Applying IoT in Logistics: Solutions and Use Cases
With COVID-19 disrupting many industries including manufacturing and supply chains, logistics technology is the key to stability and business development. By increasing the transparency of transportation processes, speeding up delivery, and improving operations, IoT technologies have taken transportation to a higher level.
How the Internet of Things is improving the transportation industry
Logistics and transportation have always been risky industries due to the lack of control over weather, the high likelihood of fraud, and the large number of assets that need to be managed.
With the advent of the Internet of Things, logistics can finally be fully controlled and factors that negatively affect delivery can be neutralized or eliminated.
Benefits of using the Internet of Things in transport include:
- Reliable vehicle tracking. Internet of Things (IoT) devices help businesses track the location of each vehicle and find the most economical routes. Knowing the intricacies of the delivery process helps business owners assess employee performance and apply best practices. Also, it helps drivers proactively respond to and efficiently manage problems while on the road.
Reduced shipping costs. Automatic order processing and status updates help companies reduce the number of delivery staff, lowering overall operating costs. Using connected bots for last-mile delivery can significantly reduce costs as well as increase customer satisfaction.
Amazon has been benefiting from standalone drop shipping bots and lockers for over five years, increasing the convenience of delivery and making a profit.
- Improved supply chain planning. The Internet of Things provides businesses with diverse data: how long it takes to sell a certain amount of stock in a warehouse, ways to optimize supply, which employees have better track records, which distribution centers have higher conversion rates. As a result, business managers can accurately plan operations and predict the results of business decisions.
- Employee monitoring. Business managers can monitor the physical safety of personnel using wearable IoT devices and sensors. With the Internet of Things, you can protect employees from exposure to toxic elements and alert drivers if they aren’t following safety guidelines. There are even devices that can measure an employee’s speed and the number of cleaning breaks and measure employee performance based on data. To some managers, this kind of detailed tracking can be overwhelming. However, it does give you a better understanding of employees’ motivation and time management skills.
- Prevention of product theft and control of transportation conditions. There are many types of IoT and logistics anti-theft devices, including connected intrusion detection equipment, sensors for real-time asset tracking, alarm systems, and smart fences. Business managers can find IoT logistics solutions that provide increased inventory and supply chain transparency as well as protect against fraud, product theft, and tampering.
Questions to ask before choosing an IoT application for logistics
1. What level of accuracy does the system offer?
Do you need room-level accuracy or more precise positioning capabilities? This will determine which type of system you should choose. For some systems, more control points can be added to improve positioning accuracy.
2. How much infrastructure is required?
If you’re designing a new building, an infrared or Wi-Fi-based real-time location service (RTLS) system may work for you. But if you’re retrofitting a system in your current building, you should choose RTLS, which is easier to install.
3. What is the total cost of ownership?
The total cost of ownership is one of the most important factors for manufacturers looking to implement an IoT-based monitoring and tracking solution.
Battery life, tag cost, power consumption, and employee training are all important when calculating the cost.
4. How much does each tag cost?
The cost of tags varies greatly. Passive RFID tags can cost pennies, Bluetooth Low Energy (BLE) tags can be purchased for less than $15, and Wi-Fi tags usually cost around $40 to $60. The cost of a tag, of course, affects whether an IoT logistics solution is right for you.
5. How long is the battery life of each tag?
Battery life affects availability and service. For example, AirFinder tags do not broadcast continuously, so their lifespan is three times the lifespan of traditional BLE tags.
6. How secure is the system?
When deploying any type of IoT application on your network, data security should be a top priority. Some systems use multiple layers of device and data protection to keep your data and IT networks safe. BLE data is encrypted end to end using modern AES TLS data transfer methods. An “offline” data network that can be connected via a cellular network avoids exposing the IT network.
Connected IoT ecosystem for the logistics industry
IoT adoption is relatively widespread in resource-intensive industries such as manufacturing, transportation, and utilities. Whether stationary or mobile, these assets are now becoming parts of connected ecosystems in which they can interact and exchange vital information with each other.
Vehicles such as trucks and ships are movable assets that are becoming an important part of Internet of Things networks and leaving an indelible mark on the logistics and transportation industry.
Both the logistics and transportation industries, as well as warehousing, were the main drivers behind connected systems even before the term “Internet of Things” was coined.
This early adoption has allowed these industries to flourish and has given other industry segments the opportunity to renew their supply chain management and other end-to-end processes.
The Internet of Things has spurred the logistics industry with advanced telemetry capabilities and monitoring solutions. Its global connected market is also growing rapidly. The global market was worth $10.04 billion in 2016 and is now expected to have a total market capitalization of $41.30 billion by the end of 2021. That’s a compound annual growth rate of over 32%.
Obviously, the Internet of Things is a boon for the logistics sector. IoT networks have allowed logistics businesses to change the way they work and achieve better results. Before we talk about IoT applications in the logistics industry, let’s look at the four pillars a typical logistics company stands on.
4 pillars of a connected logistics company
Connected infrastructure was used in the logistics sector even before the term “Internet of Things” was coined. This connected ecosystem was developed out of the need for logistics providers to track delivery vehicles from remote locations and ensure that cargo arrives at the desired destination on time.
1. Communications systems
Mobile phones have enabled continuous communication between logistics managers and truck drivers, improving communication and allowing for the exchange of information that can affect cargo delivery.
2. Vehicle tracking
Vehicle tracking solutions typically track the locations of trucks delivering cargo. Using GPS tracking tools, logistics companies can follow their trucks and estimate delivery times.
3. Supply chain monitoring systems
The logistics industry is supported by supply chain monitoring systems. Logistics companies manage the complete supply chain process, from collecting raw materials to distributing finished products.
4. IT security
Cybersecurity threats in the transportation sector are on the rise according to IBM. This also affects companies in the logistics vertical, so IT security is important for them as they protect their valuable data from cyberattacks.
Applications of IoT in logistics
1. Track deliveries from vendor to manufacturing facility
If you’re working with multiple US suppliers to obtain a single component for your device — say, a sheet metal supplier network for an automobile manufacturer — you can use a real-time location system (RTLS) to track pallets of that component from each supplier from the time the pallets are packed. This way, you know ahead of time if a shipment is delayed, allowing you to keep your production running smoothly with plan B.
2. Track deliveries and materials around your manufacturing facility
Truck drivers have little or no incentive to ensure your goods arrive exactly where you instructed, often resulting in lost or incorrect delivery. If you use an RTLS, you’ll know exactly where pallets have been placed.
3. Track deliveries and materials inside your manufacturing facility
Materials moved in the factory for assembly or shipment are often prey to what we call the “flat surface problem.” The wrong materials can lead to shortened cycle times, employee frustration, and ultimately customer dissatisfaction. With an RTLS, you’ll always know the location of tagged materials such as special test fixtures.
Use case of IoT in location tracking
Pfizer is a pharmaceutical company that uses real-time tracking devices to obtain a database on the route.
You can control sensitive goods to avoid damage or loss. Some factories regularly receive batches of perishable or sensitive goods that only stay fresh for a short time and/or require certain environmental conditions to maintain quality.
With an IoT logistics app, you can tag a crate of eggs or a barrel of milk and monitor the humidity in the storage area, product temperature, and level of shock and vibration during transport.
You can use this information to notify warehouse managers of damaged shipments long before they arrive at your facility and have a new shipment en route.
Use case of IoT in environment sensing
The international trucking group IAG Cargo uses an IoT system capable of transmitting real-time data on a wide range of parameters, from light to temperature and humidity, providing IAG Cargo users with perfect end-to-end monitoring.
In addition to choosing the right IoT platform for your warehouse, you also need to explore IoT analytics capabilities.
IoT analytics means applying data analysis tools and techniques to analyze and make sense of large amounts of collected data. Remember that sensor devices collect data (statuses, events, etc.) in real time. This is the power of IoT in warehouses and distribution centers.
Data analytics is critical to the IoT ecosystem. It not only helps you analyze large amounts of data generated by your IoT ecosystem but structures unstructured data to help you make sense of it.
Remember that every component in the ecosystem will generate large amounts of data, so organization is essential to make it meaningful and useful. Without the proper organization of all information generated, warehouse managers and other decision-makers cannot understand it and act to improve warehouse efficiency.
IoT data analytics tools can help you improve efficiency and profitability by deeply understanding operational inefficiencies and enabling you to implement effective solutions that deliver measurable operational efficiency.
Use case of IoT in analytics
Predictive analytics systems increase warehouse productivity and reduce shipping costs. Amazon’s anticipatory shipping is an example of a smart way to use predictive analytics.
With an IoT-based system, supply chain companies can track the locations of their vehicles, as well as the personnel assigned to them, at any given time. This provides a transparent view of how resources are used and provides insight into further resource allocation improvements. The Internet of Things can also help companies automate car maintenance and repair.
Compliance and safety are important aspects of supply chain management, and automating this process can help companies avoid problems. Similarly, there are supply chain companies planning to use the same technology to track the health of their drivers.
With more accurate vehicle and traffic information along with better strategies you can improve fleet and fuel management.
Use case of IoT in fleet management
Fleetilla offers fleet management solutions for cars, light trucks, and heavy trucks. These solutions improve fleet efficiency and help businesses reduce time and fuel costs.
Meeting demand is one of the most important indicators of efficiency in the supply chain sector. Applications of IoT technologies in the industry are not limited to technical aspects; they can also provide insights that improve the ability to forecast demand.
Data collected with Internet of Things devices can help you better understand customer behavior, product use, needs, and demand.
IoT devices can provide more than just point of sale data. They can provide data to track actions that lead consumers to the checkout.
The Internet of Things makes it easier for manufacturers and suppliers to understand consumers from the moment of purchase, including why consumers make purchases and how they use the things they buy.
Use case of IoT in the supply–demand balance
Stop & Shop is a supermarket chain that uses the Insight system, developed by Blue Sky Logistics, to efficiently manage supply chain processes.
IoT inventory tracking
IoT Inventory Management is the most widely used IoT application for transportation and logistics. This application allows you to remotely track inventory assets, monitor their conditions, and thereby create a smart warehouse. In addition, fuel level sensors built into the vehicle help to avoid underloading and overloading during transport.
Use case of IoT in inventory tracking systems
With connected sensors, business owners can safely store products, save time by being able to instantly locate the products they need, and minimize human error. Amazon’s connected system is proof of how technology can improve asset tracking and warehouse management.
Quick summary of IoT in logistics
- The Internet of Things (IoT) helps businesses track the location of each vehicle and identify the most economical routes.
- Automatic order processing and status updates help companies reduce the number of delivery staff, which lowers overall operating costs. Using connected bots for last-mile delivery can significantly reduce costs as well as increase customer satisfaction.
- The Internet of Things provides businesses with diverse data, including on how long it takes to sell a certain amount of stock in a warehouse, ways to optimize supply, which employees have better track records, and which distribution centers have higher conversion rates.
- Logistics IoT devices enable business managers to monitor the physical safety of personnel using wearable devices and sensors. With the Internet of Things, you can protect employees from exposure to toxic elements and alert drivers if they aren’t following safety guidelines.
- There are many types of IoT and logistics anti-theft devices: connected intrusion detection equipment, sensors for real-time asset tracking, alarm systems, smart fences, and more. Business managers can find an IoT logistics solution that provides increased inventory and supply chain transparency as well as protects against fraud, product theft, and tampering.
- When deploying any type of IoT application on your network, data security is a top priority. Some systems use multiple layers of device and data protection to keep your data and IT networks safe.
If you want to implement IoT technology into your logistics business but don’t know where to start, contact Mobindustry for a free consultation.