TECHNOLOGY AND DIGITALIZATION: IMPLEMENTATION OF TECHNOLOGIES SUCH AS THE INTERNET OF THINGS (IOT), BLOCKCHAIN, AND BIG DATA TO OPTIMIZE THE SUPPLY CHAIN

The supply chain is a vital component in any company that produces, distributes, and sells goods and services. It is a process composed of different stages, from the acquisition of raw materials to the final delivery to the customer. Efficiency and accuracy in these stages are necessary to ensure the success of the company, which is why technology is a crucial part of optimizing the supply chain.

Thanks to the implementation of technology, the way companies manage their supply chains has been revolutionized. These tools have allowed for the streamlining and automation of many processes involved in the supply chain, improving efficiency and profitability. Technology can be implemented at various points in the supply chain, with the following being key: planning, purchasing, production, connecting with other sectors, product delivery, among others.

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Internet of Things (IoT)

The Internet of Things is a network of physical devices, vehicles, appliances, and other physical objects that have integrated sensors, software, and network connectivity, allowing them to collect and share data. These objects can range from simple smart home devices, like a smart thermostat, to complex industrial machines and transportation systems.

By using such devices to automate and optimize processes, businesses can improve efficiency and productivity. One example of this is using sensors to analyze equipment performance and detect or solve any failures before they become more serious, reducing maintenance costs and saving potential time that would be lost.

IoT devices generate large amounts of data that allow companies to make more informed decisions and develop new business models. By analyzing this data, insights can be gained about customer behavior, market trends, and operational performance, enabling more informed decisions regarding strategy, product development, and resource allocation.

By reducing manual processes through the automation of repetitive tasks, IoT can help lower costs and improve profitability. For example, devices can be used to monitor energy usage and optimize consumption.

By using technology to collect data on customer behavior, companies can create more personalized and engaging experiences for their customers. For instance, IoT sensors can be used to track customer movements in stores and offer personalized deals based on their behavior.

An example of this technology implementation is UPS, which has incorporated it to reduce its environmental impact. Thanks to IoT, it can monitor the mileage of its vehicles, identify the optimal speed to minimize emissions, and assess the overall condition of the engine. The primary goal of this technology is to reduce fuel consumption and increase fleet efficiency, which will translate into lower costs, economic savings, and operational improvements for UPS in the long run.

Blockchain

Blockchain is a shared and immutable ledger that facilitates the process of recording transactions and tracking assets in a business network. Businesses rely on information. The faster it is received and the more accurate it is, the better. Blockchain is ideal for delivering that information, as it provides immediate, shared, and observable data stored in an immutable ledger that only authorized network members can access.

A blockchain network can track orders, payments, accounts, production, and more. Additionally, since members share a single version of the truth, all details of a transaction can be seen from start to finish, providing greater trust, new efficiencies, and opportunities.

Implementing blockchain in the supply chain can enable faster and more cost-effective product delivery, improve product traceability, enhance coordination among partners, and facilitate access to financing. When using the blockchain ledger, assets like inventory units, orders, loans, and bills of lading are assigned unique identifiers that act as digital tokens (similar to bitcoins). Moreover, participants in the blockchain receive unique identifiers, or digital signatures, which they use to sign the blocks added to the blockchain. Each step of the transaction is recorded in the blockchain as a transfer of the corresponding token from one participant to another.

Utilizing blockchain in the supply chain significantly reduces, or can eliminate, various execution, traceability, and coordination problems that may arise. Since each participant has an individual copy of the blockchain, each can review the status of any transaction, identify errors, and hold participants accountable for their actions. No participant can delete or replace past blocks, as this would require rewriting all subsequent blocks.

"Companies have different ways of working with this technology because within each blockchain, there are different ways to use it, as some are built on others." Mónica Talán, founder of CryptoConexion

An example of a company implementing blockchain in its operations is Maersk Line, the world's largest shipping company, which operates over 600 vessels. This company has partnered with technology firm IBM to establish the world's first blockchain-based platform to control the transport of goods. The various parties in the supply chain will be able to access and track information such as shipment arrival times and documents, customs clearances, and commercial invoices as goods are shipped.

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Big Data

Big data refers to extremely large and diverse collections of structured, unstructured, and semi-structured data that continue to grow exponentially over time. These datasets are so enormous and complex in volume, velocity, and variety that traditional data management systems cannot store, process, or analyze them. It is used in machine learning, predictive modeling, and other advanced analytics to solve business problems and make informed decisions.

"Big data are high-volume, high-velocity, or high-variety information assets that require cost-effective and innovative forms of information processing that enable enhanced insight, decision making, and process automation." Gartner, technology consultancy

According to the study "Big data analytics capabilities and knowledge management: impact on firm performance," big data analysis ensures that data can be analyzed and categorized into useful information for companies, transforming it into efficient decision-making processes and thus enhancing performance.

The implementation of this technology in the supply chain can provide several benefits during the production, storage, transportation, and distribution of goods. In the academic publication "Big data analytics in supply chain management," researchers from Western Illinois University (USA) state: "Big data analytics in supply chain management offers many advantages such as the ability to better predict supply and demand, analyze changes in customer preferences, or enhance supply chain visibility, although it also poses new challenges for organizations."

An example of successful implementation of this technology is Netflix, which had over 260 million subscribers worldwide at the beginning of 2024. The company uses big data by collecting and analyzing user interactions, tracking details such as viewing habits, pauses, and ratings, allowing it to make more informed decisions about content recommendations and original program creation.

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In conclusion, the implementation of advanced technologies such as the Internet of Things (IoT), blockchain, and big data is radically transforming the supply chain, optimizing it to improve efficiency, traceability, and decision-making capacity. These tools not only allow for process automation and cost reduction but also provide valuable real-time data for more accurate management.

Together, these technologies represent a unique opportunity for companies to optimize their operations, minimize risks, and remain competitive in an increasingly complex and dynamic global environment. Companies like UPS, Maersk, and Netflix are clear examples of how these innovative solutions are driving efficiency and generating new opportunities.

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