The Internet of Things is a buzz phrase we keep hearing as something that can drive efficiency and make improvements within supply chains. However, to many it has been seen as complex, challenging and confusing. Neil Hamilton, VP of Business Development at Industrial IoT enabler Thingstream believes that it just hasn’t been simple enough to integrate. In this article he identifies two core issues - cost and accuracy. Initial investment is high, and cost is further exacerbated by reliability and coverage issues. Neil goes on to explain why this is set to get easier in the future with simple new technology becoming more readily available, referring to the food industry as a prime example of where new tech can be most effective.
Hype has defined the Internet of Things (IoT) in recent years, and the supply chain is no different. The potential of connected technology to drive efficiencies by tracking the location of anything and monitor its state provides significant value to both suppliers and receivers. In food for example, being able to monitor and prevent spoilage has been proven to significantly reduce waste. Achieving high levels of insight and access is a challenge, and it needs to be made simpler.
The difficulty for those in the packaging industry tasked with improving supply chains through connected technology comes in two areas: cost and accuracy. Necessary investment tends to be high, because of both reliability and coverage issues. If a piece of technology goes wrong, or moves out of range, tracking will go down and be rendered useless. Installation is also expensive, as each monitoring device needs to be built, installed and connected to a network.
Particularly in food and FMCG we’ve seen wide use of RFID and satellite based tracking. Both of these are useful, but neither provides accurate and anywhere in the world live monitoring. RFID relies on receivers at stocking and processing locations, and satellite tracking is expensive and can be unreliable. The alternative, tracking through mobile operator networks makes more sense, but the challenge comes when the chosen network goes out of range, or the supply chain stretches across multiple countries - an even more expensive roaming SIM is required. This is quite simply not a feasible option for organisations when you are transporting millions of tonnes of food and produce everyday.
Solutions in this space are sold on the basis of being always-on and data driven, but unless you’re willing to pay expensive subscriptions to multiple network operators, always-on will never truly be achieved. In some sectors a lack of monitoring can be a serious issue. According to a study by the United Nations Organisation for Alimentation and Agriculture, almost one third of worldwide food production is lost - representing 1.3 billion tons, which would cover an area as big as Canada in farmed land. Imagine what could be achieved if all of this food could be relatively inexpensively monitored as it moves through global supply chains, alerting producers and receivers when food was near to being spoiled?
Improving the method in which packaged food is tracked and monitored within the supply chain could make a real difference to ensuring food stays fresher and safer for longer. In 2015 a report by the UK Waste & Resources Action Programme (WRAP) showed how much money can be saved by reducing food waste. The report predicts that reducing waste from 20 to 50 percent could save the industry between $120 and $300 billion. The US and Europe are responsible for approximately 60 per cent of all food wasted with an average 21 per cent of this waste arising from spoilage.
For firms handling any type of perishable goods, one of the most significant challenges is keeping produce at optimum conditions. As goods move through supply chains this becomes even more of a challenge. At each step there is potential for a slight change in condition that could significantly reduce the shelf life of the products. For this reason it is important to have an affordable system in place whereby issues can be identified and resolved in as close to near real time as possible. Furthermore, Insurance companies will be offering cheaper policies if supply chains are visible end to end, enabling the ability to pinpoint when the chain is broken and goods are damaged or spoiled.
By making IoT technology more affordable, mass adoption can be achieved in supply chains across the globe. From a business perspective - high customer fulfilment rates are critical. Putting waste to one side, technology can also reduce risk and consequently cost. Ultimately coverage and cost of implementation are going to be king for any solution to see widescale adoption. For IoT to be truly ubiquitous in supply chain, we need to see solutions which are both accurate and simple to implement.
A lesser known technology could provide a potential solution. USSD is a universal protocol which appears in all 2G, 3G, 4G, and LTE mobile networks, providing a globally ubiquitous tool for the movement of data. The technology is network agnostic meaning cost is also reduced, removing the need to agree contracts with multiple operators.
To truly drive IoT adoption in the supply chain, we’re going to need an alternative approach to what we’ve seen in recent years. Costs need to be lowered, and technology simplified. A company looking to develop an IoT solution which involves the communication with devices living on the edge of a network is simply faced with too many complex decisions at the moment, from how to connect through to the safety of that connection. With USSD, there is effectively no internet involved. Hacking is more difficult and costs can be saved in hardware with no need to install microprocessors, in turn reducing power demand in data transmission.
Better supply chain management is critical to future success of businesses across the packaging industry. A constant connection should be the minimum requirement for any solution, not simply an ideal or aim. USSD presents a compelling technology for future implementations of IoT solutions, enabling a simple to configure, constant and reliable data transmission at an affordable cost. In short, better IoT solutions in the supply chain will provide a strong return on investment, and enable a better connected future for the management of the movement of assets.