The supply chain is littered with hurdles that impact a company’s profitability. But an IoT-powered connected supply chain enables producer, manufacturers, retailers and logistics businesses to significantly increase ROI.

The Internet of Things (IoT) is powering a revolution in business. The rapid adoption of digital infrastructure is already five times faster than electricity or cell phones. In 2008, there were already more things connected to the internet that there were people on the planet. By 2020, the amount of connected things is expected to reach 50 billion. Big data, collected through a global network of connected devices, is already being used to tackle some of the biggest problems facing businesses today. This includes the logistics industry.

By using IoT to implement a connected supply chain powered by the Sigfox network, businesses can overcome a number of challenges currently impacting their growth and profitability.

The IoT Overcomes Three Key Supply Chain Challenges

Regulatory requirements become easy to meet

Organizations involved in logistics are facing tougher and tougher regulatory standards. Failure to meet these standards can result in lawsuits, reputational damage, financial losses and restrictions on a company’s ability to move into new and foreign markets.

The connected supply chain allows organizations to better meet regulatory requirements and provide proof of their achievements. As discussed, connected sensors allow operators to track transportation conditions constantly. If an error occurs, two-way communication between devices allows operators to fix the problem, thus saving the assets from falling foul of regulatory rules. Even if no intervention is needed, data from the regular updates is stored in the cloud for use in future reports to regulatory bodies. Reports can be automated if required and generated quickly to ensure movement into new markets is a swift and as smooth as possible.

Quality control improves and ROI increases

Perhaps the biggest challenge facing the supply chain today is the billions of dollars lost when goods and products are transported in less-than-optimal conditions.

But with a network of connected devices at every point of the supply chain, producers and retailers can receive real-time notifications on the environmental conditions of their products that mean far less waste. This can be particularly effective in the cold-chain, where damage occurs most in food produce. India, for instance, suffers losses of up to $4.4 billion every year when fruit and vegetables are not kept at the correct temperature. Sigfox partners enable organizations to react quickly and lower temperatures if they exceed certain levels at any point during the supply chain.

Risk mitigation and company reputation improves

It’s not just the food produce supply chain that can be improved with IoT. The improper transportation of chemicals, oil, hazmat substances and biological samples can be dangerous to a wide range of people, from the driver right through to the end user.

With IoT powered supply chains, logistics companies can make sure that dangerous materials are stored correctly from the moment they are dispatched to the moment they arise. As a result, they will ensure the safety of every employee involved in the shipment. If conditions make a breakdown in the chain, such as a spill more likely, real-time alerts allow quality controllers and on-hand staff to react quickly to limit the damage. In doing so, the health of employees, the public and the environment is protected, and so is the company’s image.

The Connected Supply Chain in Action

To examine the real potential of an IoT-powered supply chain, let’s look at an example of how transport monitoring, quality control and two-way communication significantly improve a food retailer’s ROI.

When problems arise in the supply chain of these kinds of shipments, press coverage tends to be universal with companies facing heavy backlashes. But a network of connected devices and sensors offers the opportunity to catch and resolve issues within these supply chains before severe damage occurs.

WeBuyFood is a Wholefoods retailer that purchases fruits and vegetables from around the world. In particular, it sources bananas from India. WeBuyFood purchases the produce from local farms in India and relies on a third-party logistics company to transport the product from India to their base in the U.S. To preserve the freshness of the product and ensure that the bananas ripen in time for American consumers, the temperature of the produce must be strictly controlled throughout the supply chain. But what happens when, halfway through the chain, a large shipment of the bananas is stored in a warehouse where the cooling system malfunctions and the produce exceeds the temperature limit?

What happens in a traditional supply chain?

In a traditional supply chain, the bananas will ripen too early unless someone catches the malfunction quickly. If they don’t, the entire shipment will spoil and won’t be able to be sold in the U.S. Not only has WeBuyFood lost the money it originally paid for the produce in India, as well as the cost of shipment; it will also suffer reputational damage in the US. Because all of their bananas have spoiled, WeBuyFood stores won’t be able to sell bananas in some of their stores for several weeks. This will annoy customers and damage WeBuyFood’s reputation. Of course, this means a loss of revenue when shoppers choose to buy their fresh produce from other stores that do have the supply of fruit and vegetables that they want.

What happens in a connected supply chain?

This could all have been avoided if WeBuyFood worked with a Sigfox end-to-end solution provider to create a connected supply chain. When the warehouse cooling system malfunctioned, sensors within the warehouse would have alerted quality controllers in both companies to this issue. This would have allowed them to contact warehouse staff, notify them of the problem and have their shipment moved to a functioning storage facility. The produce would have been preserved, stores would have their supply of bananas, and customers would have remained satisfied. For the investment in a connected supply chain, both the retailer and the third-party logistics provider didn’t just save business costs in terms of the purchase price of the bananas and the cost of transport; they also saved themselves from reputational damage that could have significantly impacted their bottom line going forward.

Benefits of a Connected Supply Chain

The Success of the Connected Supply Chain Relies Upon the Network It Connects to — and Sigfox Offers the Perfect Solution

With secure, global coverage, Sigfox enables organizations and partners to access one of the easiest-to-use and most cost-effective IoT networks in the industry. Supply chains vary dramatically depending on the product, but no matter what you’re transporting, Sigfox can help you achieve: