In recent years, the Internet of Things (IoT) has revolutionized various industries, and supply chain management is no exception. The Asia-Pacific region, known for its robust manufacturing and logistics capabilities, has witnessed a significant adoption of IoT-based supply chain management solutions.
Addressing Partnership Challenges
More than half of the companies surveyed identified the difficulty of finding the right partners and suppliers as the biggest obstacle to implementing technology. In developed economies like Australia and Singapore, the concern about potential disruption to existing processes and services was high.
In India and Malaysia, where the logistics industry is fragmented, knowing where to start with technology implementation is a concern. Logistics companies want easy-to-implement, turn-key solutions that don't require expensive, time-consuming, and labor-intensive system overhauls. According to a study, the main barriers to adopting logistics asset tracking and shipment/cargo monitoring solutions are software integration challenges with existing infrastructure (52%), a lack of time to implement solutions (39%) and high implementation costs (39%).
A recent survey shows that many logistics companies in the Asia-Pacific (APAC) region still rely on manual processes to track their assets, shipments and cargo. This is despite the fact that manual processes are more prone to creating gaps and vulnerabilities in the supply chain. The survey also found that Japanese logistics companies are leading the way in adopting real-time tracking solutions, with 70% of companies surveyed having moved to tracking assets in real-time with no manual inputs.
Therefore, this move is seen as a critical step in addressing the impending labor shortage in Japan's logistics sector. The survey also revealed that the strongest motivator for adopting logistics asset tracking solutions is to increase customer satisfaction, followed closely by financial benefits such as increasing revenue and gaining a competitive edge in the market.
According to Vivek Vaidya, the Global Client Leader for Mobility at Frost & Sullivan, supply chain and logistics companies in the Asia-Pacific region are at different stages of development when it comes to asset tracking and shipment monitoring. Some companies are investing in advanced technologies like IoT, AI and drones to improve real-time visibility, while others still rely on manual processes. However, those companies that are still using manual processes are likely to adopt modern solutions soon.
Unlocking Real-time Visibility and Efficiency
Moreover, it is predicted that by 2025, there will be 30.9 billion IoT-connected devices installed worldwide. These devices, along with high-speed internet, will provide a foundation for many applications that will benefit original equipment manufacturers (OEM).
A PwC study in 2020 found that 90% of manufacturers saw long-term benefits in digitizing the production process. IoT technology can bring even more benefits to manufacturing, such as faster decision-making and increased productivity, through the use of sensor data and machine learning. They are already seeing an increase in the adoption of IoT among manufacturers. According to Markets and Markets, the global IoT in manufacturing market is expected to grow at an annual rate of 11.9% to reach US$87.9 billion by 2026.
Manufacturers can use IoT in various ways to improve their production process. They can use sensors and connected devices to capture real-time data, which can be analyzed to gain insights and improve efficiency. One way to do this is by measuring Overall Equipment Effectiveness (OEE), which is the percentage of time a machine runs at full capacity. IoT tools can track OEE by detecting downtimes, raw material levels, equipment defects and more.
Additionally, IoT can also optimize supply chain efficiency by installing devices and sensors to collect data on temperature, humidity, compliance and product conditions. This allows manufacturers to take quick action and maximize efficiency. Facility managers can use IoT to get real-time data on occupancy, cleanliness, CO2 levels, humidity and energy usage. This helps them optimize power usage, air quality and maintenance costs.
Furthermore, the IoT can also predict potential issues in the future by using machine learning algorithms and artificial intelligence. This allows manufacturers to take preventative action instead of reacting to equipment failures, resulting in major cost savings. To deploy IoT solutions, reliable mobile connectivity is essential. Singtel can help manufacturers with their network connectivity needs by providing: multi-domestic connectivity solutions; a single eSIM; a unified platform for managing, reporting and billing; and local experts.
Navigating Impact of COVID-19
The COVID-19 pandemic has caused major changes in demand and supply for the manufacturing and logistics industries. Airline travel and hotel occupancy rates have decreased significantly, while the demand for personal protection equipment has increased by 300%. These changes, along with other cyclical factors such as labor costs and foreign exchange movements, have led to rising input costs.
COVID-19 has accelerated pre-existing trends and highlighted the need for better risk management in supply chains. Companies are now holding more safety stock and using predictive analytics to forecast demand and manage supply. They are also simplifying their product lines and creating more resilient supply chain networks. Industry 4.0 offers manufacturers the opportunity to optimize their operations quickly and efficiently through the use of IoT technology. By connecting different parts and analyzing vast amounts of data, companies can better understand what needs attention and what needs to be done.
