The world has experienced many technologies and innovations in the last one decade ranging from the World Wide Web, the internet to mobile technologies, and now the internet of things (IoT).
Though a popular innovation in the domestic environment such as smart home appliances, smart speakers and personal digital doctors, IoT is rapidly gaining popularity in various commercial industries including agriculture, healthcare, real estate and security, and the future seems even brighter for the logistics application development.
In a recent GT Nexus and Campegini combined research published on Business Insider, approximately 70 percent of retail logistics companies have already started application of the new technology to enhance decision making and increase performance to maximise returns. With the evolution of other technologies like GPS positioning, Machine Learning, Artificial Intelligence, Blockchains and other automation, more of IoT application development is expected to disrupt the logistics and supply chain.
What Is IoT And Why Does It Matter?
IoT (Internet of Things) is a large network of man-made and natural physical objects (human, computer devices, digital machines, animals, mechanical machines and plants among others) that are connected using sensors and application programming interfaces (APIs) to share data over the internet. IoT application development depends on other technologies like Big Data management, AI, cloud computing, RFID, predictive analytics. It can be said to be the bridge between operational and information technology, as it enables analysis of unstructured data from the real world for insights that guide decision making to improve efficiency and performance.
IoT benefits to Logistics and Supply Chain Management
Most people feel that IoT is a potential threat to their jobs; this is not the truth. Although the technology will reduce the manpower required to perform a certain task, it should be seen as a tool to ensure smooth flow of operations and to reduce underutilization of resources to maximise profits. The new concept will help the modern logistics company in:
- Optimization of asset utilisation.
- Minimize security issues like counterfeiting and cases of theft.
- Enable accurate monitoring of resources and workflow.
- Accurate real-time visibility and response to events.
- Analyse real-world data for insights that inform decision making.
- Eliminate manual data handling to increase accuracy and reduce time wastage.
- Identify new opportunities by studying buying behaviour and patterns.
- Boost customer experience.
The Place of IoT within the Logistics Eco-System
A recent report by Cisco shows that deployment of IoT solutions in supply chain and logistics has grown by three folds in the last few years, and more is expected in the few coming years. The report estimates nearly $2 trillion to have been generated from IoT deployments in the logistics industry. There are two major forces that are driving the companies to embrace the new technology:
- Technology Drive “ IoT is made possible by the availability of modern innovations such as smaller and highly efficient hardware, analytics capability for large volumes of data, enhanced communication networks and many more. This makes it simple and affordable to design and implement custom IoT solutions to boost productivity in the business.
- Consumer Demands “ Customer experience and satisfaction is a priority for any modern business. Today logistics consumers are looking for transparency, reliability and trust when making purchases. This calls for the industry players to provide tools and services that will build the customer confidence. IoT helps you to establish effective shipment tracking, integrity control and improve efficiency to address your customer needs.
Internet of things can be used in many ways depending on the nature of the business and your overall goals. Here are some of the main applications that can be used to take your business to a whole new level:
- Asset Tracking “ Being able to monitor products throughout the supply chain will increase security as well as boost the quality of the products. Using modern GPS vehicle tracking and RFID sensors can be used to collect data about the condition, location of the assets, temperature and other forms of data about the specific items. This will help the supply chain managers to implement better quality controls, ensure timely deliveries, minimise theft and have an overall view of the supply chain operation to help in decision making.
- Fleet Management “ Modern telematics solutions and GPS positioning sensors can be used to collect real-time data to monitor and analyse vehicle performance and the driver conduct, as well as to track vehicles and the load. From a mobile app, the transportation manager can tell where a specific location, speed and direction is to control drivers from unauthorised activities and bad conduct on and off the road. IoT also gives the manager a clear visibility of the load on transit to prevent tampering and to increase safety.
IoT data can be used to optimise route scheduling and rescheduling, fuel consumption management and reduce emission to increase the company’s green operations scores. Other applications are fault detection to schedule maintenance, increase road safety and to ensure legal compliance.
- Inventory Management and Forecasting “ IoT sensors can be used to track inventory and provide data that will help in analysing trends to predict future inventory needs. This will help you to avoid under-stocking and over-stocking situations.
The above are just a few examples of how IoT can be used to transform supply chain and logistics operations. There is much more than the new technology can do to solve many retailers, consumer and freight companies’ challenges. These opportunities comprise of vehicle to vehicle communication, self-driven vehicles, vehicle tracking in case of theft and worker safety to name just a few. The transformation has already hit the ground, but more is expected in the next 2 to 3 years.
