Supply chains suffered from disruptions worldwide due to the COVID-19 pandemic. Government restrictions that limited human activity in general severely affected both the manufacture and movement of goods. Shortages of products ranging from protective equipment to exercise equipment were quite rampant at the height of the lockdowns of early spring 2020.
Thankfully, countries are already starting to reopen their economies, and increased human activity is expected to ease some of the supply chain woes. For most enterprises, however, the disruptions emphasized the need for supply chains to operate more efficiently and become much more resilient as they adjust to the new normal.
Many are now actively looking into smart supply chains as a way forward. Central to such efforts is data. Organizations must be able to gather as much information as possible on what transpires across the various stages of their supply chains. The information can be analyzed to identify and predict issues and determine specific solutions. Yet, many supply chains lag behind in this regard.
Monitoring technology is changing this by enabling stakeholders to gain better visibility of their supply chains. Data logger devices can now accurately monitor the condition of materials and products throughout their journeys. These gadgets are now also becoming more available and accessible, allowing companies of all sizes to see the benefits of true quality assurance across the various stages of the supply chain.
How Inefficiency Leads to Waste
Even prior to the pandemic, many supply chains already contended with challenges of ineffectiveness and waste. Industries that deal with perishable goods like food and pharmaceuticals lose billions of dollars yearly due to supply chain inefficiencies. About 30 percent of food produced for human consumption end up as waste due to issues in the supply chain. Similarly, 30 percent of scrapped pharmaceuticals can be linked to logistics issues.
This waste can be attributed to a few common factors. Factories and manufacturing facilities may order more materials than they are able to process. Even with proper storage, these materials already have short shelf lives, so much so that they have to be discarded if left unprocessed.
Other incidents can also occur when products get shipped out. Delays in transportation, poor packaging, lapses in temperature control systems and rough handling by logistics personnel can all create adverse conditions that can damage sensitive goods.
Food and drugs are also heavily regulated. If these are found to be in a degraded state, regulations typically require that they be discarded or destroyed. Aside from the cost of lost goods, supply chains also have to shoulder the cost of disposal.
How Data Loggers Work
What usually prevents supply chains from solving these inefficiencies is the fact that it can be difficult to identify what specifically causes them in the first place. Many supply chains involve multiple parties and coordination and sharing of information among these parties can be a challenge.
Data loggers and condition monitoring technologies can help mitigate this by providing companies with accurate information on the state of their goods as they move through the supply chain. Loggers are now equipped with various sensors that can track data on conditions such as temperature, humidity, ambient light and even physical shocks and tilt. Some are also equipped with GPS that can accurately track the physical location of a shipment.
They are now also designed to be portable and discrete enough to be placed on each package, allowing for monitoring at parcel-level. Information from these loggers can now also be quickly extracted through RFID or QR scanning using ordinary mobile devices or portable scanners.
The data can be sent to servers online, allowing users to readily access information in near real time.
How Data Can Lead to Efficiency
The data generated from these devices can help create a clear picture of a supply chain partner’s effectiveness and efficiency.
The information is particularly useful for incident identification. This data can determine if products stray outside their ideal storage conditions. Companies can be alerted if such incidents occur so that they can quickly decide if packages have to be recalled immediately. Recalling products at earlier stages of the journey is typically less costly and prevents consumers from potentially using degraded or unsafe products.
The data can also help identify at which stage of the journey these incidents happen and who needs to be held responsible, according to the terms of service level agreements. Process improvements such as better packaging can be made if they are seen to cause the incidents. Service providers and suppliers that continuously mishandle shipments can also be made accountable for the losses and can be replaced
with those who can do a better job throughout the chain.
Data can also be correlated with other information. Combined with traffic and transit data, the information can be used to optimize routes and schedules.
How all Stakeholders Benefit
Smart supply chains can benefit every type of stakeholder involved. Manufacturers, packagers, distributors and shipping companies are generally able to enjoy healthier profit margins from efficient processes. Considering the current business climate, any positive impact on their finances is an especially welcome development.
Manufacturers can lessen their waste and deal with fewer returns and recalls. Logistics providers can improve their processes. Distributors and retailers can also be assured that they will have ready and fresh supplies to meet customer demand and continue to do businesses – even during times when inventory is under strain.
Customers also stand to gain from these efforts. Savings from less waste can be passed on to consumers by these companies in the form of cheaper prices. And, for many, even just the prospect of getting their needs in ample supply and in safe conditions is significant enough of a benefit during these uncertain times.