4. IMPACTS OF IOT ON LOGISTICS
The application and development of IOT have already had significant effects on many industries, especially in the field of logistics. Because of it, the style of business operation, upstream and downstream partnership and customer relationship are changing. From the figure below we can analyse the expense breakdown of main logistics functions.
As we move from 15 billion connected devices today to some 50 billion by 2020, and embed sensor technology and analytics throughout our organizations, companies will enjoy unprecedented
visibility into operations, enabling new sources of value. This visibility, in turn, will transform how logistics providers make decisions, including about how goods are stored, monitored, routed,
serviced, and delivered to customers, as well as operational health and safety practices.
Furthermore, the proliferation of IoT for our homes, work environments, cities and even ourselves (with the emergence of wearable technologies and biomedical sensors) creates opportunities for new business models in logistics. We believe there is hidden value yet to be realized.
IoT promises far-reaching payoffs for logistics operators and their business customers and end consumers. These benefits extend across the entire logistics value chain, including warehousing operations, freight transportation, and last-mile delivery. And they impact areas such as operational efficiency, safety and security,customer experience, and new business models. With IoT, we can begin to tackle difficult operational and business questions in exciting new ways.
The Transport and Logistics industry relies on solutions that can move its people and cargo safely and efficiency, something which is becoming increasingly complex as fuel costs remain unstable, labour rates rise, traffic increases and the regulatory environment changes frequently. Operations are becoming more challenging but transport and logistics remain essential to an enterprise’s productivity and access to real-time data is a critical component.
Today’s mobile technologies and the Internet of Things (IoT) offer enterprises the ability to accelerate productivity, profitability and operations with bespoke solutions, tailored specifically to their business processes. Implementing the right IoT solution can allow enterprises to connect all of their mobile devices across a centralised cloud network and capture and share their mission-critical data. This gives organisations real-time visibility of their operations and therefore allows for significant improvements in both productivity and efficiency.
This actionable insight is what provides organisations with the Enterprise Asset Intelligence™ they need to make improvements. This enhanced business knowledge can be gained through a set of enabling technologies in the areas of asset management, cloud, mobile and Big Data, and can dramatically improve end to end visibility, warehouse and yard management and fleet management.
By leveraging Enterprise Asset Intelligence, transportation and logistics can dramatically improve the following areas:
1. End-to-End Visibility
Complete visibility enables organisations to make more effective, timely decisions and reduce delays by detecting issues faster. Mobile devices such as radio frequency identification (RFID), barcode scanners and mobile computers are dramatically improving supply chain visibility and operations. Many transportation and logistics companies using RFID today are reaching nearly 100 percent shipping and receiving accuracy, 99.5 percent inventory accuracy, 30 percent faster order processing and 30 percent reduction in labour costs.
2. Warehouse and Yard Management
Sitting at the centre of transportation and logistics businesses are the warehouse and/or yard, and their efficiency directly impacts the cost of doing business and the ability to compete. The first step towards optimum efficiency is embracing digital technology such as IoT-enabled mobile devices designed to track inventory data, equipment and vehicles. These devices can capture and share mission-critical data across the cloud, ensuring that the right products are in the right place at the right time.
3. Fleet Management
With the IoT, companies can gain intelligence remotely around their assets in the field, allowing them to facilitate need-based maintenance and eliminating unnecessary and/or reactive responses. The technology can offer numerous benefits for your workforce, including:
• Insight into maintenance history, parts availability and inventory records
• Updates on certain conditions such as bad weather or traffic, enabling them to better respond and/or prepare
• Real-time insight enabling them respond to customer service inquiries in a timely manner
• Access real-time visibility into driver and vehicle performance, enabling them to increase the safety of drivers, reduce damaged inventory and decrease insurance-related costs
The use of mobile technology provides businesses line of sight into equipment, inventory and business processing, and leveraging these types of solutions with enabling technologies like the IoT can deliver more asset intelligence, leading to more informed decisions and ultimately increased efficiency.
Amazon caught a lot of attention when it announced its plan to use drones to deliver products to customers. Since then, many companies have announced their plan or are considering the idea. But skepticism is still widespread as this use of a new transportation mode in the future of logistics. The study found that a whopping 27.31% of people believed that the chance of drone delivery as a reality in the next 5 – 10 years is very slim. 5.88% think that drone delivery will never happen. However, not everyone in the study by EFT is so skeptical of drone delivery. 27.31% of survey respondents believe drone application in shipping will occur only in highly specialized areas, such as delivering drugs to remote locations. 36% of respondents believe that there will be some form of drone delivery in 5 – 10 years and 6.3% believe that it will be commonplace in 10 years. Without a doubt, drone delivery faces many challenges just as every new technology in its infancy does. A significant number of respondents (35.71%) believe that regulatory issues will be the main difficulty while 23.95% believe that it will be safety issues. 11.334% of respondents think that the cost of creating a network will be the biggest challenge, 10.92% believe that it will be reliability issues, 10.08% think it will be weight and size limitations and 2.94% think it will be technology issues. Thirty-one percent of manufacturers and retailers want to see logistics companies use drones for product delivery. But are the 3PL companies ready to adopt the technology? The study found that only 1.5% of the companies can provide expertise, knowledge and service while 1.5% of businesses have comprehensive knowledge and know-how, and plan to provide the service.
Google’s vision of driverless electric vehicles has had a lot of people predicting that the future belongs to self-driving vehicles. Such a vehicle is equipped with electronic eyes and ears and capable of navigating without human input. Its application in logistics can make an enormous reduction in costs. But are 3PL companies ready for this cutting-edge technology? The study found that 42% of manufacturers and retailers would like 3PLs to have some knowledge and expertise of driverless vehicles. However, 0.75% of the 3PL companies can provide expert knowledge and service while 1.5% of them have comprehensive knowledge and expertise and plan to provide the service. On the bright side, 12.78% said they have some knowledge, and 6.02% said they planned to have knowledge and services. These statistics show that while manufacturers and retailers want to see logistic companies adopting emerging technologies, the 3PL companies themselves are taking a cautious step in that direction. However, many of them are willing to learn about those technologies and provide services. What are your thoughts on these four emerging technologies and how they will shape the future of logistics?