IoT’s role in optimizing food supply chains, preventing recalls
The Internet of Things (IoT) along with Big Data is everywhere. It’s the buzzword that is deemed to be the next big thing, and will affect the way we communicate, travel, work, equip our homes and take care of our health. While we are well aware of the cool new IoT technologies affecting our daily life such as wearable devices, smart watches, activity trackers and smart home appliances, there are less visible, less talked about IoT-related tech solutions for businesses that could prove to have significant impact.
IoT can not only benefit individual customers, but it also has the potential to transform industries, as it affects the way we do business. The real value of IoT for businesses lies in data that is generated and analyzed in real-time via cloud-based applications. Thanks to the smart data and insights provided by IoT sensing devices, key decision makers get access to useful business knowledge that enables them to transform how organizations operate.
However, IoT should not be degraded to only a buzzword; it is not a futuristic vision; IoT is a trend that affects all industries to varying degrees.
IoT can revolutionize food supply chains via providing visibility
Today’s food supply chains are becoming progressively more globalized, cover greater distances and involve more suppliers. As a result, exposure to various risk factors grows exponentially.
And, as consumers in developed economies are becoming more health conscious, factors like the content of food, its origin, freshness and safety, food safety and traceability have become major concerns. Taking into consideration that around a third of globally produced food is wasted (either spoiled in transit or thrown out by consumers in wealthier economies) and that food waste makes up at least 1.3 billion tons of food lost annually, we can see that food supply chains are ripe for innovative solutions.
Reveal – control – empower
Even though various technological developments enable food manufacturers to revolutionize their supply chain operations, many still stick with traditional ways of doing business. Many food manufacturers still do not take proper quality measures until it is too late.
Today, when food safety risks could be reduced via end-to-end supply chain visibility, product quality checks must go beyond simply obtaining a certificate of quality analysis at the point of loading. Today, when food spoilage and contamination are some of the biggest concerns in food supply chains, visibility should not end with suppliers of raw materials or intermediate goods. Food manufacturers must be able to monitor what’s happening to their shipment while in transit to see whether the goods were transported and stored under proper temperature conditions.
IoT-based supply chain visibility solutions provide smart insights to supply chains holding the key to ensuring product quality from farm to fork. Thanks to network-connected smart sensors, food manufacturers can monitor the environment of goods in transit, receiving objective information on indicators such as the temperature or humidity inside a shipping container or truck at any given moment. Senior decision makers can then analyze enterprise-wide historic and real-time data to identify strategic areas for improvement within the supply chain.
Additionally, IoT-based, real-time cargo monitoring solutions provide insights into the cold chain, the network that stores and transports perishable goods such as meat, fish, dairy and fresh produce. The data can help to avoid spoilage by offering actionable insights in forms of safety alerts whenever the condition of goods deviates from the identified parameters.
Benefits of preventive approach to safety matters vs a reactive method
Improved supply chain visibility in the form of smart insights provides via real-time cargo monitoring, thus enabling manufacturers to optimize their supply chain processes and carry out smaller, more targeted recalls. This leads to reduced food waste and prolonged shelf life of products as well as decreased amounts of write-offs due to expired products.
Moreover, food manufacturers can also benefit from reduced inventory costs and better working capital management. Additionally, real-time cargo monitoring can help food companies simplify the audit process and maintain compliance with federal regulations and industry standards.
Take for example, a number of today’s manufacturers rely on quality checks based on data provided by suppliers. When applying this method, the product undergoes quality checks before leaving the warehouse at the origin; however, there is no way to tell what happens to the product in-transit. This approach is not the most efficient for goods that are sensitive to various environmental factors.
Monitoring the goods during transportation enables food manufacturers to verify the quality of ingredients before they are incorporated into a product. Moreover, during the times of recalls, traceability of products accelerates the investigation process, enabling professionals to identify the reasons for spoilage or contamination. This level of traceability closes gaps in the supply chain and offers a holistic view of all processes.