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5 ways IoT can revolutionize logistics

illustration of earth with internet of things icons and the text 'iot internet of things'

The Internet of Things. You might not have heard of it, but it’s already changed your life in a number of ways. 

According to Statista, the number of IoT-connected devices is set to jump to 30.9 billion units by 2025 – up from just 13.8 billion units expected this year. As more and more become equipped with internet-capable technology, the creators of these vast networks are discovering more ways to make our lives more convenient – especially when it comes to moving goods from A to B.

By bringing IoT strategies into your supply chain, you’ll gain greater insight into the activities that make up your operation – including the ability to identify problems before they happen. 

Sound a bit like crystal-ball gazing? We’re here to explain the world of IoT, and how it’s fast-changing the once paper-driven world of logistics and supply chain management.

What is IoT?

The Internet of Things (IoT) refers to networks of objects or ‘things’ linked through their ability to share and exchange data via the internet or cloud-based software platforms. 

Even the smallest and seemingly insignificant item, such as the component of a cellphone, can have its entire journey from manufacturing to assembly mapped in extreme detail if equipped with an internet-capable device. 

In short, IoT allows businesses and logistics providers to turn just about any element in their operation into a source of rich data insights.

By linking together multiple ‘things’ within a network, it becomes possible to track sequences within a supply chain or fulfillment operation. Analysts can monitor entire workflows from beginning to end via sensors or RFID tags that transmit information from the network at large. 

Once captured, this data can be analyzed to find inefficiencies so that adjustments can be made to optimize the workflow as a whole. This is also known as an ‘Information Value Loop’:

Although the concept of IoT was considered as early as 1982, the limitations of large-scale data processing meant that large-scale IoT networks weren’t feasible until the late 2000s. With the rise of blockchain and Distributed Ledger Technology (DLT) the data gathered from IoT networks can now be held securely and be prevented from being altered, either deliberately or through human error. 

These developments have made IoT a much more viable solution for businesses that require accurate reporting across the supply chain – in particular within the world of logistics and transportation.

Why IoT in Logistics?

As an industry, logistics centers on one key activity; moving the right goods from A to B at exactly the right time to maintain lean and responsive supply chains.

It might sound straightforward in theory, but the visibility of SKUs, shipments, and even trucking fleets has been a long-running problem for companies and 3PLs alike. 

As units change hands throughout the journey from A to B, matching demand with supply can easily become a game of estimates, rather than informed by real-time updates. It’s against this backdrop that shipments are delayed or even routed to the wrong port – with managers not alerted to the fact until it’s too late to prevent it.

With an IoT network in place, a shipment can be tracked in real-time so that issues can be rectified faster, preventing costly delays or errors which can disrupt the rest of the supply chain. For non-dynamic infrastructures such as warehouses and pick zones, IoT can identify inefficiencies that might otherwise be missed by human operators.

As logistics becomes steadily more digitized, companies can respond far more effectively to adverse circumstances up and down the supply chain. In essence, IoT technologies remove the guesswork from your operation by turning every stage into a source of valuable intel. 

5 Ways that IoT can transform your logistics

1. Smarter warehousing

Your warehousing strategy is the key to achieving a more streamlined fulfillment process. Because if you don’t get strategies like storage and picking right from the very beginning, this can have significant knock-on effects on the timeliness of deliveries. 

IoT allows businesses to identify where storage space isn’t being utilized effectively by including sensors within different zones to map habitual storage patterns. Using sensors on either scanner or robotic units can also map out the most efficient travel routes around the warehouse, thus lowering unproductive walking time. IoT can also be used to register the entry/exit of goods, and even to measure climate control across a warehouse with much greater accuracy.

2. Inventory tracking

Whether you’re a multi-channel retailer or not, keeping track of your inventory is critical to avoid costly stock-outs or over-ordering certain SKUs. If you’re running a multi-node fulfillment network, you need real-time insight into your inventory levels to ensure that every location has the stock that they need to service orders in that area. Otherwise, you can lose valuable time and efficiency by making manual transfers between warehouses. 

IoT technology can be used not only to track inventory levels across locations, but to forecast order volumes during seasonal peaks from accumulated data. This allows SKUs to be organized according to likely demand, meaning more effective picking and faster turnarounds to shipping. As inventory changes in size and scope, IoT can also identify when SKUs may be in need of rationalization, either due to flat demand or high return rates.

3. Trucking fleets

Anyone involved in logistics knows that managing a trucking fleet involves navigating a huge number of barriers to efficiency. As well as adverse events such as traffic, accidents or bad weather, there’s also the considerable running costs that come with ground transportation. These can be difficult to predict owing to varying travel times, freight loads, and driving styles – all of which have a massive influence on fuel consumption.

Trucks are massive repositories of data for 3PLs – if they try to harness it. For example, it’s challenging to measure across an entire fleet when maintenance needs to be conducted. By using sensors that can measure everything from the wear on tires to oil levels, maintenance can be flagged automatically without anybody needing to make an assessment. 

Furthermore, tracking your fleet gives you much more accurate estimates over when trucks are going to arrive at facilities, which reduces unnecessary idling time while waiting for freight. Real-time tracking also allows businesses to assess costs and emissions during journeys, including locations where fuel is cheaper or more expensive. This can be fed into route optimization efforts to achieve lower-impact and more cost-effective travel.

4. Shipments

Containers in transit are one of the hardest parts of the supply chain to track. Yet they’re also responsible for some of the biggest delays to stock arriving on time. This is difficult to mitigate when it happens, but IoT does allow businesses to be better prepared by giving them up-to-date data on the status of shipments and estimated arrival times. 

Moreover, placing sensors on the containers themselves allows temperature and humidity levels to be monitored during transit, ensuring that products are kept in the best possible condition. By measuring other actions, such as the opening and closing of containers, IoT can also detect possible damage or theft, protecting valuable cargo.

5. Advanced customer care

In ecommerce, post-purchase interactions with customers tend to center on alleviating delivery anxiety and answering the oh-so-common question of ‘where is my order?” Using IoT technology to track your fleet and give customers a tracking code to check at their leisure enhances the post-purchase experience and frees up support staff to focus on more complex issues.

By investing in IoT to optimize your supply chain and logistics, businesses can incur massive cost and time savings, as well as higher levels of customer satisfaction due to more streamlined fulfillment and delivery. By gaining complete, end-to-end visibility over every stage of your supply chain, you can make informed decisions over how best to maximize growth opportunities and create value-added services for your customers. Because when it comes to logistics, transparency always equals seamlessness.

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