By Michael Belfiore, Contributor
Among the many disruptions caused by the pandemic, supply chains are stretched to the limit as customer demands evolve and spike in areas no one could predict. Think more flour and less bread for newly inspired home bakers and more bikes and fewer cars for people whose gyms have closed and aren’t commuting. The shifts have revealed weaknesses that supply chain managers are scrambling to remedy.
A survey of supply chain leaders in a variety of industries and around the world by McKinsey & Company found that three-quarters of them have been hit with supplier problems as well as distribution issues. One of the survey findings points to a reason why: 85 percent of supply chain executives report struggling with inadequate digital technologies. In a nutshell, they don’t have the data they need to optimize their supply chains, nor the technology to collect it.
75% of supply chain leaders and respondents have been hit with supplier and distribution problems since the pandemic. One survey finding indicated that 85% of said supply chain struggles were related to inadequate digital technologies..”
—McKinsey & Company, 2020 Supply Chain Survey Report
That data is needed to speed up supply chains, in effect taking them to the next level—not just for the current situation but for any that might arise in the future. The answer could lie in demand chains, in which consumers drive the production and distribution of products rather than just manufacturers. But getting there will require companies in just about every industry to pay close attention to demand signals—that is, data about inventory, demand, and product usage. Unfortunately, the level of detail needed doesn’t yet exist.
However, emerging technologies such as battery-free, Bluetooth-enabled sensors from fabless semiconductor company Wiliot—hold promise for delivering the data needed to enable the rapid response that supply chains need to get products where and when they’re needed even in times of disruption. It all comes down to fulfilling the promise of the Internet of Things (IoT).
Don’t Call It IoT
Robert Schmid, a managing director at Deloitte, founded the consultancy’s IoT practice, which he continues to lead. Even so, he doesn’t like the term IoT. “There was never the Internet of People,” he says. “So, why do we call it the Internet of Things?” He does believe that more data produced by more “things” in the world will make just about everything in the industrialized world more efficient, including supply chains.
At the most basic level, take finding objects: Suppose, Schmid suggests, airports could locate every wheelchair any time; then passengers who needed them could get them that much faster. Apply that to industrial tools, vehicles, medical equipment, and more, and any number of industries could pick up speed. Taken to the extreme, what if every product on every shelf could report its location, and even such data as its temperature and number of pickups since its arrival? As Schmid points out such data could, for example, could speed the delivery of viable vaccines by providing real-time data on how long a given vial has been exposed to warm, potentially damaging, temperatures.
Suppose manufacturers and retailers know what’s happening with every product in real-time. In that case, they can meet spikes in demand as they happen, dialing back production and distribution on less popular items and adding capacity where needed. As a bonus, in an era in which consumers buy online more than ever before, such tags could also give physical stores a leg up with the kind of data that has only been available online. Every time a consumer picks up an item, for example, a retailer could register interest in the same way that online retailers track clicks.
Often referred to as Industry 4.0 or the Industrial Internet of Things, this emerging suite of technologies at work in factories and distribution centers has the potential to streamline supply chains. Such technologies include:
- Predictive maintenance, in which factory machines and other equipment tell managers that they are about to break, instead of unexpectedly taking down production lines. Predictive maintenance can also help manufacturers defer unnecessary planned maintenance.
- Asset tracking, letting distributors keep tabs on pallets and trucks after they leave warehouses. Keeping tabs on expensive items within large distribution centers also saves time and costly manual hunts for misplaced items. The more affordable tracking technology that Wiliot represents could also extend this capability to lower-value items such as laptops and other devices in schools.
Data generated in such implementations, in turn, enable a host of applications, including:
- AI-assisted ordering, for consumers, retailers, and manufacturers that can respond more efficiently to spikes or slowdowns in demand, based on ordering trends and pallets of inventory leaving factories and distribution centers.
- Streamlined, efficient micro-distribution centers that bring goods closer to consumers based on regional demand.
But such technologies have been slow to travel the last mile from the distribution center to the store and consumer. That’s because they’ve been too expensive to add to large numbers of individual, low-cost items, according to Gary La Point, professor of supply chain practice at the Whitman School of Management at Syracuse University. “It never really materialized to the extent that was forecasted back in the early 2000s,” he says. Cheap, battery-free tags using existing infrastructure such as routers and smartphones rather than more expensive specialized gear would solve that problem, La Point continues.
Bluetooth tags from Wiliot, according to Schmid, still represent the only available solution that:
- Are the size of postage stamps, allowing them to stick to just about anything, including low-cost consumer goods.
- Cost pennies per tag, enabling large scale use.
- Harvest energy from ambient radio waves, doing away with costly and bulky batteries.
- Connect to any other Bluetooth-enabled device, including mobile phones and tablets, enabling real-time tracking of anything they’re stuck to.
- Have the backing of major manufacturers and investors, including Verizon, PepsiCo, and Maersk, to the tune of more than $75 million.
Each tag includes a vanishingly small processor, temperature and movement sensor, and a radio transmitter. Notably absent is a battery, saving weight, bulk, and cost. Instead, each tag gets its power wirelessly from a nearby external source, such as an internet gateway.
The possibilities for the tags are endless, believes Stephen Statler, senior vice president of marketing and business development at Wiliot. Potential applications include clothing labels that can replace conventional anti-theft devices in retail stores and interact with smart washing machines to set wash cycles and suggest color pairings and locate lost items through a smartphone app.
Another possibility: shampoo and other bottles that know when they’re running low based on the number of times they’ve been picked up, allowing them to reorder themselves. “To be fair, Amazon pioneered and attempted this with Dash buttons,” Statler says. Citing low demand, Amazon discontinued the physical buttons that could order individual products in 2019. But Statler thinks products that can order themselves might succeed where stand-alone buttons failed.
New Capabilities for a New Era
The first Wiliot tags out of the gate could take the form of smart labels for bottles of vaccines, says Schmid, who has been exploring Wiliot’s potential for Deloitte clients.
“A battery-less computer that you can stick on anything, and it gives you location, temperature, and other environmental variables, depending on what you need is just super, super interesting, because, to me, that’s a disrupter.”
According to management consultancy McKinsey & Company, pandemic-induced supply chain improvements—many digital—now in progress will provide lasting benefits for consumers, retailers, and manufacturers alike. New technologies providing more data-on-demand signals point the way forward.