduced product wastage costs.

However, companies have to be prepared, Wright warned. Some businesses may not have the right tools to hand over data, other may lack the necessary integration to stop data slipping through the cracks.

Looking where to intercept the data throughout the supply chain, is vital.

He concludes: “The challenge of any IoT programme is to deliver benefits; if you don’t get the right level of results, you need to try something else, or make an adjustment. You should face this as an open-end programme, rather than a defined project. Start small, learn and evolve.”