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How Will the Internet of Things Effect the Spare Parts Supply Chain?

Last modified: November 2, 2015

When discussing supply chain services and the spare parts supply chain, the Internet of Things (IoT) tends to become a central part of the conversation. However, many do not fully understand the benefits and ways the IoT will effect the spare parts supply chain. Although most commonly applied to the automotive industry, the spare parts supply chain is growing to include many IT companies, digital applications, and increasingly-complex pieces of equipment. Take a look at how the IoT is changing the spare parts supply chain to become more responsive, competitive, and efficient in repairing products.

Early Detection of Issues

The IoT basically refers to how differing pieces of technology, which includes nearly all modern electronics, communicate between each other through an Internet connection. For example, modern computers can perform extensive diagnoses of servers and hardware to determine where problems may develop due to faulty relays, power surges, and other issues.

If this example were applied to a high-tech industry, such as data center maintenance, the IoT could detect when fans may malfunction or be slow to start, which may allude to a motor on the verge of total failure. The IoT would recognize this problem, generate an order for a replacement part, process the order by the supplier, and send a notification to the data center manager about the issue. As a result, costs from downtime, searching for the broken piece of equipment, and locating the appropriate replacement part are greatly reduced. As a result, the provider of the service—the data center in this scenario—can pass savings along to customers and use increased confidence in uptime to draw in more customers.

Maintaining Maintenance Schedules

Some equipment, such as large machinery used in manufacturing facilities, may contain dozens of individual parts, which are susceptible to normal wear and tear. As a result, these items may need to be replaced periodically. However, the machinery may be too large to reasonably disassemble, identify the problem, and make the repairs for a typical maintenance crew. Fortunately, the IoT can provide maintenance crews of the problem, generate an order for the replacement part, and explain how to correct the problem on-site. Therefore, the IoT eliminates additional costs in maintaining equipment, which can easily be applied to the automotive and high tech industries as well.

If you want an additional example of the IoT, think about OnStar in today’s vehicles. OnStar monitors the activity of vehicles, recognizes potential problems, which include lock outs, faulty brakes, and malfunctioning systems, and notifies vehicle owners about the problems.

Applying the IoT to  Service Providers

Since the IoT serves as the connection between equipment, the owner, and the spare parts provider, time is saved when requesting new parts. For example, the order generates automatically at the supplier. This results in subsequent order processes, such as billing, shipping, and notification of delivery. However, the applications of the IoT extend beyond the recognition of a problem.

The IoT relies on consistent communication and analysis of data. In the spare parts supply chain, analysis of historic data allows a provider to make an accurate forecast for inventory at local repair centers. As a result, customers can have their equipment repaired in a timely manner.

Radio frequency identification (RFID) chips and barcode scanners can be used in distribution centers to help with the fulfillment of replacement parts as well. For example, the IoT may recognize when a given supply has dropped below the standard for the center and generate an order for replacement parts. By identifying changes in inventory, the IoT can aggregate information about trends in a given product replacement. If a specific problem seems to be recurrent for many users, the IoT may be applied to search for manufacturing defects, which could result in saving lives, especially when thinking about recalls on vehicles.

However, the same technology can be applied to high-tech industries, such as nuclear medicine. If a piece of radioactive equipment fails in a hospital, it could mean misdiagnoses and lost lives. The IoT serves as a way to prevent these problems and minimize the impact from a malfunctioning spare part.

The IoT is drastically changing the shipping world, which inherently includes changes to the spare parts supply chain. The spare parts supply chain is growing increasingly important as more advanced pieces of technology expand across markets, and the application of the IoT allows distribution centers, local repair shops, and suppliers to maintain a stronger degree of control over when, how, why, and where replacement parts are used. Essentially, the IoT has become the customer service center for ensuring today’s equipment and machinery continues to operate as expected.

 

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