IoT in logistics: How connected tech is being used to save costs in sector
DHL and Cargotec are among the companies using IoT in logistics to streamline operations, increase visibility and save costs, according to a new report by data and analytics company GlobalData
From tracking lorries in real-time to predicting demand for certain goods in warehouses, IoT in logistics is helping the sector to keep up with the ever-changing face of online sales.
The Internet of Things – or IoT – connects various web-enabled devices and can be used by businesses to streamline operations and reduce costs.
In a report titled IoT in Logistics: Technologies and Usage Cases, data and analytics company GlobalData has assessed how companies are adopting “smart logistics for a smarter supply chain”.
It estimates that the global IoT devices market in the logistics sector is expected to grow from $90m (£70m) in 2015 to $2.44bn (£1.89bn) by 2020, with a 93.5% compound annual growth rate from 2016 to 2020.
During the same period, the number of IoT connections is expected to increase from 15 million to 255.5 million.
Senior technology analyst Alok Singh, who authored the report, said technology with connecting capabilities can help to hurdle the age-old challenge of keeping track of vehicle and parcel locations in real-time.
It also enables logistics organisations to accomplish transparency, efficiency, maintenance, automation, freight safety and cost optimisation throughout supply chain processes.
“Integration of IoT and big data in logistics is expected to be a game-changer, which can enhance the accuracy of organisations’ demand forecasts, discover new demand patterns, and develop new services by sharing data with partners across the supply chain,” said Mr Singh.
In the report, he picks out some of the key technology that is transforming the sector and offers examples of how it IoT in logistics has been adopted.
By far the largest and most mature use case across the IoT market, real-time fleet management and telematics play a vital role in handling maintenance schedules, vehicle usage and suggested routes.
Growing emphasis on energy savings, and reducing overall fleet budgets such as maintenance costs and fuel spend, is pushing the logistics operators to implement fleet management solutions to improve the efficiency and safety of fleet operations.
Real-time visibility into driver and vehicle performance and health is critical to increase the safety of technicians, reduce inventory damage, and decrease insurance-related costs.
Additionally, with real-time insight, technicians and drivers can respond to customer service enquiries on time.
Predictive maintenance allows logistics organisations to monitor machines, predict quality issues and upcoming maintenance, while repairing on schedule to help minimise disruptions to normal operations – instead of forcing the company to react to sudden, unexpected breakdowns.
It provides insights into when and where parts are needed, thereby helping to reduce expensive expedited shipping costs for spares and making it easier to save money by reducing the number of spare parts required.
Predictive maintenance can also help to reduce overtime expenses by providing precise insights into probable upcoming issues by scheduling more accurately and necessary skilled personnel.
IoT plays an important role in creating smarter warehouse management through the use of intelligent devices, sensors and radio frequency identification.
Connected technology provides visibility to the third-party logistics providers and customers regarding the transit and cargo available in the warehouse, which helps them streamline the planning and ordering pattern.
