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Three Ways IoT Is Driving Innovation in Logistics and Supply Chain Management
Table of Contents
Introduction
Optimizing Transportation and Enhancing Shipment Visibility
Improving Inventory and Warehouse Efficiencies
Automating Predictive Maintenance
Next Steps
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Three Ways IoT Is Driving Innovation in Logistics and Supply Chain Management
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Internet of Things (IoT) technology
is helping to reshape and reinvent
supply chain operations
The era of declining brick-and-mortar shopping and increased online purchasing is apparent. Business Insider reported that an estimated 6,400 stores closed in 2017 alone, and more are shuttering in 2018. The popularity of the e-commerce market, which is valued at $2.3 trillion globally, is certainly a force with which logistics organizations must contend, but Internet of Things (IoT) technology is helping to reshape and reinvent supply chain operations with valuable location-based tracking services, asset monitoring solutions, and innovative, process-oriented enhancements.
IoT is perhaps the single-most significant factor in driving this unprecedented, transformational era in the logistics industry. Connected devices and systems are helping logistics businesses, and those that require efficient logistical processes, to reduce operational costs and increase satisfaction for customers, and the combination of these two factors are poised to help businesses remain competitive and maximize their profits.
In this eBook, we will explore the many ways that IoT is helping logistics’ organizations remain competitive in this rapidly changing industry, focusing on:
• Optimizing Transportation
• Enhancing Inventory and Warehouse Efficiencies & Improving Shipment Visibility
• Automating Predictive Maintenance
Three Ways IoT Is Driving Innovation in Logistics and Supply Chain Management
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Optimizing Transportation and Enhancing Shipment VisibilityOne of the most appealing aspects of online shopping is the wide availability of products. When customers find empty or understocked shelves, they turn to their smartphones and buy from online competitors. This can cause businesses to lose sales, as well as their competitive advantages.
In many cases, this challenge is a product of supply chain effectiveness – perhaps one of the most overlooked areas of logistics and wholesale success. Disruptions that impede products getting from where they need to be – whether from the distributor to the warehouse or delivered to the customer – can offset strides made to increase revenue and profits. The more inaccurate the projected delivery schedule, the more difficult it is to achieve sales goals and, ultimately, profitability goals.
With the help of IoT, logistics managers can troubleshoot potential transportation problems that incur lost time and money. When transportation-related supply chain issues do arise, decision makers are better positioned to remediate challenges. Here are two ways IoT is facilitating more effective transportation in the logistics’ industry:
Fleet tracking: When managing product distribution, it is critical to always know where vehicles are in transit. IoT has enabled businesses to more accurately identify when inventory will be – or not be – available. The challenges are enhanced for organizations that offer home delivery from stores to customers’ homes. Fleet tracking helps businesses more easily determine when products will be available to customers and offers insightful data that will help to pinpoint previously unidentified inefficiencies.
Asset monitoring: IoT-enabled sensors can also reveal the status of individual assets in transit, measuring environmental conditions that could have an impact on the quality of goods. This is especially important for perishable and fragile inventory. IoT technologies can identify cargo damages, recording when and where items were compromised. As a result, logistics’ managers can drastically improve quality control and address areas where improvements to asset integrity can be made.
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Smart Shelves – Sensor-enabled shelves can more quickly and accurately communicate how much or how little inventory is in the warehouse and on the sales floor. This is especially important for businesses managing the combination of ship-to-store, and online order/in-store pick-up options. Smart shelf technologies inform re-ordering and re-stocking decisions that are more efficient and reflective of customer demand. Through long-term data analysis, sales trends, product placement strategies, and potential product discontinuations can be more easily determined.
Augmented Reality – Visually-enabled smartphone apps and smart glasses show great promise in increasing the accuracy and efficiency in warehouses through augmented reality technology. Workers are able to see visual product details, such as specific storage locations and picking instructions without searching through stacks of papers and manuals – all while keeping their hands relatively free. This provides greater accuracy and reduces mistakes often incurred with the use of paper documents.
Autonomous Mobile Robots (AMRs) – Robotic assistance is now a reality for some businesses to move or handle products. Using sensors and cameras, AMRs are programmed to analyze environmental conditions, moving safely and autonomously. This can minimize labor costs and reduce the risk of injuries.
Damage Monitoring Sensors – Using Radio Frequency Identification (RFID) tags and sensors that detect product integrity, damaged products can be identified and reported to warehouse managers in real-time. For grocers, this enables immediate notification to inspect the shipment, determine how the damages affect salability, and how many products need to be replaced. For an electronics store, knowing if a shipment of products with limited availability is damaged will allow the store to quickly order more and adjust sales and marketing plans.
Fraud Detection Technology – Tracking sensors prevent what can be a serious threat to inventory and profitability: employee theft. Location-based IoT technologies can easily pinpoint when a warehouse item went missing and where it can be found, making theft detection easier. In some cases, creating employee awareness around these tracking capabilities may even discourage bad decisions in the first place.
Improving Inventory and Warehouse Efficiencies
Once products have safely arrived at the warehouse, businesses must efficiently manage their inventory. Optimizing warehouse operations and inventory management is critical to lowering the bottom line and increasing profitability. For a well-known leading online retailer, this has proven to be one of the most significant competitive advantages. From creating increased operational efficiencies to informing accurate inventory decisions, connected devices are arming the industry with the power to maximize operations in ways that are on par with, or beyond, their ecommerce competitors. Some of the emerging IoT-based inventory management innovations include:
Three Ways IoT Is Driving Innovation in Logistics and Supply Chain Management
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Automating Predictive MaintenanceAutomation continues to improve efficiencies at every stage of the supply chain. However, this also creates a greater dependence on equipment, and it is paramount that everything remains in good working order. Otherwise, logistics’ and supply chain innovations are stopped in their tracks.
Utilizing IoT sensor data and cellular connectivity, managers can avoid downtime by monitoring equipment conditions on a regular basis, recognizing warning signs, and servicing equipment before it fails. Through this combination of IoT, data, and retail expertise, businesses can virtually eliminate costly and dangerous problems through predictive maintenance. Such utilizations include:
• Delivery vehicles: Whether transporting merchandise from manufacturers to warehouses, distributing products to storefronts, or delivering packages to customers, delivery vehicles have become the lifeblood of logistics. With IoT, the frequency and severity of repairs can be reduced. Sensors within delivery vehicles monitor a variety of data points, such as when a truck may need cautionary repairs, which can reduce the risk of more costly and untimely breakdowns and help improve fuel efficiency. From a longer view, predictive maintenance – as opposed to reactive maintenance – extends the life of vehicles, which lengthens the purchase cycle.
• Refrigeration units: The sales of perishable goods are most often associated with grocery stores and restaurants; however, many department store chains compete heavily in the grocery space. Amazon helped pave the way by entering the market with its acquisition of Whole Foods last year. For these retail managers, keeping refrigeration units up and running is a top priority. Too often, refrigeration systems fail, causing foodborne illnesses, disrupting inventory levels, and harming profitability. Even temporary failures, such as temperature fluctuation, can be problematic. However, refrigeration systems can exhibit symptoms of failure long before an emergency occurs. IoT technology enables supply chain managers to identify refrigeration early-warning indicators well in advance, enabling maintenance professionals to conduct repairs and prevent failures before issues escalate.
• AC/HVAC: Heating and cooling systems can deliver automated alerts, preventing shut-downs that disrupt business, especially during extreme weather conditions.
• Electrical power: Logistics’ managers can also use IoT to monitor day-to-day power consumption, aligning it with purchasing trends and inventory levels to create power savings strategies.
Predictive maintenance systems can be at risk when power outages bring WiFi networks down. However, organizations can guarantee an always-on connection to performance indicators through managed cellular connectivity. Cellular-based IoT sensors enable store managers to monitor equipment during these critical times.
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Next StepsThe logistics industry is undergoing a historic transformation, prompted by drastic changes in customer demand and behavior. This transformation is being enabled by ever-advancing IoT technological capabilities that are improving supply chain control and arming businesses with innovations to address rapidly evolving customer habits. This presents a key inflection point for logistics’ managers to redirect efforts in ways that better service customers, improve operational efficiencies, and increase profitability.
To remain competitive, logistics organizations will need to keep pace with aggressive competitors that are already deploying IoT-based capabilities. Maximizing the many benefits of IoT-powered logistics’ solutions requires a strategic plan of attack. Successful IoT initiatives are cross-organizational efforts that
start with multi-departmental business goals. The best way to determine where to start and finish is to have a clear, well-outlined plan for execution and an understanding of what constitutes success.
KORE can help logistics’ businesses navigate the complexities of IoT deployments with end-to-end solutions for rapid design, deployment, and management. KORE comprehensive IoT solutions are built upon reliable, secure, and scalable wireless connectivity and paired with best-in-class equipment from leading manufacturers, a solid and stable management platform, professional IoT services, and world-class support.
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About KOREKORE is a pioneering leader and trusted advisor that helps deliver transformative business performance from IoT solutions. We help customer organizations of all sizes navigate the complexities of IoT and improve execution, so they can focus on operational and business results. Our IoT expertise and experience, global reach, independence, and deployment agility accelerate and materially improve our customers’ return on their IoT investments.