Logistics experts are continually finding ways to utilize Internet of Things (IoT) to improve systems and networks, reduce costs, and identify new opportunities to generate more revenue. IoT is a system of interconnected computing devices that have unique identifiers to transfer data over a network, without the need for human-to-human or human-to-computer interaction.1 According to Gartner, IoT is about to play an even larger role in retail and supply chain in the upcoming years.
The research firm stated that retailers that are engaged in IoT partnerships with major manufacturers will take substantial market share from competitors.2 Additionally, Gartner listed IoT as a top supply chain technology trend of 2018 – alongside other emerging technologies like blockchain, robotic process automation (RPA), and artificial intelligence, suggesting that IoT will continue to be implemented in logistics processes.3
So what practical purposes does IoT hold now and how is it shaping the future of the supply chain industry?
Improving Asset Tracking
With the “Amazon effect” in full force, consumers now expect a higher level of speed and traceability than ever before. Rather than manual scanning of bar codes, radio-frequency identification (RFID) tags enhanced with IoT, are able to connect to the cloud and businesses can share tracking data immediately to consumers. Shippers can also access essential data through these tags and GPS sensors, including temperature and time spent in transit, which can improve quality control and increase on-time delivery percentage.4
Advancing Fleet Management
IoT, GPS, and other tracking technologies provide shippers with the ability to trace fleets in real time. This visibility allows shippers to proactively avoid potential risks or delays, rather than be responsive to them.5 Data includes traffic, weather conditions, driving patterns, and average speed.6 Analytics derived from RFID also helps identify inefficiencies and determine and manage fleet availability, potential fuel cost savings, driver headcount, preferred routes, and more.7
Enhancing Warehouse Management
IoT sensors within warehouses offer greater accuracy, with the ability to manage and track specific items, equipment, and vehicles through Internet-connected trackers.8 IoT offers a holistic view of a warehouse floor, ranging from ambient temperatures to the amount of inventory and equipment performance. Alarm sensors and closed-circuit television (CCTV) utilize IoT technology to aid in detecting theft within distribution centers – with the ability to detect unusual activity through alerts or lock doors via a mobile app, for example. IoT can also be a valuable tool in monitoring the safety of staff and equipment, as well as reducing risk. Through sensors and aggregated data, equipment failures can be predicted far in advance, reducing the chance of delays, damaged equipment, and workplace injuries.9
These are just a few fundamental ways IoT is already shaping – and growing – within the logistics industry. While the technology is still in its infancy, it has the ability to transform the way we do business. It’s predicted that there will be 50 billion devices connected to IoT by 2020 – a rapid 226 percent increase from today.10 As the technology continues to grow, shippers should focus on managing, monitoring, and collecting data from smart devices to further optimize processes in the supply chain realm.