From Loic Barancourt, CEO, Thinxtra, The IoT Telco
Back in January 2020, the World Economic Forum reported on the technology opportunities on offer to global supply chains.
The Forum predicted that four technologies would play a part in disrupting the global supply chain, the second of these being the Internet of Things, with the other three technologies being blockchain, robotics and data science.
The report makes the observation that there is a risk that only large, well-resourced supply chain organisations will be able to take advantage of these technologies, creating a supply chain digital divide.
Thankfully, it counters that by reminding us that data is having a democratising effect. Small businesses and firms are looking to inexpensive, data-informed tools and platforms that solve their supply chain challenges.
We agree. It could be argued that the defining feature of every supply chain is that there is always latent value buried in it. Even if you believe or know that your supply chain is running smoothly, value remains locked away in the form of inefficiencies. And new disruptors are entering traditional markets with new technology-centric business models that don’t rely on older legacy solutions.
The key therefore is to unlock that hidden value, and the most-accessible of those four technologies to help companies do this is the Internet of Things – to collect data-driven insights about assets: where they are, their condition, the returns they deliver, and so on.
The scope of track-worthy assets is wide and reaches from IBCs, kegs, drums and roll cages to containers and pallets. We refer to these assets as Industrial Packaging Assets.
The general rule of thumb that Thinxtra, applied to any assessment, is that 20% efficiency can be created through knowing where all your assets are in your supply chain.
Building the detailed business case requires an equally-detailed understanding of the cost of the assets being considered, and the cost of operating the supply chain, including the cost of dealing with all its imperfections and inefficiencies.
Loss, cargo wastage, poor asset utilisation, empty miles, high cost of handling, poor customer experience – inefficiencies and their cost to the business vary from one organisation to the other but all have negative impacts on financial performance.
Many supply chain managers we talk to are aware of the benefits of IoT in tracking assets, and there’s a broad consensus in the industry: a connected supply chain will unleash the next generation of efficiencies and productivity gains. However, the implementation risks and costs have until now limited its wide adoption.
Maturity of solutions, fitness for purpose, cost-efficiency, capability to scale – that’s quite a list of obstacles to consider when implementing a supply chain IoT solution.
Large global organisations like DHL, Peugeot and Michelin have overcome these obstacles, and are leading the way with successful implementations based on business case ROI.
They have been successful at getting the ROI and business case and the technology in balance, to achieve the next level of productivity in their supply chains. Many local Australian and New Zealand companies are replicating and innovating in their own supply chain.
For example, one of our customers is now delivering goods along its supply chain with 30% fewer intermediate bulk carriers (IBCs), whilst improving customer service levels, thanks to the deployment of a simple and cost-efficient track-and-trace solution connected to Thinxtra’s 0G Network.
The iterative process we’ve developed at Thinxtra to understand the total cost of data production against supply chain operational requirements is called the ‘day-in-the-life-of-your-asset’ methodology.
To find out more about how this process helps supply chain operations managers build an effective business case for IoT at scale, download our new eBook.