If you’re looking for ways to increase ROI in Supply Chain, you might want to consider leveraging the power of IoT (Internet of Things) asset tracking solutions. By gathering data-driven insights about assets and unlocking the hidden value in the supply chain, IoT has proven to be a successful strategy for businesses looking to boost their returns.
In today’s competitive business landscape, every organisation aims to maximise their return on investment (ROI) while keeping operational costs under control. In this article, we’ll explore how IoT solutions can improve return on capital in the supply chain and how businesses can build an effective business case for IoT at scale.
Why unlocking hidden value in the Supply Chain is critical
The defining feature of every supply chain is that there is always latent value buried in it, even if it is running smoothly. This value is typically in the form of inefficiencies, such as loss, cargo wastage, poor asset utilisation, empty miles, high cost of handling and poor customer experience. These inefficiencies can significantly impact financial performance and harm ROI in supply chain.
IoT technology can help unlock this hidden value by providing data-driven insights into asset location, condition and returns. The scope of trackable assets is broad and includes industrial packaging assets such as intermediate bulk carriers (IBCs), kegs, drums, roll cages, shipping containers and pallets.
The rule of thumb at Thinxtra is that 20% efficiency can be created through knowing where all assets are in the supply chain. To build a detailed business case, it is important to understand 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.
The impact of IoT on the Supply Chain
Back in 2020 the World Economic Forum identified four technologies that disrupt the global supply chain and IoT is one of them. Among them, IoT remains the most accessible and has the potential to provide data-driven insights about assets.
Industrial IoT solutions, like asset tracking, can help businesses optimise asset utilisation and extend asset lifecycles while maintaining control over operating costs. They can also help businesses automate and digitise operations, enabling more distributed and remote management.
Most organisations invest capital in physical assets to run their businesses, including machinery, vehicles, buildings and reusable packaging items. The value of industrial IoT lies in building connections between these assets and enabling them to communicate with each other and with business systems.
These connections allow businesses to collect data and analyse it, providing insights that can help to optimise their operations, improve customer experiences and increase ROI in supply chain.
A connected supply chain will unleash the next generation of efficiencies and productivity gains, leading to a significant improvement in ROI. In today’s world, where businesses need to focus on improving their ROI, industrial IoT has become a powerful tool to achieve this goal.
Building the business case for IoT implementation
Organisations like Coles in Australia and AGP in NZ, have already overcome the challenges of implementing an IoT solution in their supply chain. By balancing the ROI and business case with technology, these organisations have achieved the next level of productivity in their supply chains.
Coles reduced the cost of their asset pool required by 25 per cent, tripling the amount of empty bins returned, resulting in a positive impact on the environment and ROI. This was achieved by using IoT sensors to monitor the location of and monitor shock events for 4,500 smart food bins moving poultry between their supplier processing facility sites and its distribution centre.
While double-glazed glass manufacturer AGP disrupted the glass industry in New Zealand with a four-day order-to-delivery customer guarantee. This was achieved through the deployment of a simple and cost-efficient track-and-trace solution connected to Thinxtra’s 0G Network.
These are examples of how IoT can significantly improve supply chain management efficiency while keeping costs under control.
How to use asset tracking to improve ROI in supply chain
The core of how asset tracking solutions improve return on capital is by gathering and using data directly from the assets to improve asset utilisation without manual processes. But to build an effective business case for IoT implementation at scale, businesses need to understand the total cost of data production against supply chain operational requirements.
Thinxtra has developed an iterative process called the “day-in-the-life-of-your-asset” methodology to achieve this.
“Day in the life of your asset” methodology
1. Identify your asset’s touchpoints
This methodology involves mapping out the supply chain process and identifying the various touchpoints that the asset goes through. For example, a pallet may be loaded onto a truck, transported to a warehouse and then unloaded and stored on a rack.
Each of these touchpoints represents an opportunity to collect data about the asset and the conditions it is exposed to.
2. Determine your data requirements at each point
Once these touchpoints have been identified, the next step is to determine what data needs to be collected at each point. This could include location, temperature and humidity data and even data about the handling of the asset.
Thinxtra has developed a range of sensors that can be attached to assets, like industrial packaging, to collect this data. These sensors are small, low-cost and low-power, making them ideal for use in supply chain applications.
The sensors collect useful data into how physical assets are working for a company that would be too time-consuming, expensive or logistically impossible for a human to do manually. Such insights are invaluable for increasing asset efficiency across lifespan, usage, maintenance, repairs and replacements.
3. Transmit and analyse the data
Once the data has been collected, it needs to be transmitted to a central system where it can be analysed and acted upon. Thinxtra’s 0G Network provides a secure and reliable way to transmit this data, even in remote and challenging environments.
By analysing this data, supply chain managers can gain a detailed understanding of how their assets are being used and identify areas where improvements can be made. For example, they may discover that a particular asset is being underutilised, or that it is being exposed to conditions that are causing damage.
4. Take action and improve the ROI in your supply chain
Armed with this knowledge, supply chain managers can take action to improve asset utilisation and reduce inefficiencies. This could involve re-optimising transport routes, adjusting storage conditions or even redesigning packaging to better protect the contents.
The result of these efforts is a more efficient and effective supply chain that delivers better returns on investment. By leveraging IoT technology, businesses can unlock the hidden value in their supply chains and stay ahead of the competition in an increasingly competitive marketplace.
With the right IoT solutions in place, businesses can increase the return on investment in supply chain by improving asset utilisation, reducing inefficiencies and delivering better customer experiences. As the world becomes increasingly connected, businesses that embrace IoT technology will be better positioned to compete and thrive in the years to come.