Skip to main content

While logistics and manufacturing have grown exponentially, problems have become more complicated. A single malfunction can disrupt entire analytics’ systems, disrupting processes along the way. At the same time, machines-to-machine connectivity through the Internet of Things (IoT platform) is increasing the value of data companies have to analyze. Regardless of where you sit to view the logistics industry, problems are becoming more evident. The driver shortage shows no signs of stopping, the cost of connected devices is decreasing and resulting in more immediate work for installation and integration, customers are expecting more, and the average revenue for each shipment is decreasing to keep up with free-shipping offers.

Although these problems seem omnipotent, the IoT will be able to pick up the slack in several fundamental ways.

Global Logistics Will Evolve With the IoT Platform

Twin private-sector and public-sector resources and use of the IoT, the value of the IoT platform grew to more than $8 trillion by 2014, reports the Cisco and DHL publication, the Internet of Things in Logistics. This dramatic growth is being driven by an increase in the level of connection in consumer products, such as smart HVAC systems, connected refrigerators, and smart homes. As demand for connection increases in the private sector, the cost of IoT-enabled devices will decrease. Consequently, the cost of implementing IoT-based solutions in logistics will fall at an even faster rate.

Moreover, the benefits of the IoT platform extend beyond technologically-advanced countries, explains Aankhem Inc.. Emerging markets in the Americas, Asia and Africa will continue to increase their awareness and use of the IoT, which will have a significant impact on how today’s supply chain operates. More legacy-based systems will be phased out for IoT-enabled, advanced resources in the cloud.

Iot platform forecast

Costs and Delays Will Be Driven Down

Delays are the harbinger of increasing costs, which spell doom for the logistics industry. However, the IoT platform is currently responsible for reaching an unprecedented 99.5-percent inventory accuracy, a 30-percent reduction in labor costs, and a 30-percent reduction in the time of order processing asserts Supply Chain 24/7. More importantly, the potential improvements go beyond these statistics. Maintenance is becoming proactive, driving down costs from downtime and reducing the workload on humans. However, this does not even scratch the surface of how many other expenses and delays will be reduced as robots become the next wave of workers.

Disjointed Processes Will Become Connected

Even with today’s level of connection, the logistics industry remains disjointed. Organizational silos exist, and many processes remain based on manual entry of data. This will decrease as these silos crack and become connected through the IoT.

For example, a logistics provider will be able to identify potential problems immediately within a given warehouse before the truck arrives. As a result, workers can be relocated to address shortfalls in picking for urgent shipments, reducing deadhead for truckers. This leads to better-reduced transit times and cost savings for the company. A 10-minute delay could be the factor in making a shipment stuck in gridlock on busy corridors. In another example, a chemical manufacturer has used the IoT platform to empower agile systems to ensure production is maintained even when existing resources dwindle, explains Wouter Aghina, Aaron De Smet, and Kirsten Weerda of McKinsey & Company. In this case, the manufacturer was able to predict potential problems with attaining product, formulate an alternative strategy for obtaining needed raw materials, and ensure output and transit remained stable.

While no evidence exists, having this stability could encourage truckers to continue working instead of looking for other employment due to cut hours. Ultimately, the process of moving products from one area to another to increase efficiency and maintain operations will grow smoother as the IoT matures.

Compliance Will Be Easily Attained and Maintained

Visibility and compliance remain top priorities in the modernity and future of logistics, and pressure from government organizations to increase compliance and visibility will only increase. By empowering rapid data capture and analysis of processes in logistics, which can be directly used to aggregate KPIs for transportation and manufacturing, companies will be able to generate an unparalleled into operations, explains Udaya Shankar of Inbound Logistics. As a result, the risk of violating compliance initiatives will decrease, and companies will be able to invest more into the IoT platform and cloud-based systems.

Safety Concerns Will Drive Further Use of the IoT

Companies that violate Occupational Safety and Health Administration safety mandates face stiff penalties, which grow more stringent by the hour. A quick search of OSHA News Releases reveals more than 10 noted fines and investigations of companies in logistics, and many of these incidents involve processes could have been prevented.

For example, a logistics company in Texas faces up to $58,000 in proposed penalties for violations for not having proper safety management standards in place in March 2016. While we can only assume as to why the company did not maintain the required provisions, the IoT platform could have been used to identify potential problems. Specifically, the IoT could have recognized the need to have a manual shut-off valve in addition to an automatic valve, which brings the discussion of compliance back into view.

The logistics industry functions better now than at any time in history, but in all business, there will always be room for improvement. As the global economy becomes more complex, the need to understand the value of the IoT platform cannot be understated. Fortunately, the answer to many of the existing and potential problems rests in having more knowledge about what is and is not going on in given facilities and during transit. That answer is the IoT.