CSCMP's Supply Chain Quarterly
October 22, 2018
Forward Thinking

Most manufacturers are using the Internet of Things to improve operations

Despite cost concerns, a vast majority of manufacturers are investing in the technology required to create a network of connected objects and devices, according to the results of a Zebra Technologies survey.

A vast majority of manufacturers have begun to use the Internet of Things (IoT) to improve their supply chain operations despite lingering concerns about the cost of the new technology, according to the results of a recent survey conducted by Zebra Technologies Corp., a tracking and visibility solutions provider based in Lincolnshire, Illinois.

Eighty-three percent of manufacturers in the poll said they either have IoT technology in place or plan to deploy it within a year.

Few technology trends have received more hype in recent months than the IoT, which is generally described as a network of physical objects embedded with unique identifiers that enable them to automatically exchange information with their manufacturer or operator.

Proponents say an IoT network allows a distribution center operator or a third-party logistics provider to collect real-time data on the location and condition of every pallet, forklift, tractor-trailer, and warehouse employee. Armed with that information, the business could monitor its supply chain, mitigate loss and risk, improve operations and asset utilization, and enhance customer service, according to supporters of the technology.

Respondents to Zebra's survey said the most important enabling technologies they are using to build an IoT are Wi-Fi networks, real-time locating systems (RTLS), security sensors, bar codes, global positioning system (GPS) receivers, and mobile computers.

Despite the great promise of the IoT for supply chains, there are some real-world hurdles to installing a system. Asked to list the top barriers to adopting an IoT solution, half of the surveyed manufacturers cited cost, 46 percent indicated privacy and security, and 46 percent named integration challenges. The best way to clear these hurdles is for each company to design an IoT that matches its specific challenges, said Jim Hilton, senior director and global manufacturing principal at Zebra Technologies, in an interview.

Each company should apply only the amount of technology it needs to track its goods, assets, people, and processes, Hilton said. That can vary widely depending on budget, shipment value, and how soon the data are needed. One company may need real-time data throughout its supply chain, while others would be satisfied to check in at the next point of connectivity or when a shipment arrives at the truck yard. The specific circumstances and problems to be solved will help each business decide whether to implement an IoT network based on active or passive radio frequency identification (RFID) tags, Bluetooth wireless signals, or even basic bar codes.

"Not everything has to be run through analytics to be valuable," Hilton said. The bottom line is to apply intelligence at the point of activity, so individuals or even machines can see the data indicating that there is a problem—while they can still do something about it, he said.

For more about the survey's findings, see the infographic here.

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