Co-authored by Nitesh Arora, Head of Marketing at Cloudleaf, Inc.
The consumer products industry may well be the greatest beneficiary of IoT. No other sector faces more pressures from more directions with more frequency.
Continual shifts in consumer behavior, business models, and cost structures are making constantly increasing demands on consumer products. Given this, the consumer products industry needs the ability to adjust quickly to these changes, and that is only possible with real-time visibility into its supply, manufacturing, distribution, and the end-to-end value chain.
Do more faster and for less: IoT adoption in consumer products
The business case for IoT encompasses manufacturing, quality control, logistics management, and inventory movement – all in an always-on consumer market of constantly changing consumer patterns. For CPG companies, strategic initiatives are especially numerous.
- Improving product lead times
- Alleviating inventory shortages
- Balancing supply and demand
- Reducing losses due to recalls/spoilage/leakage with proper condition monitoring
- Improving supply chain efficiency through data insights.
Take food producers, for example. The product must not only meet market demand, but the required freshness of its ingredients means that it has a limited shelf life. The need to keep shelves stocked means more frequent shipments. The timing of those shipments means a fresh product must always be on those shelves. Over- or under-supply means losses – and potentially, a damaged brand.
On the supply side, the ability to track the location and environmental condition of ingredients enables a manufacturer to ensure not only just-in-time delivery of fresh ingredients but also to minimize rejection of shipments because of environmental damage.
On the demand side, the ability to monitor the sale of products in real time at each vendor location provides short-term information on demand. Over time, enough data can be collected to make reliable predictions. Sensors at the supplier and distribution locations can also be used to obtain environmental information, ensuring that the product is being stored in a manner that ensures its quality.
All of this requires connectivity throughout the value chain –– from suppliers, delivery vehicles, to distribution centers. Connectivity itself needs to be managed to ensure it is both secure and scalable.
Poor connectivity management can result in unreliable data, which can decrease production efficiency and the accuracy of demand predictions. In an extreme case, poor security could result in a manufacturer’s supply chain being intentionally compromised.
To achieve secure reliable connectivity, the following questions are critical:
- Will the connectivity support integration with the supply chain applications? If so, connectivity can be adjusted in real time to optimize the application – and to protect it from misuse.
- Does the connectivity scale across multiple networks and territories? Often, applications require multiple networks in a single country to operate with the highest level of resilience.
- Will the solution scale? The connectivity should enable management of deployments of hundreds to even millions of connected devices, while also allowing control of cost and access.
For CPG companies, implementing a scalable IoT solution on a robust connectivity platform can deliver unprecedented ROI, thanks to the ability to effectively match supply and demand while streamlining operations and reducing material losses across a global value chain.
With digitized commerce at the edge, companies can now predict disruptions before they happen.
Cloudleaf is an emerging leader in digitized Commerce/Edge IoT solutions, offering a mesh of intelligent IoT sensors, gateways, and cloud applications. SAP IoT Connect 365 is a managed, cloud-based mobile service that simplifies connectivity of the IoT through a single contract and connection.