According to a recent article/analysis from Deloitte, (Smart sensors and supply chain innovation), “Companies should consider investing in smart sensors to increase value capture through their supply chains after carefully prioritizing their business objectives and defining their use cases.” Several recent developments lead them to this recommendation.
The capabilities of today’s smart sensors are a major factor. Technological advances have miniaturized smart sensors, while providing improved performance and energy efficiency and reduced production costs. As a result, the global smart sensor market is growing at a 19 percent annual rate and is expected to reach $60B by 2022.
With improved smart sensor computing capabilities, data processing and analysis at or near the source (edge computing) is possible, thereby reducing the amount of data that moves between the device and a platform. Combined with the ongoing improvements in analytical tools, extracting insights and valuable information from sensor-created data is getting easier for a variety of applications. Also, advanced algorithms continue to expand the capability to predict and prescribe courses of action.
Image source: Deloitte.
Smart sensors have long been considered an essential part of many smart markets including smart homes, smart cars, smart factories, smart cities and more, but their specific application to improve the supply chain is quite new. Similar to their ability to increase the automated collection and processing of data and broaden management visibility in any smart application, when smart sensors are applied across the supply chain, they can help companies reduce operating costs, improve asset efficiency, and generate incremental revenue. Specifically, smart sensors in the supply chain can help organizations:
- Increase operational efficiency through automation
- Reduce repair cost and maintenance downtime through better monitoring
- Perform real-time inventory tracking with improved demand planning
- Inform product development and strengthen product life cycle management
- Enhance customer service by connecting more closely to the customer
While this is not a short-term solution to today’s situation, companies should start to consider how sensor-enabling their supply chains from end to end could avoid problems in the future.