Internet of Things, Machine Learning, and Artificial Intelligence in the Modern Supply Chain and Transportation.

Author:Mahamuni, Atul

Thanks to ubiquitous connectivity, a plethora of sensors, advances in data analytics and (in the areas of machine learning and Artificial Intelligence [AI]), the Internet of Things (IoT), the industry is on the way towards revolutionizing the modern supply chain and transportation industries. These disruptive changes manifest themselves as new, smart capabilities in Supply Chain Management (SCM) applications especially in manufacturing, quality, maintenance, transportation, logistics and warehousing. Under the hood, these capabilities are enabled through the collection of sensor data and predictive analytics on the sensor data, along with contextual data form business applications and integration of these predictive insights into SCM/Transportation applications.

Here are some of the quantifiable benefits that many SCM organizations have reported in industry publications:

  1. 48 percent reduction in unplanned downtime: Unplanned downtime reduction from 11 percent to 5.8 percent due to IoT technologies.

  2. 16 percent improvement in Overall Equipment Efficiency (OEE): OEE improvements from 74 percent to 86 percent. This has a direct impact on overall productivity.

  3. Defect rate cut in nearly half: From 4.9 percent to 2.5 percent.

  4. 23 percent reduction in New Product Introduction cycle time: From 15 months to 11 months.

    It is important to understand the positive business impact IoT, machine learning and AI are having on manufacturing, transportation and warehousing operations. There are specific technological advances that have made this possible.


    Transformative Trends

    IoT technologies are impacting the supply chains with the following key transformative trends--in the order of increasing potential of positive business impact:

  5. Optimizations in individual supply chain functions:

    Each individual supply chain function--such as manufacturing, transportation, logistics, and service--are realizing operational improvements due to IoT technologies. For example, the manufacturing sector is witnessing significant bottom-line reduction due to real-time visibility into business Key Performance Indicators (KPI) such as OEE, zero unplanned downtime, and predictive maintenance. The transportation and logistics sector is benefiting from significantly lower downtime due to real-time monitoring of trucks, on-time arrivals due to location tracking and intelligent routing, reduction in liabilities due to driver behavior monitoring, and reduction in in-transit damages due to cargo monitoring.

  6. Interconnecting the supply chain (Digital Thread):

    Today, individual functions in the supply chain operate in their own silo. Interconnection of the entire supply chain in a seamless Digital Thread delivers a new level of business benefits. For example, when in crease in the product demand causes warehouse inventory levels to drop at a rate faster than usual, a new manufacturing order can be automatically planned and released. Shipments can be automatically planned and...

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