Role of Internet of Things and Robotics in Supply Chain Management

This essay discusses about the role of Internet of Things and Robotics for improving and transforming the supply chain management activities of firms. It includes the related challenges and opportunities which come with the adoption of these two technologies. The discussion is supported by taking the companies’ examples from real business world.

Running Head: SUPPLY CHAIN STRUCTURE 1
SUPPLY CHAIN STRUCTURE

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Introduction
Nowadays, global supply chain is emerging at a fast rate. Modern managers are not only facing
the traditional challenges like; speed, cost, market share and quality but also they have to deal
with the changing horizon. So, it is very important that these managers work, adapt and focus on
those global trends when developing their supply chain processes and networks (Bode and
Wagner, 2015). There are some trends like emerging markets, millennial customers, mega cities
and electronic commerce while evaluating the disruptive forces. There are various disruptive
tools which are transforming the supply chain management process of modern companies. Some
of these technological trends are such as Big Data, Internet of Things, Robotics, Artificial
Intelligence, smart products, smart sensors, Blockchain etc. These are the major disruptive
technologies which are transforming the supply chain management of both local and
international companies.
For this essay, two most useful disruptive technologies are chosen i.e. Internet of Things (IoT)
and Robotics. This essay discusses about the role of Internet of Things and Robotics for
improving and transforming the supply chain management activities of firms. It includes the
related challenges and opportunities which come with the adoption of these two technologies.
The discussion is supported by taking the companies’ examples from real business world.
Role of Disruptive Technologies in the Transformation of Supply Chain
Management
Technology has a significant role in the foundation of supply chain process of prominent
organizations. It is becoming very important for the top managers. They see that technology can
change the way they manage and organize their supply chain processes and strategies. Supply
chain management is the process of managing the flow of products and services and it includes
all the processes which transform the raw materials into finished products (Rushton, Croucher
and Baker, 2014). Traditionally, the organizations have relied on and engaged in using third-
party logistics contractors to make sure that products get from one location to another (Carter,
Rogers and Choi, 2015). It was an affordable solution, but surely it is open to human mistakes,
considering that all tracking, receipt, shipping etc. have been completed manually.

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Today, the companies have the smart technologies with the potential to perform difficult tasks at
greater speed and with the higher accuracy. The combination of cloud computing, hardware
advancements and analytics have developed a new way for practicing the delivery and
fulfillment operations, driven by Internet of Things. IoT is basically a network of objects which
have been technologically instrumented with the sensors to gather, interchange and send the data.
This collection of data gives the workers access to the real-time data (Zhou and Piramuthu,
2015). In the future, IoT will assist in connecting what has formerly been disparate. In the supply
chain process, IoT will help in monitoring every person, product and process from the starting of
supply chain to end. Specifically, it can be more beneficial in the warehouses and for the purpose
of inventory. Now, IoT is entering into global supply chain industry also. As per the report of
MHI and Deloitte, only 22% of supply chain managers state that they are utilizing this disruptive
technology i.e. IoT. 79% stated that they are planning to use it in the timeframe of next five
years. It will enable the sellers and buyers to trace the pallets, containers, boxes and other high
value items as they are moved from one place to another (Forbes, 2018).
In addition to this, modern organizations can use robotics to make their supply chain more
effective and smoother. They can use the combination of IoT and robotics for transformation of
supply chain and logistics. Nowadays, one third of the companies are using robotics in their
supply chain processes and this number will increase to three-fourth in the timeframe of next 5-
10 years. Robots are one of the major disruptive technologies that can handle various tasks and
incorporate with automation mechanisms so that different supply chain functions can be
streamlined greatly (Mehta, 2018). These firms are looking for different ways to implement
robotics like autonomous vehicles, automated pallet cars and drones. More widely, supply chain
managers prefer to use available options which enable the employees to constitute robots in order
to collaborate the data-robot as a service. They can use IoT for establishing connection among
different robots which are involved in the process (Santagate, 2018).
For the firms having geographically dispersed business, uncertainty within supply chain
processes is always a great challenge. Moreover, order fulfillment can be delayed by various
factors which are tough to control or predict. The major reason behind stock shortages and late
deliveries is the traffic delays. By using sensor-used IoT solutions, the speed and locations of
vehicles can be tracked and alerts for maintenance can be provided. There are various

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organizations which face issues in maintaining the temperature stability in the case of perishable
products. Fresh fruits and vegetables might last a week with no changes of temperature. In order
to minimize this type of wastage, the companies can use IoT connected technology. For supply
chain visibility, it enables the interchange of real time data with different parties in supply chain,
moderating the disruption. Along with optimization of delivery times, the firms can practice IoT
to make sure that products are not damaged during the shipping operations and eliminate the fake
products from the supply chain (Korolov, 2018).
In supply chain management, one of the biggest trends is asset tracking that provides them the
processes to take effective decisions and save money and time. Firms have used barcode
scanners manage and track their stock that is now substituted by different asset tracking solutions
such as RFID (radio frequency identification) that offer more usable and vital information when
collected with IoT technologies. In the future, new GPS and RFID sensors will be able to trace
the goods from floor to store. The manufacturers can utilize them to get the granulated data.
Recently, Dubai’s DP World has taken various initiatives in adopting disruptive technologies by
using ENOC’s RFID technique that helped it in reducing the fueling duration for its fleet.
Moreover, it has improved the efficiency of transferring products all over the world by making
investment in higher speed transportation i.e. Hyperloop. The organization believes that it will
cut down the duration that it takes to supply the cargo (King, 2017).
The information attained from IoT can assist the organizations to get a close grip on quality
management and control, product forecasting and on-time deliveries. Amazon is the best
example that is using IoT in its supply chain planning. As each and every order of Amazon is
unique so it manages different products of many weights, sizes and shapes. The employees of the
company are using to explore the warehouse floors for the scanning of each product. Currently,
they are using IoT connected robots to recognize the goods by scanning QR codes using built-in
cameras (Govindan, Soleimani and Kannan, 2015).
Additionally, the companies can have future opportunities to get the benefits of collaborative
robots which exist via supply chain, consisting of production and warehouse operations.
Implementation of robotic system in the network of IoT can enhance the process efficiency,
eliminate the errors, improve the safety by releasing the people from harmful activities and
decrease the machinery interruption. In comparison to traditional robots, collaborative robots are

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most suitable to low volume manufacturing. They can use them for just-in-time inventory
practices. Moreover, robots can offer different opportunities and advantages in the packaging and
palletizing activities. Today’s firms are seeking for automated solutions so that they can enhance
the efficiency and resolve the issue of labor shortage. In this situation, robotic solutions are
becoming very important for these applications. These robots can be stationary or attached on
automated guided vehicles. Amazon is among the organizations that is using this disruptive
technology for many years. This e-commerce giant is using over 100,000 robots for various tasks
in warehouse covering palletizing and picking (Pooler, 2018). The processes which need moving
and lifting the heavy loads like shelving are perfect aspects to adopt robotic solutions. Apart
from Amazon, DHL is a leading player in supply chain and logistics sector in UAE that is also
using this disruptive technology in its supply chain process particularly in packing, picking and
managing operations (Pooler, 2018). Recently, DHL has entered into partnerships and created
pilot programs incorporating collaborative robots. Supply chain department of DHL UAE bought
a dozen robots from Rethink Robotics to assist its customer operations with the co-packing
processes (King, 2017). Wal-Mart is one of the organizations that uses most significant and
effective supply chain process. It has the most successful supply chain and logistics process by
implementing advanced technologies. This organization is converting its applications and
websites to operate on Azure and utilizing the tools of Microsoft so that they can its management
capabilities. Also, it is using these tools to maintain its supply chain processes and control the
IoT devices across its warehouses and stores. Microsoft is a major company that is assisting Wal-
Mart in the development of cashier less stores (Wu, et al, 2016).
Within the timeframe of next 2 years, 72% of the firms are planning to use Robotic Process
Automation (RPA) so that they can minimize the costs, decrease the transaction times, enhance
productivity and enhance the compliance levels. The report of ISG study states that this
disruptive technology is enabling for 34% for invoicing, 43% decrease in the resource required
for order to cash procedures and 32 percent for talent and vendor management. Continuous
improvements in development of this disruptive technology have great capacity for managing the
supply chain. Integration of knowledge based capabilities with robotics is enabling the robots to
work like human employees in supply chain and logistics processes (Ross, 2016).

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Today, supply chain planning and supply chain strategies have shifted from manual data
gathering and lack of communication between every stop in supply chain (Boukherroub, et al,
2015). It is shifting toward more predictive and efficient way of processing the information so
that they can save money and time and enhance the customer relations and finally, deliver the
best items. About the contribution of this technology in the future transformation of technology,
it can be stated that this automation can include automated delivery delay escalation, change
request for the slots of transports and customer service interactions. For example, a major food
producer in UAE is seeking to streamline its suppliers and customer relationships. With the
implementation of Robotics, it is able to automate various processes on customer side and supply
side (Barratt, 2016).
Furthermore, it can be stated that IoT sensors can give more accurate than the human beings. For
example, Amazon is utilizing Wi-Fi robots to identify QR codes on its good so that it can triage
and trace its orders. The technological systems analyses that products are to be arranged for
Amazon Prime orders and in this situation, robots go for the rest. When it is placed, employees
can emphasize on restocking the shelves and packaging orders. This is robots and people
working side by side via different devices of IoT (Pooler, 2018).
In this way, it would be right to state that modern companies are using IoT and its devices in the
transformation of their supply chain and logistic operations. Apart from above benefits and
opportunities, safety and security are other significant considerations. All the data should be
protected from the wrong hands or being hacked. IoT sensors will only send the particular
information that should be detained in private and secure cloud environment (Krishnan, 2018).
Apart from these opportunities and advantages, the companies may face several challenges in
adoption of these disruptive technologies. Implementation of these technologies is the biggest
challenge for the firms. Till now, IoT and disruptive technologies are on the research level so it
is not very easy to incorporate it in company’s supply chain practices. Due to this, there may be
possibility that many IoT devices and sensors are poorly planned and implemented using the
diverse technologies and protocols which may cause complex configurations. It can cause
maintenance costs to the organizations. One of the major challenges is that it can increase the
costs of operations for the firms as they need to install advanced technologies in their processes
and activities (Lee and Lee, 2015). Moreover, the company needs to face the challenges to the

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training programs. After implementation of above technologies, the firms need to conduct
training and development program for the employees so that they can learn that how they can use
IoT devices and robotic technologies in operations. In addition to this, there may be issue related
to employee resistance to change as sometimes employees oppose to accept technological
changes. The employees working in supply chain system resist learning about new and advanced
technologies. They are not familiar with updated technologies and systems that lead them
towards change resistance. It can be the major reason that can stop the company from successful
implementation of IoT and other disruptive technologies (Zhou, Chong and Ngai, 2015).
It had been seen that technological innovations have higher rates of failure and even in positive
situations; they cause unprofitability in the beginning stage. Thus, it is important that firms do a
research to ensure that new disruptive technologies are supported by the appropriate processes.
The major managerial challenge in adopting disruptive technologies is to match the technological
capabilities of firm with new and current market opportunities (Ivanov et al, 2017). Another
challenge of these technologies is that it can harm the privacy of company’s confidential data. In
this, all of the parties involved in supply chain will be connected through IoT sensors and
devices. In this process, the data can be hacked by the competitors or other hackers.
In the future of IoT, connecting various devices will also be a biggest threat that can challenge
the structure of communication models among different parties in supply chain processes. Any
organization adopting disruptive technologies will need heavy investment and spending in
maintaining the sensors and cloud servers so that they can handle the information exchange
(Witkowski, 2017). If there will be unavailability of servers can down the entire system of
supply chain. In the implementation of robotic automation, the companies need to change their
warehouse layouts so that they can lodge the new systems and machineries. With the robotics
and highly automated robotics, the companies may confront a software glitch that can stop its
whole operations. It can be seen that human employees can evaluate the conditions and use their
critical thinking and creativity to produce solutions to the supply chain and ware house issues
(Barratt, 2016). Robots are not flexible to the changes occurring in the working environment and
supply chain processes.
In this way, the disruptive technologies i.e. Internet of Things and Robotics can offer various
challenges with extensive opportunities and benefits. The companies should make effective

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efforts in adoption of these technologies so that they can enhance the efficiency of their supply
chain and logistics operations.
Conclusion
In the limelight of above discussion, it can be concluded that disruptive technologies play a
significant role in improvement and transformation of supply chain and logistics management.
For this report, two technologies i.e. IoT and Robotics in supply chain enable the businesses to
explore great opportunities which range from operational benefits and strategic advantage. It is
transforming the supply chain and logistics processes of the companies. The above report
includes the benefits, opportunities and challenges which the companies may have by using
robotics and IoT in its supply chain operations. It is hereby recommended that the company
should make strategic supply chain planning so that it can incorporate disruptive technologies in
its supply chain processes successfully.

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