A Move from Forecasting to Better Accuracy with IoT Consumption Planning Tools
Engaging and interacting with consumers is rarely something done within the typical supply chain. That’s about to change drastically. IoT is providing an opportunity for manufacturers, distributors, and suppliers to come together to make critical decisions about how to meet consumer needs. More importantly, these groups can now connect directly with their customer.
Companies will have a coherent reason and a comprehensive way of making IoT a substantial component of the supply chain.
Imagine this scenario. A consumer purchases a high-end fashionable shoe, which contains outstanding, built-in sensors that can relay information back to the company about the product. Is it being used correctly? Where was it bought, where is it being used, and what is its condition? The sizable amount of data streaming into the company is highly useful to that organization. Suddenly, they can now achieve a variety of goals including:
- Determine how well the product is performing
- Estimate the length of wear and tear
- Know where to ship more product based on where it is selling right now
- Make decisions about which materials to use or to replace
- Send information back to consumers about updating their purchase when the old product is no longer working as well
That is just one example. Many other applications exist. By incorporating IoT into the supply chain, manufacturing becomes more streamlined and efficient. With the ability to learn directly from the consumer, manufacturers can design their products more efficiently. Companies can begin implementing this type of technology now.
Key Benefits of IoT within the Supply Chain’s Consumption Planning
Considering just consumption planning for a moment, think of the main advantages of incorporating IoT into the supply chain and through consumer industries. First, it provides data that tells companies when to produce, ship, and make available the product. That eliminates the need for complex forecasting models that use limited data to make decisions.
It also helps to improve efficiency. Instead of moving blocks of material from place to place in the hopes that consumers still need it, there’s less movement of non-necessary or desired goods. Now, suppliers and shippers can focus instead on what’s necessary and desired.
It creates automation. With this method, it could lead to automatic adjustments in production plans and even changes to proposed materials procurement by companies. Every step of the way, IoT can create a more efficient result.
The Marketing Science Institute quoted Intel Corporation’s Peter Levin: “With cheap sensors, democratized analytics, and new platform tools, we are moving from a ‘models’ to a ‘measures’ world.” This perspective shows how things are changing. Information will be readily available for manufacturers and suppliers to use to make critical decisions regarding the product. No longer are we focused on forecasting, but instead on real-time consumption.
If companies are to achieve this goal, it is critical that they put IoT technology into practice. That will mean incorporating powerful tools to transform the data streamed from consumers into usable bytes, but this is today’s reality.