The supply chain has a bit of an image problem. The issue is not that the supply chain has a bad image, but that it doesn’t have much of an image at all. Think back to meeting with your high school or college counselor. Did he or she suggest that you consider a career in supply chain management? Probably not.
Students “might go into engineering, or operations, or research,” Abe Eshkenazi, the CEO of supply chain industry association APICS (formerly the American Production and Inventory Control Society), told me recently. “And then somewhere along [their career path] someone gets them to look at supply chain or logistics.”
For an industry that is facing, according to multiple studies, a serious talent shortage (for example, Supply and Demand Chain Executive magazine indicates that the demand-to-supply ratio of jobs to qualified individuals is six to one, and could hit nine to one in the coming years), this lack of visibility, and the happenstance by which many people land with a supply chain career, is a problem. But that was not the focus of our talk. Eshkenazi wanted to express his concern over how Internet of Things technologies—and, more broadly, big data—are being deployed across the supply chain and logistics industries.
Eshkenazi says he is concerned that supply chain and logistics firms are deploying advanced sensor networks and data-collection platforms without adequately cultivating the skill sets within their workforces required to manage them. Within supply chain and logistics organizations, he explains, teams that are being charged with managing the IoT within their organizations “tend to have a lack of critical thinking” when it comes to how and why they’re using the technologies. “They want to lean on algorithms without truly understanding the underlying issues, so too often they’re applying wrong choices.”
This is a problem not just because it can lead to inefficiencies, but because as big data grows, so do security concerns. “Just because data is coming into organization doesn’t make it relevant [to that organization],” Eshkenazi says. “So the ability to not only sift through data and identify what is valuable, but to also know what can be done with it—and then, at the same time, deal with security issues that might be related to that data”—is not a small task, and requires relevant and ongoing training.
“So from APICS’ perspective,” Eshkenazi states, “training individuals and helping them know how to use technology is huge.” And, here again, the more connected supply chain partners become, and the more data they collect and share, the bigger security concerns grow. “Whether through intentional hacking or information bleeding out, there are significant security concerns.”
All this being said, Eshkenazi is bullish on the positive impacts that the IoT and big data could have on supply chain and logistics providers. For example, by improving traceability, IoT technologies—including RFID—can help supply chain partners by providing chain-of-custody authentication mechanisms to manage requirements around the avoidance of child labor and conflict minerals. (The term “conflict minerals” refers to certain materials, including cassiterite, columbite-tantalite, gold and wolframite, mined in central Africa and used to make electronics components. These minerals are being extracted and trafficked by armed groups that subject workers to human-rights abuses and use the proceeds from the sale of conflict minerals to finance violent operations.)
In addition, consumers whose purchasing habits are guided by products’ environmental or social impacts are increasingly demanding access to information related to how products are manufactured (and with what source materials), as well as how or whether these products can be repurposed, de-manufactured or recycled at the end of their useful lives. To address those sustainability concerns, some firms are working to create what they call a circular economy (for more on that, check out this Expert View article).
A circular economy—in which materials are managed and tracked from their source and through the end of a product’s life (and then back to become source materials again)—will require that supply chain partners become quite savvy with all sorts of advanced tracking technologies. In other words, supply chain companies will need to become significant users of IoT technology.
So now is the time for APICS and other industry groups to rise to the challenges regarding education and training that, Eshkenazi says, are so vital right now. A big part of APICS’ efforts in advancing training programs, he explains, is by starting with young students and getting the term “supply chain” into their lexicon.
“We’re starting to move into K-12 school systems, to talk about supply chain,” Eshkenazi says. “We’re starting to ask kindergarteners to think about a lemonade stand—as in, ‘How many lemons do you need? And what should you charge for them?'”
I think that’s also a good way to teach young kids about the circular economy. So supply chain and logistics companies, as well as marketers, retailers and manufacturers, should take note: The age of the conscious consumer is dawning, and your future stakeholders will want to see how the lemonade is made. IoT technologies can help you show them.
Mary Catherine O’Connor is the editor of IoT Journal and a former staff reporter for RFID Journal. She also writes about technology, as it relates to business and the environment, for a range of consumer magazines and newspapers.