Logistics management simultaneously requires monitoring of multiple activities, such as supply chain and warehousing.
While several factors can affect the process itself and cause delays, there is a solution - the Internet of Things.
The Internet of Things is a technology that provides companies with tools to plan, monitor and increase the security of all operations, simplify processes and increase customer satisfaction.
This technology has become a key focus of many industries, and the logistics sector is no exception. The development of the Internet of Things offers many opportunities in optimizing existing business and generating new business.
In this blog post we will present logistics areas where IoT technology has the most significant impact and explain the drastic changes it will drive.
The Internet of Things (IoT) is a term that we encounter more and more often every day. It is a range of modern technological devices such as smartphones and watches, cards, sensors, household appliances, headphones, etc.
These devices communicate with each other through different communication channels (WiFi, Bluetooth, NFC, RFID), and their purpose is extended through various applications.
Even if Internet technology possibilities are endless in their diversity and complexity, the term's definition is quite simple.
The Internet of Things is the interconnection of computing devices embedded in various objects over the Internet, allowing them to send and receive data.
Companies are increasingly using IoT to improve logistics processes. According to Statista, there are about 10 billion connected IoT devices, and their number is expected to grow to about 22 billion in just five years.
Large industries such as manufacturing, banking, telecommunications and transportation are trying to simplify their work and provide devices that will make business more manageable, cheaper and safer.
It is predicted that global companies will spend over $ 40 billion on IoT technology by the end of 2020 to increase delivery productivity.
Automatic data collection
The goal of connecting the various elements of complex systems is to enable these elements to gather information and communicate with each other to work as efficiently as possible.
Another critical factor, which makes IoT technology so valuable, is gaining insight into these components' performance.
If you are a logistician or entrepreneur, the Internet of Things can help you achieve better results, better analytics, and optimize your processes. Analyzing data allows us to improve systems, equipment, processes and make the optimal business decisions.
Everyday business decisions are the result of a quality strategy of gathering information and their correct interpretation. Results can be improved using advanced technological solutions, and the Internet of Things can help big time.
IoT technology has dramatically increased transparency and further complemented existing track-and-trace systems with a greater volume of relevant information on shipments' status.
Products can be tracked from the beginning to the end of supply chains. The costs of physical distribution are lower due to automation and timely monitoring of the process and smarter use of logistics infrastructure.
Distribution channels are becoming more dynamic, and logistics operators have much greater oversight of operations.
How to effectively apply IoT technology in the logistics industry?
Logistics is an industry to which the adoption of the "Internet of Things" brings numerous benefits.
The reason for this is that logistics as an activity depends on the quality of distribution networks and the quality organization of entities within supply chains, which requires fast and available information at all times.
1. Shipment tracking
IoT technology has the potential to optimize shipment tracking. Location sensors enable real-time monitoring of shipments, both in the warehouse and in the transport itself.
This provides a complete picture of the shipping process, so tracking using location sensors can increase supply chain operations' transparency.
Sensors that monitor the conditions of transported goods (for example, temperature and humidity) can also help monitor and document, which is especially essential for the safe delivery of sensitive goods such as medical devices.
2. Warehouse management
Smart sensors on vehicles, material handling equipment (e.g., forklifts), and buildings (e.g., warehouses) can improve warehousing efficiency.
For example, when a truck enters a warehouse, it is identified by a system that recognizes the license plates. Based on the sensor's information, the smart warehouse management system recognizes which terminals are available and assigns them to the vehicle, and the forklift driver is notified via the application.
The result is reduced unloading time, and the collected data are analyzed to assess overall operational efficiency.
Internet of Things technology can also increase security. Sensors detect dangerous situations (e.g., forklift collisions), warn the driver, and slow down the vehicle and material handling equipment.
3. Predictive maintenance
One of the most recognized areas of application of the Internet of Things in many industries is predictive maintenance.
It is based on the idea that advanced predictive analytics can improve supply chain equipment planning. For example, this is achieved using sensors that detect the condition of equipment and machinery in use.
When equipment or machinery reaches a critical stage in its life cycle, operating personnel are informed that maintenance is required. This makes the machines work more efficiently, which also reduces equipment costs.
Predictive maintenance based on the Internet of Things can also control the supply of spare parts. When the machine breaks down due to a defective component, the spare part can be proactively selected, shipped from the warehouse to the required location and delivered before the machine completely stops working.
Also, breakdowns can be predicted so the vehicle's route can be changed towards the nearest inspection station to eliminate a potential breakdown.
4. Employee productivity and security
Unreliable machines put companies at risk of endangering the lives of their employees. IoT technology's impact on logistics involves protecting employees by detecting equipment problems long before the employee interacts with the tool.
IoT devices in logistics enable monitoring physical security and protecting employees using load-bearing equipment and vital sensors. You can also warn drivers if they do not adhere to safety practices.
IoT sensors significantly increase response time, detect critical changes in strong values, and transmit data to a dedicated platform that alerts the manager and even calls an ambulance if something happens to the employee.
Every employee has a specific set of skills that they "grind" during their working life. The Internet of Things can help gather useful data on employee performance, optimize processes, and create a quality job strategy.
5. Asset tracking and inventory control
For physical objects, such as pallets, packaging, parts, or other equipment, IoT allows you to connect to the Internet through built-in sensors.
In this way, the equipment can be automatically monitored and remotely managed via the existing network infrastructure at any time.
By establishing IoT technology in the distribution chain, it is possible to automatically track assets and control inventory.
Thanks to the connected sensors, business owners will ensure safe storage of products, save time by immediately finding the right thing and reduce human error.
An integrated system that ensures secure product storage saves time and reduces the possibility of human error has been successfully implemented by Amazon (the largest global online store). This proves how much technology can improve asset tracking and warehouse management.
6. Improving delivery
There are several ways in which the Internet of Things makes delivery management easier. RFID tags and associated GPS sensors help track the shipment of goods down to the final stage.
Thanks to connected sensors, logisticians can get real-time location data to ensure weather conditions or other impacts won’t jeopardize delivery.
The vision of the Internet of Things is a fully automated and self-managed supply chain. The Internet of Things is already present in the logistics industry; however, there is still great potential that this technology can realize in logistics.
What does the Internet of Things bring to logistics activities?
The Internet of Things offers logistics companies many benefits. The Internet of Things is likely to enable a fully automated smart supply chain in the long run.
Smart sensors will drive the ordering process and warehousing transactions, and automated transportation will be monitored by the Internet of Things platforms that respond independently to external events.
The demand forecasting analytics enabled by machine learning, and based on IoT technology, will provide a more in-depth insight into customer requirements. This, in turn, will allow further supply chain optimization.
Independent system management enabled by machine learning is likely to transform the supply chain from an automated to a self-managed system.
Such an approach requires almost no human interaction. Examples include automatic planning, initiation, and rerouting of transportation based on machine learning risk prediction without human interaction.
The concept of the Internet of Things in the logistics industry is already present, which is evident in various logistics companies that have already transformed their business processes.
For companies that want to reduce costs by introducing IoT technology, increase revenue and customer service, it is essential to develop a strategy for the implementation of IoT technology because, without the appropriate software architecture, IoT technology has no function.
The Internet of Things will be the backbone of an entirely digitized supply chain. This will allow for further innovations that will fundamentally change the supply chain model.
We should all accept the great opportunities that the Internet of Things offers. But focusing solely on isolated cases of Internet of Things use will not be enough. We need a holistic approach to exploit its full potential.
The Internet of Things provides control and transparency that the world of logistics could not see before.
Thanks to real-time data exchange and communication between devices, the technology dramatically helps improve decision-making and simplifies the business and delivery process.
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