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In 2005, e-commerce juggernaut Amazon launched Amazon Prime. This service made it possible for customers to receive their orders in a span of one or two days.
This speedy service placed pressure on the factory, retail, and logistics industries to provide an instant order and delivery process. Out of this newfound convenience, the term “Amazon Effect” was born.
Indonesia is not exempt to this Amazon Effect. Today, multiple e-commerce platforms provide an Instant Delivery service, allowing customers to receive their orders on the same day in a span of 3 to 8 hours.
According to supply chain management expert C. John Langley, the Amazon Effect results in increased consumer expectations. Customers continue to demand a quick service where their order arrives in prime condition in the shortest amount of time.
Considering this, it is then important for the logistics and services industry to have an efficient supply chain management system, which maximizes every step of the process.
Supply chain management is the handling of the entire flow of production of goods or services. This activity tracks the production process as a whole, starting from raw materials to finished goods, up until the products arrive at the hands of the customers.
The purpose of supply chain management is to maximize product quality, delivery process, and customer satisfaction. For a business, an efficient supply chain will help maximize profit and minimize cost.
Many businesses still fail to understand the importance of an efficient supply chain. In reality, supply chain management is the map for a business to be able to fulfill consumer needs in a cost-effective manner. Without supply chain management, there would be no clear operational structure, leaving the business without its function.
A proper supply chain management contributes to business growth. Productivity and efficiency of supply chain management will satisfy customers and give them reason to keep doing business with you. Therefore, supply chain management is beneficial for your company’s longevity.
In addition to this, effective supply chain management will help the company reduce costs and speed up production. This increases the company’s performance and profit margin.
There are five stages in supply chain management: planning, sourcing, processing of raw materials, delivery, and returns.
This step asks the question, what does your consumer want? What energy and resources would you need to satisfy these wants?
In this stage, raw materials are ordered from suppliers and taken note of for inventory. Here, accurate data processing is needed to aid with the rest of the supply chain.
Raw materials are then processed, whether with machinery, manually, or a combination of both.
Several other steps are involved in this phase of the process: assembly, trial and error, inspection, and packaging. However, this is not the final stage of the supply chain.
This is where the customer begins to evaluate your company’s service. Therefore, effective logistics is needed to deliver goods on time, without fault, and without costing too much.
If there is an issue with the goods upon receipt, whether it’s broken or faulty, customers can return or exchange the product.
According to Optoro, there is a 71% chance that customers will return to your business if they are satisfied with the returns process.
The expectation for instant services is just one issue that the supply chain faces today.
The supply chain involves a dense amount of data which need to be processed accurately. Without proper data management, supply chain managers will have difficulty predicting and responding to future issues.
Supply chain management also requires appropriate cash flow management. With the amount of operations running at the same time, inaccurate cash flow tracking will end up costing the company. On the contrary, accurate records of expenses will allow the company to identify which areas can save money and which need more expenses.
Skubana predicts that it will be more difficult for retailers and suppliers to predict ever-changing customer demands. This is one of the long-term effects of the pandemic. As a result, the company does not have reliable information on stock and manufacturing needs.
On top of this, economic pressures also cause rarity and increased prices of resources and raw materials. The cost of logistics is also on the rise as there is less cargo capacity on land, air, or water.
Political factors also affect the supply chain. A change in leadership leads to adjustments in local and global regulations. These aspects cannot be controlled. Therefore, companies must be ready to adapt to face any sort of change.
In order to address the above challenges, companies around the world have begun to adapt the newest digital technologies. IoT is one of the technologies which have been used in the supply chain management of a number of large companies.
It is estimated that there will be 25.4 billion IoT devices in the year 2030. IoT connects every digital device to the Internet and to each other. With this technology, supply chain managers and operational staff can keep track of factors such as inventory levels, machines that need fixing, delivery status, and even the temperature in storage units.
Implementing IoT will shorten your supply chain process and minimize the occurrence of human error. As a result, your workforce has more time on their hands, and they can also be allocated to other aspects in the process which need more attention.
According to a report from Deloitte, 79% of companies with efficient supply chains are able to increase their profits more than the industry average. In order to better the supply chain’s productivity, one will need integration, coordination, and transparency across each phase of operations. This is where IoT begins to play a part.
A study by World Industrial Automation Survey at Morgan Stanley shows that IoT is a solution to increase efficiency in operations. Therefore, applying IoT solutions to your supply chain management will bring about these benefits.
Data gathered by IoT sensors is accessible to all the parties involved. With accurate data analysis, every stakeholder can make data-informed decisions. Supply chain managers can also utilize this data to adapt their strategies for the future.
Additionally, IoT usage can also minimize human error, especially in the data collection and analysis process. Digitalizing will help you gain more accurate data and insight.
Data gathered throughout the production cycle provides transparency in the supply chain process. Every party involved can access information regarding each step of the supply chain. The production and delivery process can be tracked in real time by managers, couriers, and even customers.
The accuracy of AI can help minimize security risks, such as data leaks, inefficient work, and machine errors. If these issues are not promptly handled, they may slow down production and delay deliveries. With IoT, information available in real time helps concerned parties to make informed decisions in minimal time.
With less risks and errors, you are able to save on cost and time. IoT technology gathers data from every activity recorded, and predicts future potential problems. Supply chain managers can then strategize accordingly and shorten the next production cycle.
According to Verdantix Green Quadrant for Asset Performance Management Solutions, an increasing amount of companies have switched over to Asset Performance Management (APM) since the 1990’s. In 2019, total global spending on APM softwares reached $2.3 billion.
In the industry, APM allows every individual involved in supply chain management to track business assets, whether they are located indoors, outdoors, or in transit. This technology provides reports, reminders, and accurate data using IoT.
In Indonesia, the logistics industry is not the only segment benefiting from IoT usage. PT Pembangunan Jaya Ancol is one of the companies working together with Telkomsel IoT for its digital transformation.
This year, Ancol began implementing Telkomsel IoT on their properties in hopes of saving costs by up to 30%. Using asset monitoring on their tourism premises, Ancol is able to monitor the conditions of their assets, in order to provide visitors with the best experience.
Wing Antariksa, Ancol’s Director of Transformation and Business Development, is targeting a 57% increase in total visitors to Ancol, or the equivalent of 5.5 million people. The use of Telkomsel IoT will assist Ancol in building their digital ecosystem and reaching this target.
You too can experience the same benefits for your business with Telkomsel IoT’s Asset Performance Management solution.
IoT APM helps you monitor factory conditions such as battery levels, temperature, and humidity in the room as well as in storage units. This is done using IoT sensors which are applied on each asset. All of this information can be accessed on the Control Room Monitoring dashboard.
With full visibility over the factory’s operations, it is more convenient to monitor asset usage, prevent theft or missing items, obtain accurate inventory, and locate specific assets.
Searching within the warehouse is also automated, so that you won’t need to do manual searching.
From the above features, Telkomsel IoT Asset Performance Management is able to process data and provide analytics in the form of easily understandable visuals. You can analyze trends, adjust, and export the report according to your needs.
The Control Room Monitoring dashboard will also receive notifications and reminders of any changes in factory conditions, so you can cater to these changes quickly.
Telkomsel does not only provide solutions for asset management. Our services encompass every part of the supply chain, including the processing of materials in factories and warehouses.
Building a digital ecosystem at your company is possible with Manufacturing Execution System (MES). This system is able to analyze data collected via IoT sensors, so that decisions can be made based on accurate information.
With MES, you can increase your factory performance, thereby increasing profits. Lessen the cost of logistics by 21% and machine maintenance costs. Increase the efficiency of factory tools and boost production output by 20%. MES also decreases the risk of accidents during factory operations. So, making your own smart manufacturing will be much better.
Aside from monitoring business assets and ensuring the safety and efficiency of production, Telkomsel IoT Control Tower and TOMS will ensure your products arrive at their destination without compromising their quality.
Managing large-scale operations involves a lot of data which need to be handled correctly. According to a Statista report, data managed by IoT technology worldwide reached 13.6 zettabytes in 2021!
This much information cannot be handled manually. When processed correctly, this data can give you insight regarding the supply chain’s performance and increase your supply chain management efficiency.
With IoT technology, every step of the supply chain is automated, and automatically easier to carry out. Telkomsel IoT Control Tower gives you full visibility of supply chain operations on one integrated platform.
All you need to do is input an order into the platform. AI technology will help you check the delivery address, optimize delivery schedules, and assign the nearest driver for the most effective delivery.
It’s not just the logistics industry that can benefit from IoT Control Tower. Companies in the factory, mining, retail, medicine, and even food and beverages industry, will also reap from the features of Control Tower.
With Telkomsel IoT TOMS, deliveries are optimized through a dashboard and phone app. An automated delivery is the solution to the delivery operations, starting from dispatching of fleets, allocation of drivers, and scheduling.
TOMS can be adjusted to suit your business needs. Its features make it possible for you to track a good’s location and optimize the fleet’s route so that the order arrives on time. Scheduling of pick-ups and deliveries are also automated, and assigned to the nearest agent. Your supply chain manager can study the geo-analytics report available, gathered from data from each fleet’s journey.
With TOMS, you can continue to improve your service and gain customer trust. An automated system also helps you minimize cost and monitor staff performance.
Additionally, Fleetsense uses IoT technology on every fleet. Thanks to Fleetsense, you have full visibility over the activity of each of your vehicles. With this technology, it’s not just the customers that benefit; your company will too.
The Front Collision Warning and Pedestrian Detection features help drivers to drive safely, protecting them and the precious cargo they are bringing from any danger.
Driver Status Monitoring also helps you keep track of driver behavior throughout the journey. You can correct them in real time if they behave in a way that endangers them, such as driving while smoking or while texting.
Your business needs to be ready to adapt to the ever-changing market. Not only do you need to provide quality products, you also need to provide quality service.
Customer demands will always shift. However, at its core, customers want a speedy delivery process that doesn’t compromise the quality of the products. For the company, the challenge is to answer to all these needs as cost-efficiently as possible. Because of this, an efficient, structured, and automated supply chain management is needed.
The solution is an implementation of IoT technology. With Telkomsel IoT Asset Performance Management, the production process can be controlled centrally, and every step can be tracked in real time. After the final product is finished, IoT Control Tower will ensure the safety and efficiency of the delivery process. This process is also supported by TOMS and Fleetsense technologies. As a result, the goods will arrive at their destination on time, without compromise on their quality.
Each of these solutions are customizable to your business needs. Maximize your supply chain’s potential today, from raw materials to delivery! Contact our IoT experts immediately.
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