IoT Disrupting the Logistics Industry

How IoT is changing the logistics industry

Iot and the digital revolution is no doubt affecting many areas of the economy, but it has a profound effect on logistics. By combining mobile computing, analytics and cloud services IoT is disrupting how delivery and fulfillment companies operate. However, IoT is not new for the logistics industry. FedEx introduced parcel tracking decades ago and its competitors scrambled to catch up. Similarly, Walmart implemented pallet level RFID tags a decade ago.

One of the most popular ways of handling deliveries today, is through third-party logistics, which involves outsourcing services of moving products and resources from point A to point B. Third party logistics can be one service or an entire system that maintains the supply chain. IoT changes the conventional way of managing this process: it affects the supply chain, inventory, logistics, manufacturing and more.

Asset tracking gives companies a way to completely overhaul their supply chain management and logistic operations by providing them with tools to make optimized decisions and save time and money. IoT technologies applied to asset tracking is estimated to have an impact of over 1.9 trillion dollars within the sector. This transformation is already afoot. A survey by GT Nexus and Capmgemini found that already 70% of retail and manufacturing companies have started a digital transformation project on their supply chain and logistics operations.

New developments are making the old barcode scanners obsolete, as they offer a lot more vital and usable data especially when paired with other IoT technologies. It’s a given that a parcel can be tracked every step of it’s way, but in most cases it’s still a matter of barcodes being scanned and this involves humans. When IoT is implemented the truck or a can can act as the ”reader”, eliminating the need for humans to do anything more than load the vehicle. The delivery vehicle connects to a cloud database and transmits the RFID-derived information. RFID tags provide data on items to which they’re attached, passive tags have microchips for storing information, while active tags have their own battery power and can include additional sensors. Trackers connected to the internet use long range networks to let companies track specific items throughout their delivery journeys, satellite trackers provide location data about an item no matter where you are in the world or whether you have cellular coverage or not. Bluetooth tags and beacons offer tracking data in smaller areas and are often used in retail stores to monitor customer traffic and offer marketing messages to customers. NFC-tags allow workers to use their mobile devices as readers for the tags which is an advantage over RFID tags and readers.

.Warehouses, distribution centers and yards are a fundamental part of supply chains and supply chain companies. Efficiencies gained in these facilities can be traced to improvements in the bottom line. Tagged parcels, pallets and containers that are able to communicate with the infrastructure, warehouses are able to track inventory, vehicles and equipment through cloud services. By translating location data into digital data organizations are able to automate asset and location tracking and taking humans out of these physical spaces. This will realize in savings from work place hazards and health risk reductions. Getting this 360-degree view of the facility, organizations are able to reduce congestion, unnecessary trailer moves, fuel usage and time.

Improving fleet management

By combining GPS and RFID-derived location data with data from other sensors and nodes in the IoT network, such as other cars and trucks, the supply chain will become proactive, not reactive.

For example, trucks and vans are informed about delays before the vehicle gets caught in a traffic jam, no matter what the accident is caused by. In addition, organizations are able to monitor vehicle and driver performance and get data about any kind of malfunctions that might occur to the vehicle: gearbox or engine running hot can often indicate an impending failure, and by scheduling maintenance proactively, breakdowns can be reduced. Companies can also monitor which drivers have the most economical driving habits in terms of fuel usage and vehicle wearing and use this information and educate other drivers. By being open to all the possibilities of the IoT, organizations have a chance to identify inefficiencies in real-time, enabling them to constantly improve the effectiveness of their operations.

Asset tracking technologies create massive potential value, due to the broad array of benefits that companies can obtain from them. These solutions can create essential savings at almost every step of the process and help with compliance reporting and result in newer revenue opportunities. All these benefits are derived from the insights that companies can gain from the data that asset tracking solutions provide. Tracking tags and sensors can deliver important data about the location and the condition of the cargo in real time. Gaining operational data can be problematic if companies don’t implement organizational changes and other technologies that enable them to be more agile.

A study by BI intelligence research service, suggests that by 2020 connected fleet management solutions will reach 90% of the total market of commercial vehicles in North America, which represents a tenfold increase from 2010.These solutions are deployed in three ways: physical movement and delivery of items, consumer transportation and field-service vehicles.

Key takeaways:

  • The productivity gains that asset tracking solutions enable, could lead to enormous savings for companies: Cisco and DHL estimated that IoT technologies could create $1.9 trillion in economic value for the global supply chain and logistics sector.
  • Legacy asset tracking technologies like barcode scanners are gradually being replaced with newer internet-connected tracking solutions that provide real-time tracking data and information on the condition of the goods and items in transit.
  • Analyzing real-time tracking data for operational insights can deliver a wide range of benefits including decreased fuel and storage costs.
  • Deriving the full value of asset tracking solutions will require enterprises to implement a digital strategy that also includes analytics and data processing tools to help them get valid insights from the tracked data.



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