How the IoT-Powered Supply Chain Provides a New Level of Visibility

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With IoT, restaurants and hotels are gaining immediate insight into the real-time location and condition of their goods, making it possible to bring a data-driven approach to the optimization of the food chain.

How the IoT-Powered Supply Chain Provides a New Level of Visibility

By Dagny Dukach - 10/31/2018

To keep customers happy and coming back for seconds, restaurants must meet fluctuating demand reliably, maintain consistency across locations, and ensure uncompromising quality for every customer. That’s a tall order best met by maintaining both inventory and supply chains.

The key is visibility. Visibility into where ingredients are, where they are coming from, and what condition they are in ensures you have the information you need to deliver a top-notch customer experience. That’s why many in the industry are turning to the Internet of Things (IoT) to gain real-time visibility into the precise location and condition of their in-transit food and beverage shipments.

With IoT-powered sensors attached to every shipment, it becomes possible to monitor the temperature and humidity of shipments non-stop as they travel across a complex supply chain. In addition, real-time location data enables the manager to trace the complete path of a shipment from farm to packaging facility to distribution center and on. If a shipment is running late (or early), IoT trackers can identify the issue in advance, giving the manager the time they need to make alternate arrangements. And on a macro scale, comprehensive data regarding when and where shipments tend to be damaged or delayed in transit makes it possible to identify and eliminate root cause issues, enabling data-driven optimization across the supply chain.

This all sounds great in theory, but how are these IoT solutions impacting the restaurant industry today? One of the most significant challenges in the industry is ensuring that supplies are available to meet fluctuating demand levels. For example, an LTO (Limited Time Offer) may spark high demand levels for certain menu items. In 2017, McDonald’s learned this the hard way with their “special sauce” fiasco: thousands of upset customers took to Facebook and Twitter and in some cases, the streets, complaining that the global franchise was unable to deliver as promised when demand for the sauce skyrocketed. Without visibility into where key shipments and safety stock are, it is challenging to address issues like these. But with real-time tracking, the manager can easily determine where goods are and have additional shipments re-routed when above-average demand is expected.

Another major challenge for large franchise operations or multiple-site brands is maintaining consistency across global locations. For these brands, it can be difficult to ensure that all restaurants have access to the same ingredients and offerings coming from sources with the same levels of quality and consistency. With real-time tracking, it becomes possible to determine with certainty exactly where shipments are coming from and where they are going, so that all stakeholders are aware and can be held accountable. 

Of course, ensuring quality and consistency is about more than just shipments arriving at the right locations at the right times. For many food and beverage shipments, precise environmental conditions must be maintained to avoid spoilage. For example, by the time a temperature excursion was discovered in a recent chicken wings shipment meant to supply half a dozen Chinese restaurants, the wings were already completely destroyed, leaving the restaurants without vital ingredients.

With IoT sensors tracking not just location, but also temperature, humidity, and shock, it becomes possible to discover potentially harmful conditions as soon as they occur. If a sensor detects temperatures outside the permissible range, it can send an alert to the supply chain manager right away, giving them time to fix the problem (be it a broken air conditioner or a shipment left out in the sun), often before the damage is done. Even if it’s too late to save the product from spoilage, the advanced warning makes it possible to order a replacement shipment and avoid restaurant closures and lost revenues. 

Finally, as customers grow ever more conscious of the health and environmental implications of the food they eat, restaurants have begun to offer new levels of farm-to-fork traceability. With non-stop tracking around the world across all different modes of transport, restaurants can confidently provide detailed information regarding the exact source of everything they serve.

The modern restaurant supply chain is more complex than ever. When it comes to perishable food and beverage shipments, temperature or humidity excursions due to incorrectly set refrigerated containers, adverse environmental conditions, or unexpected delays can result in damaged product and disappointed customers. But with new IoT tools, companies are gaining immediate insight into the real-time location and condition of their goods, making it possible to bring a data-driven approach to the optimization of the food chain. To stay competitive in an ever-expanding market with ever-pickier customers, that real-time visibility is a necessity.

 

 

 

Dagny Dukach

About the Author:
Dagny Dukach is the Marketing Manager at Tive Inc., a provider of IoT-powered supply chain visibility solutions.