This is the second post of our blog series in which we will discuss the impact of the digital economy on the wholesale distribution industry. This piece focuses on the significance of the internet of things (IoT) and its ability to enhance operations across a distributor’s business, leading to several competitive advantages from increased supply chain transparency to improved customer service.
As highlighted in our predictive analytics post, it is important for us to define the “digital economy” in this series. Economist, Thomas Mesenbourg, describes the digital economy as the economic landscape based on utilization of computing technologies, with primary components being infrastructure, e-business processes and e-commerce.
As technology advances, more physical devices are enabled with network connectivity amongst other technologies: software, sensors and more. The internet of things (IoT) is defined by this growing ecosystem of internet-enabled devices. IoT offers distributors increasing opportunities to collect, exchange, analyze and interpret data in real-time. This robust access to data will result in opportunities to further enhance and improve operations. Given the importance of operational efficiency within the wholesale distribution industry, distributors stand to gain substantial benefits from internet-enabled technologies.
IoT as a Competitive Advantage
To illustrate some of the benefits of IoT, let’s discuss the competitive advantages that a smart warehouse can offer distributors. From forklifts to conveyor belts, there are several pieces of equipment required to operate an efficient and effective warehouse. Most, if not all of this equipment can be augmented with IoT. Imagine the entire pick, pack and ship process connected with internet-enabled technologies. Connected shelves enabled with sensors and integrated with devices within warehouses and corporate offices will allow distributors to more closely monitor inventory levels from procurement to distribution. Sensors implemented within conveyor systems provide real-time updates on the movement of goods or issues within the machinery itself. Together, these technologies can provide instant transparency to warehouse inventory leading to significantly reduced stockouts and increased inventory turns.
Combining IoT and Predictive Analytics
Further integrating this technology with a predictive analytics solution accessible from a warehouse employee’s mobile device or the corporate office, allows distributor’s to avoid mechanical issues in advance, analyze the movement of goods and increase overall operational efficiency. Even forklifts can become connected devices, providing real-time updates on each operator’s efficiency, which goods they are moving, the location of each forklift and more. Imagine integrating these forklifts with the above analytics solution to improve pick efficiency by analyzing warehouse layouts and the most efficient routes or even simply pick accuracy by ensuring forklifts acquire the correct products ahead of any mistakes. Together these technologies enable distributors to avoid costly downtimes, understand operational efficiencies and capitalize on opportunities to improve their supply chain.
Practical Application of IoT
Additionally, internet-enabled technologies provide significant benefits to managing the transportation of goods. To be a leader in the wholesale distribution industry, firms must deliver high-quality products on time and in compliance with all applicable regulations. For example, food wholesale distributors are required to transport certain foods at regulated temperatures to ensure their goods do not expire upon delivery. These distributors are not only required by their clients to provide the timely delivery of their product, but are also required to comply with all government regulations regarding the transportation of food. Without continuous, and potentially timely, checks from a driver in route, a distributor is unaware of their food quality and integrity of the goods within each truck, until they arrive at their destination. Did the cooling system break down? Was the back door left slightly ajar? Imagine sensors within each truck immediately alerting the driver, dispatcher and corporate office when the temperature changes. At all times, each truck can be monitored to ensure the integrity of their food and avoid costly surprises upon delivery. Moreover, installing smart devices elsewhere within these trucks can provide distributors with significant competitive advantages beyond the oversight of goods, including: improving customer service by providing clients with up-to-date information on the movement of goods and estimated delivery times, in addition to mitigating the risk of costly transportation issues by immediately identifying them as they arise and providing alternate solutions.
These are just a few examples of practical applications, but the same principles can be applied to any part of a wholesale distributor’s operations. Understanding the efficiencies and inefficiencies of your supply chain is crucial to improving your company’s overall operational efficiency and productivity. Furthermore, combining this understanding with intimate knowledge of leading technologies will unveil the most impactful opportunities to enhance your supply chain.
In the next post, we will cover the significance of mobile capabilities and their potential to improve customer engagement, supplier engagement and internal processes.
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