For large cold-chain organizations, implementing IoT can be a major challenge. The upfront investment required to be successful can be difficult to secure, and the organizational change management requires leaders to re-imagine many business processes.

Over the last seven years, I was at the forefront of this challenge. I’ve been focused on bringing IoT to life for one of the largest healthcare organizations in the world. This came with many roadblocks, technical challenges, and learning along the way.

So, if you're ready to supercharge your supply chain IoT journey, buckle up. I'm about to share some hard-earned wisdom that could save you a ton of time, money, and headaches.

Step One: Assess the Current State

• Excursions and Losses:  
  • How many temperature excursions occurred in across your organizations end-to-end supply chain last year? 
  • What was the cost of goods sold (COGS) associated with products destroyed or sent to the SLOB process? 
• Time to Insights: 
  • How long does getting meaningful information from your current system take?
  • How many people are involved in that process?
  • How much time and resources were allocated to these temperature excursions?
  • How much time is dedicated to the SLOB/Disposition process?

• Carrier Milestone & Infrastructure Costs: Monitoring shipments in transit is expensive. How does it affect your budget?
  • How do you know that the carriers are executing on your lanes as expected?
  • Are you relying on lagging carrier milestones they send to you? If yes, at what cost?
  • How do you compare two carriers on the same lane?
  • Do you have a process to analyze lane lead time and update planning parameters? If yes, how long does this take to collect and organize the data?
  • How many resources are involved in these activities?
• Passive Logger Costs: Those little temperature recorders add up. How much are you spending on them each year?

Reduce Temp Excursions, Boost OTIF

Temperature excursions are the enemy of on-time, in-full (OTIF) deliveries. Every time a shipment goes out of range, it's a potential delay, damage, or even a complete loss. IoT can help you catch those excursions early, allowing you to intervene and prevent problems before they snowball.

The Value of Early Intervention

Imagine getting an alert the moment a shipment starts to heat up. You could take action immediately, potentially saving thousands of dollars. Calculate the financial impact of preventing just one major excursion – it might surprise you.

Lead Time: Every Day Counts

IoT can also help you reduce lead times by days. Real-time visibility means you know exactly where your shipments are and when they'll arrive. This lets you optimize your inventory, reduce carrying costs, and improve customer satisfaction. Figure out what a single day of lead time reduction is worth to your business. It's likely more than you think.

Baby Steps First: Passive Insights, Then Targeted Pilots

Don't try to boil the ocean all at once. Start small, get some quick wins, and build momentum from there.

Phase 1: Passive Insights

Begin by transforming passive logger data into analytics. This will give you a baseline of data to understand your current risks and challenges. Think of it as gathering intel before you launch a full-scale attack.  

Phase 2: Live Shipment Risk

Once you have some passive data, it's time to experiment with real-time visibility. But don't just slap sensors on every shipment. Focus your pilots on where you'll get the biggest bang for your buck.

• High-Risk Lanes: Identify the lanes with the highest temperature excursions or delay rates. These are your prime candidates for real-time monitoring.
• Most Valuable Products: Prioritize shipments containing your most expensive or sensitive products. Protecting these high-value assets is critical.
• Safety Stock Impact: Focus on products that could impact your safety stock levels if damaged or delayed. Keeping your inventory in balance is key.

By strategically targeting your pilots, you'll be able to quickly and convincingly demonstrate the value of real-time visibility. This will make it easier to secure buy-in for a broader rollout. Remember, it's all about building credibility and momentum. 

Check out this PAXAFE blog on the 4 Stages of IoT Maturity.

Auto Shipment Creation: Fueling Your Analytics Engine

Think of shipment creation as the starting line of a relay race. The more information you have at the outset, the more your team is better equipped to win.

Data In, Data Out

The key to unlocking the full potential of IoT lies in maximizing the data you capture at the very beginning of the shipment journey. This data fuels your analytics engine, empowering you to make informed decisions and proactively address potential issues.

Here are some critical data points to include at shipment creation:

• Carrier: Who's handling your shipment? Their track record and capabilities can significantly impact your risk profile.
• Product: What are you shipping? Understanding product characteristics, such as temperature sensitivity and stability data, is essential for effective monitoring.
• Digitized Product Stability Data: Have you digitized your product stability profiles? This allows for automated risk assessments and proactive decision-making.
• Packaging: What type of packaging are you using? Its thermal performance and protective qualities are vital to maintaining product integrity.
• Thermal Life: How long can your packaging maintain the desired temperature range? This information is crucial for predicting potential excursions and taking corrective action.
• Lead Times: What are the expected transit times? Accurate lead times enable you to optimize inventory levels and avoid stockouts or overstocks.

By capturing and integrating this data at shipment creation, you'll understand each shipment's risk profile comprehensively. This allows you to tailor your monitoring strategies, proactively address potential issues, and ensure your products arrive on time and in perfect condition.

Remember, the more data you have at the starting line, the stronger your finish will be.

API-First Approach: Building a Flexible, Future-Proof System

Don't get locked into a rigid, proprietary system. Embrace an API-first approach to maintain control, flexibility, and the ability to innovate. Setup an API between your ERP, TMS, and Control Tower.  This will ensure top data quality and reduce the time it takes for operators to create shipments at scale.

Pick Sensor Providers with Webhooks

When choosing sensor providers, prioritize those that offer webhooks. Webhooks enable real-time data streaming and seamless integration with your other systems. This eliminates the need for manual data downloads and empowers you to automate processes and respond to events as they happen.

Without a webhook, your IT department will have to build a customized polling mechanism to constantly query sensor data from your device provider.  This will require additional investment and may lead to data quality issues down the road.

Take Ownership of Your Data

While it's tempting to rely solely on external providers, it's crucial to take ownership of your data. This allows you to switch providers, integrate new technologies, and build custom applications tailored to your needs.

Focus on Predictive Analytics

Real-time visibility is great, but predictive analytics is the real magic. By leveraging machine learning and AI, you can anticipate potential issues before they occur, enabling proactive intervention and minimizing disruptions.

Get Your ETA Right

Accurate ETAs are the foundation of trust and efficiency. Your system consistently provides reliable arrival times, enabling your team to make informed decisions and optimize their operations.

“I’m holding a package in my hand and the ETA still says it’s 2 hours out. Now I don’t trust any of the data.”

This quote highlights the importance of accurate ETA's. When your system fails to deliver on its promises, it erodes trust and undermines the value of your entire IoT investment.

By adopting an API-first approach, focusing on predictive analytics, and ensuring accurate ETAs, you'll build a flexible, future-proof system that empowers your team to make data-driven decisions and deliver exceptional results.

Change Business Process: Adapt or Perish

Implementing IoT isn't just about technology – it's about transforming how you do business.

Re-imagine Automated Processes

Embrace the possibilities of automation. Envision a world where temperature assessments and product releases happen seamlessly, driven by real-time data and intelligent algorithms. This will free up your team to focus on higher-value tasks and reduce the risk of human error.

Establish a Risk Review Board

Form a risk review board by bringing together key stakeholders from across your organization. This cross-functional team will be responsible for evaluating insights from your IoT system, making informed decisions, and swiftly mitigating risks.

Secure Leadership Alignment

It is crucial to gain buy-in from leadership at both origin and destination sites. When leaders understand the value of IoT and champion its adoption, it creates a ripple effect throughout the organization.

"My job is to get as much product out the door as possible. Adding 10 minutes of process to apply a sensor on every shipment does not help me achieve my goals." 

This quote from an outbound operator highlights the importance of aligning goals with new processes. When employees understand how IoT benefits the organization and their own roles, they're more likely to embrace change.

Embrace Change, Empower Your Team

Business processes will inevitably evolve as you integrate IoT into your operations. Be prepared to adapt, train your team, and provide support to ensure a smooth transition. Remember, change can be challenging but also an opportunity for growth and improvement.

You'll create a culture of innovation and continuous improvement by reimagining your processes, establishing a Risk Review Board, securing leadership alignment, and empowering your team. This will enable you to harness the full power of IoT and achieve lasting success in the ever-evolving world of supply chain management.