How IoT can make a difference in the logistics industry

Al Fattah Md. Azim | Published: May 06, 2019 20:57:30 | Updated: May 09, 2019 20:33:24

Figure 1: Value of IoT devices over the next decade                        Source: Cisco Consulting

A California-based tech company named Zipline has been working on designing and developing drones to deliver emergency medicines in far-off destinations. The technology has already tasted success by saving lives as it delivered medicines to patients in critical conditions through 12,000 flights nearly 15,000 kilometres away in Rwanda. Poor transportation and communication infrastructure make it difficult to deliver medicines to the patients in some parts of the country. Zipline solved the road communication problem by using drones.

Bowery Farming is another company that is helping farming to become more efficient, productive, environment-friendly, organic and fresh. The company builds big indoor farms where high-quality fresh produce are grown throughout the year. Through Bowery's operating system, the company collects millions of data in real time about how well their crops are growing, their physical appearance, health, quality and more. Through their activities, the company has reduced 95 per cent water usage in farming and do not need to use pesticides although their farms are more productive than traditional farms.

Such companies are gradually transforming the ways people think and do their daily work. This change has been a continuous process as over the years the internet itself evolved from early ARPANET, IP till today's Internet of Everything (IoE) concept, where internet is not only connecting computers but also connecting people, data, things and processes. In such ways, platforms are becoming stronger with integrated technologies and information. IoE connections can be machine-to-machine (M2M), machine-to person (M2P), or person-to-person (P2P). Internet of Things (IoT) usually refers to machine-to-machine (M2M) connection, though its implications are beyond networked connectivity between objects. 

IoT is the convergence of information technology and operational technology. Its roots can be traced back to the early 2000s in the work of MIT's AutoID Lab. It is estimated that by 2030, around 500 billion devices will be connected to the internet. Each of these devices has sensors that can collect data and interact with other similar devices over a network. These smart, connected devices generate data that IoT applications use to aggregate, analyse, and deliver insight, which helps in taking better (informed) decisions and actions.

It has been estimated that around $8 trillion worth of value will be generated due to IoT within the next 10 years, according to DHL and Cisco (See Figure 1). The money will come from areas like: innovation and revenue ($2.10 trillion), asset utilisation ($2.10 trillion), supply chain and logistics ($1.90 trillion), employee productivity improvements ($1.20 trillion) and enhanced customer and citizen experience ($700 billion).

IOT IN SUPPLY CHAIN AND LOGISTICS: Advancement of information technology around the world and across different industries needs more digitalised supply chain systems. From consumer (electronics, fitness, home automation/security, leisure/entertainment) to industrial (transportation equipment - cars, trains, and planes, health care equipment and mega systems like smart buildings, smart cities, and smart utility grids) and manufacturing (factory buildings, manufacturing equipment, material handling equipment, robots, warehouses) aspects, IoT's presence is visible everywhere.

The number of mobile phones available in the world is more than the present global population. Nearly 66.72 per cent of the world's population have unique mobile subscribers. Internet reach is being increased by increasing mobile penetration in different parts of the world. Millennial decision-makers are now more comfortable with being up-to-date while on the run. Cloud-based applications, robotics, artificial intelligence, big data etc. are all showing enormous potential for optimised automated process. Tractica Research has estimated that the worldwide sales of warehousing and logistics robots will reach $22.4 billion by the end of 2021.

'Smart Nation Vision' project by Singapore could be reviewed by many developing countries including Bangladesh who are yet to consider IoT seriously. In July 2016, the Netherlands became the first country to have a national network for IoT traffic.

At the moment, in many developed countries, robots can be found in warehouses, locating, tracking, and moving inventory. They are conveying and sorting oversized packages at ground distribution hubs. Wearable bands, mobile personal assistance, smart house applications, weather and health-related apps are automatically collecting data from day-to-day lifestyle and providing insight to concerned professionals who are using this data for utilisation in future scenarios and decision-making processes. Manufacturers are also eager to get customer insights that can optimise the sale of their products or in future product and services design and sales. Therefore, growing number of manufacturers are transforming their processes and investing on IoT. 

By connecting the unconnected physical assets, companies can ensure real time visibility. Moreover, they have ample amount of data available to measure expected standards. Automation increases optimisation for operating process in the manufacturing and service industries. For logistics, it is supply chain optimisation and warehouse management where massive advancement would need to occur. Tasks like asset management, routing, safety health check, scheduled maintenance etc. are enabling companies to be more efficient with their service and standard.

SCOPE FOR SUPPLY CHAIN AND LOGISTICS: The major areas where IoT will ensure improvements are warehouse operations, monitoring & visibility, resource management and overall customer experience. Due to the nature of the industry, logistics would be one of the perfect areas where IoT will excel. Warehouse is considered as hub for inflow and outflow of goods and inventories, a crucial part of any supply chain hence attaining efficiency, flexibility and cost effective utilisation, would ensure competitive advantage for any service provider or manufacturer. Pallet, tagging and low cost Radio-frequency identification (RFID) would help businesses engage in smart-inventory management. Transmitting information from pallet and automatic scanning in gateways would reduce time and effort while cameras can identify damage detection during transit or handling. Driver Vehicle Inspection Report (DVIR), placed in certain locations, can identify shipments with tracking numbers and also ensure real time visibility and transparency. In the warehouse identifying location, scheduled position updating, maintaining queue for outbound delivery or transfer and then updating inventory amount can increase control of inventory.

Technology like "SmartLIFT" can contribute optimal asset utilisation as it can combine forklift sensors with barcodes placed on the ceiling of the warehouse and Warehouse Management System (WMS) data to create an indoor GPS system that provides the forklift driver with accurate location and direction information of pallets. After incorporating such technology, Bobcat has reported a 30 per cent increase in pallets per hour with no inventory errors. Additionally, automatic maintenance notifications are generated in advance to avoid sudden damage or pile-ups.

In the past, in USA alone, annually 100,000 accidents have occurred during forklift operation leading to nearly 95,000 injuries. Combining sensor and camera like Ravas "Smart Fork", efficiency can be attained by reducing accident rate.

In an ordinary warehouse, lighting accounts for 70 per cent energy use. Smart warehouse energy management can drastically reduce this consumption.   

In 2012, 1,634 cargo theft incidents were reported in USA and UK by Freight Watch. Solutions like 'SmartSensor' by DHL and SenseAware by FedEx not only ensures real time visibility but helps to ensure quality with advance security through visibility of humidity, temperature, damage, location, condition etc.

Another vital area is container and fleet management. Embedded sensors and wireless connectivity helps with cargo space efficiency, route planning, scheduled maintenance results reduced fuel consumption, deadhead miles and increased fleet efficiency.

 Due to the increased amount of global economic, political and geographical (natural disaster) uncertainty, traditional supply chain models are gradually losing effectiveness. Designing an end-to-end predictive risk management tool can do wonders for some businesses in this regard. DHL Resiliens360 addresses this problem. It provides a multilevel visualisation of the end-to-end supply chain. In the near future, DHL Resilience360 will be able to integrate all the data transmitted from assets and provide information when a truck carrying urgent cargo is about to break down or when a warehouse has been affected by any incident. It can also instantly change the freight mode from air freight to road freight or vice versa as a contingency backup plan.

There could be hundreds of value addition services using AI and (IoT) capabilities in coming days through which probable risks to the supply chain can be addressed.

In order to fuel efficient global trade, the logistics industry in the developing economies like Bangladesh should accept IoT in its day-to-day activities. This will add value and increase efficiency and revenue for all stakeholders. Enjoying maximum benefits of IoT in logistics sector will require technological advancement in areas like retail, healthcare, agriculture, manufacturing, transportation, security surveillance, smart homes etc. Together, these sectors can contribute towards a strong IoT ecosystem. Cooperation between industry stakeholders and readiness to invest on IoT will expedite this advancement. Internal preparation and required expertise is crucial since more IT security surveillance would be essential for monitoring hackers, cybercriminals and terrorists to protect privacy and personal information. Business associations and government policymakers along with the industries sector need to combine efforts to ensure that IoT utilisation reaches its full potential in the country.

Al Fattah Md Azim is currently working at a multinational supply chain and logistics organisation. 


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