Hottest Summer on Record Drives Supply Chain Disruptions, IoT and AI Offer Solutions
The summer of [year] has been declared the hottest on record, and the effects of climate change are becoming increasingly apparent. Extreme heat waves, wildfires, and hurricanes have wreaked havoc on a global scale and have now begun to disrupt supply chains. These disruptions pose a significant risk to businesses and organizations, with more than two-thirds of U.S. businesses experiencing potential operational downtime due to power grid blackouts.
One industry that has been particularly affected is the HVAC industry. The scorching temperatures have led to a surge in service requests from commercial clients in need of repairs. This high demand has put pressure on HVAC companies to maintain an adequate supply of inventory parts and replacement air conditioning units. In Germany, Aldi stores have had to stock locally grown asparagus and strawberries due to droughts in Spain limiting supplies.
These challenges highlight the new normal for grocers, retailers, and healthcare organizations in the face of climate change. Severe weather events have a ripple effect throughout the entire supply chain, causing disruptions and increasing risks. Not only do these events spoil perishable food products and damage temperature-sensitive medications, but they also reduce staff efficiency. According to a report by the International Labor Organization (ILO), heatwaves are projected to reduce working hours worldwide by over 2% by 2030, resulting in the loss of 80 million full-time jobs and $2.4 billion globally.
To mitigate these risks, it is crucial to integrate IoT, artificial intelligence (AI), and machine learning (ML) technologies into the supply chain. Digitalization of the supply chain is no longer just a luxury; it is a necessity in our current business environment. IoT-powered sensors and monitoring solutions, combined with AI and ML analytics, can provide greater visibility and traceability at every touchpoint of the supply chain.
For grocers and food retailers, it is important to have automated remote temperature monitoring in the event of prolonged power outages. After power is restored, store operators need to confirm whether products inside refrigerators and freezers have remained within optimal temperature thresholds. By utilizing IoT condition monitoring solutions, real-time environmental data can provide verifiable proof of temperature maintenance and generate prescriptive directives for operators.
Furthermore, temperature-sensitive medications and vaccines require strict storage conditions to maintain their efficacy and safety. Shipping products in extreme heat can often lead to temperature excursions that exceed maximum limits. By combining real-time location sensing with automated temperature monitoring, organizations can track and trace products through the supply chain. This enables them to prevent potentially impacted medications from reaching consumers and take proactive steps in recalling or communicating with customers.
The integration of IoT, AI, and ML tools into the supply chain is essential for building resilience against climate-related operational risks. In the face of extreme weather events, these technologies provide real-time data, enhance decision-making capabilities, and optimize processes. It is crucial for supply chain leaders to adopt these digitalization strategies to ensure the safety and efficiency of operations in the years to come.
As the effects of climate change continue to intensify, businesses must not only embrace sustainable practices to reduce carbon emissions but also implement preventative measures to safeguard their supply chains. The combination of IoT, AI, and ML technologies offers a promising solution to optimize supply chain resilience, mitigate risk, and deliver high-quality customer experiences. By leveraging these tools, businesses can navigate the challenges posed by climate change and ensure the continuity of operations in the face of uncertainty.
