Internet of Things (IoT)

Definition

The Internet of Things (IoT) refers to the interconnected network of physical devices embedded with sensors, software, and other technologies to collect and exchange data over the internet. This network transforms everyday objects into 'smart' devices that can communicate with each other, leading to enhanced efficiency and informed decision-making across various sectors, including supply chain operations.

5 Must Know Facts For Your Next Test

1. IoT allows for real-time tracking of assets in supply chains, leading to better inventory management and reduced costs.
2. The integration of IoT in logistics can enhance route optimization by providing live traffic data and weather conditions.
3. With IoT devices, organizations can automate processes and improve coordination between suppliers, manufacturers, and distributors.
4. IoT technologies contribute to predictive maintenance by collecting data on equipment performance, reducing downtime.
5. The use of IoT can help address global supply chain challenges by providing transparency and traceability throughout the supply chain.

Review Questions

• How does IoT improve inventory management within global supply chains?
  • IoT improves inventory management by enabling real-time tracking of products as they move through the supply chain. Sensors attached to items allow businesses to monitor stock levels accurately, reducing excess inventory and minimizing stockouts. This increased visibility helps companies make informed decisions about reordering and production schedules, ultimately leading to more efficient operations and cost savings.
• Evaluate the impact of IoT on global logistics network optimization.
  • IoT significantly impacts global logistics network optimization by enhancing visibility across the entire supply chain. Through IoT-enabled devices, businesses gain access to real-time data regarding asset location, conditions during transport, and potential delays. This information allows companies to make better routing decisions, improve delivery times, and reduce operational costs while ensuring customer satisfaction with timely deliveries.
• Critically assess how the implementation of IoT can address technological disruptions in global supply chains.
  • Implementing IoT can greatly mitigate technological disruptions in global supply chains by fostering resilience through enhanced connectivity and data analysis. With IoT systems in place, companies can swiftly adapt to unexpected changes such as supplier delays or shifts in consumer demand by leveraging real-time data. This proactive approach not only improves operational agility but also helps businesses identify potential risks early on, ensuring a more robust response strategy to disruptions.

Related terms

Smart Devices: Electronics that can connect to the internet and share data, such as smart refrigerators, thermostats, and wearables.

Big Data: Large volumes of data generated from various sources, which can be analyzed to reveal patterns, trends, and insights for decision-making.

Cloud Computing: The delivery of computing services over the internet, enabling users to store and process data on remote servers rather than on local machines.