How New Supply Chain Technologies Can Save You Money
In today’s fast-paced business world, supply chain management is more important than ever. Companies are under constant pressure to reduce costs, improve efficiency, and deliver products to customers faster than the competition. Fortunately, a new wave of supply chain technologies is emerging that can help businesses achieve these goals and save money in the process.
One of the most promising technologies for cost savings is the Internet of Things (IoT). By connecting physical objects like trucks, warehouses, and even individual products to the internet, IoT sensors can collect vast amounts of real-time data on the supply chain. This data can then be analyzed using artificial intelligence (AI) and machine learning to identify inefficiencies and optimize operations.
For example, let’s say you’re a clothing retailer that ships products from a central warehouse to retail stores across the country. By equipping your trucks with IoT sensors, you can track the location, temperature, and humidity of each shipment in real-time. If a sensor detects that a truck has broken down or is stuck in traffic, you can automatically reroute other trucks to pick up the slack and ensure that stores don’t run out of inventory.
IoT can also help reduce waste and spoilage. If a sensor detects that a shipment of perishable goods is in danger of spoiling due to a temperature excursion, you can quickly reroute it to a closer distribution center or discount it to sell it before it goes bad. This not only saves money on the lost goods but also avoids the cost of angry customers and damaged brand reputation.
Another area where new technologies can save money is in warehouse automation. Traditional warehouses rely on manual labor to pick, pack, and ship orders, which is slow, error-prone, and expensive. But a new generation of robotic systems is changing the game.
Automatic storage and retrieval systems (AS/RS), for example, use cranes and shuttles to automatically store and retrieve pallets and cases from high-density storage racks. This allows warehouses to store more inventory in less space and reduces the need for manual labor. One company, Siemens, reported a 60% decrease in warehouse space and a 40% reduction in staffing costs after installing an AS/RS system.
Blockchain technology is also making waves in supply chain management. By creating a secure, decentralized ledger of transactions, blockchain can help companies track goods and payments more efficiently and reduce the risk of fraud and errors. This can lead to faster payments, fewer disputes, and lower administrative costs.
For example, Walmart and IBM recently demonstrated how blockchain can be used to trace the origin of mangoes in the U.S. in just 2.2 seconds, down from 7 days using traditional methods. This kind of traceability is essential for quickly identifying and containing food safety issues, which can be extremely costly for retailers and manufacturers.
Of course, implementing these new technologies requires an upfront investment, and there are always risks involved in adopting new systems. But the potential savings are significant, and many companies are finding that the benefits far outweigh the costs.
For example, Autostore, a leading provider of AS/RS systems, grew by an astounding 80% from 2020 to 2021, despite supply chain constraints. This suggests that more and more companies are recognizing the value of warehouse automation and are willing to invest in it to gain a competitive edge.
