How IoT And AI In Supply Chain Management are Reshaping Businesses

Posted By : Arpita Pal | 05-Oct-2023

Supply Chain Management for a business is vitally important as it ensures consistent connectivity and availability of goods from stages of production to transporting finished goods. Without effective management of factors like logistics, warehousing etc., a business cannot survive as it will be unable to to meet the required supply and demand of goods in the required duration of time. Rising volatilities and frequent disruptions can negatively impact SCM in its ability to effectively function in times of necessity. Integration of progressive technologies such as artificial intelligence and internet of things (IoT) can greatly improve its resilience in dealing with unpredictable situations and provide businesses with powerful capabilities such as speed, precision and accuracy. This article delves into the present challenges faced in supply chain management and how advanced technologies such AI and IoT can assist in resolving these challenges.




Present Challenges In Supply Chain Management


Demand Forecasting Issues: Demand Forecasting entails accurately predicting supply and demand of factors involved in supply chain management to enable smooth transition of commodities between consumers and suppliers. To ensure precision in forecasting, substantial data of crucial elements involved in supply chain management should be available in times of necessity to maintain its accuracy. Unpredictable changes in fixed and variable factors can affect the rate of accuracy causing imbalances in inventory and logistics. These unpredictable changes can involve domestic and international conflicts, climatic disruptions, supply and demand variations, changing government and industry regulations etc. Such situations require real-time information and quick data-driven decision-making to counter unexpected inconsistencies.


Logistical Hindrances: In supply chain management, logistics is especially prone to number of disruptions due to climatic variations, port availability and congestion, political conflicts and regulations etc. This directly affects the logistical ability to successfully transport within due time and cater to the required supply and demand of materials and goods. For example, recently due to freshwater drought in the Panama Canal, ships faced long delays and queues causing companies to find alternative routes which were longer and needed more fuel to commute. With climatic disruptions becoming more frequent, companies require intelligent solutions that can improve supply chain visibility and handle such unpredictable situations.


Shortage of Workforce: Rising consumerism has resulted in the necessity of availability of products 24/7 which has led to an unprecedented increase in demand for goods and services. Also, with rising inflation causing the cost for standard of living to elevate, aging workers have been struggling to face rising costs within the prescribed wages in supply chain industries. This has been causing multiple unrests and strikes which further have been resulting in logistical delays in meeting demands.


Technological Barriers: Integration of technology including automation and digital assistance has seen a rather slow acceptance in supply chain industries. The shortage of skilled workers to navigate advanced technology has further exacerbated the situation. This has led to low logistical visibility for transportation, inventory and warehouse management and analyzing consumer demand. Advanced technology such as artificial intelligence, IoT, ERP software etc., can help in fluidity of operations and remove logistical barriers through real-time visibility and communication, analytical decision-making and 24/7 support to achieve efficiency at all levels.


Rising Costs: Supply chain management involves a multitude of elements including, raw materials, workers, ships, warehouses etc., and each comes with its own set of expenses relating to pricing, maintenance, operations and more which contributes to a hefty bill for the enterprise. Rising inflation and geopolitical conflicts have worsened already expensive factors such as costs of fuel, manufacturing, wages etc., and without effective management of these resources, companies can be bogged down by constant looming expenses of these elements. Technological assistance from specially curated software for supervising aspects of functions of finance, operations, inventory management etc. can greatly help in monitoring and reducing expenses for the enterprise.


Dependence on External Parties: For enterprises to have a global presence, collaboration with third-party logistical companies is required. They benefit enterprises by covering a large area and reducing the overall burden through connectivity from distant parts of the world. However, trusting external parties for transportation makes the enterprise dependent on them for visibility and monitoring, thus reducing control over the movement of the goods. With expensive prices, collaborating with 3PL also proves to be an expensive affair which is why enterprises of today require comprehensive and intelligent solutions that can offer extensive coverage and monitoring abilities to reduce reliance on third parties.


Also Read: ERP Vs Legacy Systems: Why Upgrading to ERP is a Game Changer



Utilizing Artificial Intelligence for Deriving SCM Solutions


Supply chain management can greatly benefit from automation and digitalization to overcome its mounting challenges by performing functions that identify, analyze and enhance its operations and eliminate barriers that affect its efficacy. AI in supply chain management through its advanced analytical and constantly improving abilities can provide vital assistance in ensuring smooth functioning of its numerous elements and enhanced logistical capabilities. Some of the benefits of utilizing AI in supply chain management are as follows:


1) Production & Cost Efficiency: By harnessing powerful technologies through AI in supply chain management, such as data modeling, machine learning, etc., enterprises can achieve efficiency in operations, remove logistical barriers and reduce costs. These technologies will assist in real-time visibility of its logistical and warehousing operations, comprehensive monitoring of its multiple functions, provide essential KPIs to improve the quality of operations and provide crucial insights to effectively navigate through challenging problems affecting supply chain management of the enterprise.


2) Enhanced Inventory Management: AI in supply chain management can serve as an effective solution for improving operations and removing warehousing bottlenecks for maintaining essential goods and raw materials. Through automation, systemized tracking of incoming and outgoing goods can be enabled, greater speed and efficiency of operations can be achieved and human errors can be avoided in carrying out vital functions relating to supply chain management for the enterprise. 


3) Higher Precision in Demand Forecasting: Accuracy in predicting demand and supply, required inventory and possible occurring scenarios can help businesses to ensure effective handling of unpredictable scenarios that have the potential to negatively impact the operations of the business. Smart supply chain technologies powered by AI can provide businesses with beneficial techniques in demand forecasting such as resource planning, mitigation of risks through risk management, predictive analytics to carefully assess all internal and external factors affecting the enterprise negatively or positively to make necessary adjustments and lead it towards efficiency and profitability.


Leveraging IoT for Improving SCM Capabilities


IoT in supply chain solutions has proven its power to achieve digital transformation in inventory management by providing warehouses ‘smart abilities’ through automation. IoT devices provide assistance in various forms by providing useful insights and real-time information of incoming, stored and outgoing goods and physical functions such as handling heavy lifting of goods and proper storage. It can provide 24/7 assistance and greatly improve its storage capabilities. Some useful benefits of IoT in supply chain management are as follows: 


1) Real-Time Accessibility: Accessibility in real-time information can assist businesses in providing accurate data-driven decision-making and beneficial insights, tracking and monitoring of vital functions and improving its rate of responsiveness in performing required actions. Continuous visibility is necessary for businesses to carry out the timely execution of functions and fast implementation of changes to improve overall operational efficiency of the enterprise. IoT can help to provide precision and generate faster results through smart abilities with the help of automation and digital assistance.


2) Predictive Manitainence: IoT provides enhanced monitoring abilities for equipment being used in carrying out operations in warehousing and logistics. They provide real-time data about the condition of the equipment regarding its wear and tear and inform supervisors if they require repair and maintenance. This helps businesses to make timely decisions in advance regarding allocating resources for repair and maintenance without stopping operations that can cause delays and add to expenses. They also assist in updating the present infrastructure with new technologies to stay relevant with time and maintain the required rate of supply and demand.


3) Enhanced Connectivity: Supply chain management consists of multiple fixed and moving elements between which connectivity is integral for achieving cohesion and relevance in its functionality. IoT with the help of their sensors enables transparency and visibility through real-time information of concerned elements which further assists in seamless connectivity in its operations and avoiding delays through constant accessibility to vital information.




The future of Supply Chain Management is geared towards digital transformation through greater acceptance of advanced technologies in the near future such as AI and IoT that will assist in reshaping its business models for greater productivity and efficiency. With their enhanced capabilities in providing real-time impactful information, analytical insights and assistance in performing operations in a more efficient manner, businesses can rely on IoT and AI in supply chain management to resolve persisting problems affecting their functionality. As consumerism is touching roof levels where businesses have to operate in unpredictable environments, IoT and AI in supply chain management can serve as reliable tools to counter volatile elements and make timely adjustments to safely navigate through problematic conditions. Their benefits have proven to be manifolds which is why enterprises are doubling their investments to increase their overall efficiency and achieve greater profitability. 


If your business is searching for its own customized solutions powered by IoT and AI in supply chain management, we’d love to support your journey. Oodles Technologies provides advanced solutions in AI, IoT and ERP for effective management of vital functions in SCM. Feel free to drop us a query and we’ll get back to you in 24 hours.

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Arpita Pal

Arpita brings her exceptional skills as a Content Writer to the table, backed by a wealth of knowledge in the field. She possesses a specialized proficiency across a range of domains, encompassing Press Releases, content for News sites, SEO, and crafting website content. Drawing from her extensive background in content marketing, Arpita is ideally positioned for her role as a content strategist. In this capacity, she undertakes the creation of engaging Social media posts and meticulously researched blog entries, which collectively contribute to forging a unique brand identity. Collaborating seamlessly with her team members, she harnesses her cooperative abilities to bolster overall client growth and development.

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