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IoT in Logistics: Benefits, Challenges and Applications

  • Harina Rastogi
  • Jun 29, 2022
IoT in Logistics: Benefits, Challenges and Applications title banner

“Today’s leading real-world retailer, Wal-Mart, uses software to power its logistics and distribution capabilities, which it has used to crush its competition.” 

~ Marc Andreessen

 

 

Role of IoT in Logistics

 

In the recent decades we have seen a major shift in the supply chain management processes across the globe. More importantly after the introduction of e-commerce platforms, the whole logistics system has changed. More shipments are being processed on a daily basis and the customer demands have increased. 

 

In order to fulfill all these demands and fight the competition, there is the adoption of IoT in the logistics industry. There was a time when staff was in shortage, markets were broken and profit margins were very low. It impacted this sector a lot. But after adopting IoT there was a gradual shift in everything. 

 

With less labor more work could be done, even the fragmented market was easy to satisfy and profits also improved. Not only IoT but blockchain, cloud system etc, everything has helped the supply chain system to improve. 

 

The overall efficiency of the system increased, the concept of real-time communication, tracking also came into picture. And more innovations are being done to make it more effective and productive. 

 

The role of IoT in Logistics is not limited to effective networking but also communication, GPS tracking systems and so much more.


 

Benefits and Challenges of IoT in Logistics

 

“Self-driving vehicles will automatically choose the most efficient route. Artificial intelligence will dramatically improve logistics.” 

~Dave Waters

 

IoT has a lot of advantages and especially when we talk about logistics then it has played a huge role in improving the past conditions of this sector. IoT devices work with the help of sensors, clouds and network systems. Some of the major benefits of using IoT in logistics are:

 

  1. It helps in monitoring the behavior of drivers and the transport system maintenance.

 

  1. It helps in tracking the inventory as well as real time identification of the objects.

 

  1. It helps to keep the product safe and ensures that storage places are secure.

 

  1. It helps in networking and data transmission.

 

  1. Customers are able to track their goods and estimate the delivery time. This goes both ways as the logistics department can also find out the estimated delivery time.

 

  1. The whole process gets streamlined.

 

  1. The complete process gets controlled with the help of tools and any anomaly is communicated instantly to all the concerned areas.


 

The old patterns and supply chain management system is getting revamped by IoT. Even the communication between different departments is improved through IoT enabled devices. There are no media breaks now. Resources are allocated properly, customers are satisfied and profits are made. What else is needed right?

 

Challenges of IoT in Logistics :

 

Whether IoT is needed in an organization or not ?It is not an easy decision to make. There is a huge sum of investment required whenever a new technology is adopted in business. So, deciding the need and use of it is of utmost importance. 

 

After implementation also, changes are not that easy to adapt. All related departments get affected. Even the employees get demotivated because of the new skills they have to acquire. Therefore, there are certain challenges that IoT in Logistics has to overcome like:

 

  1. There will be a constant struggle between the IT Department and the logistics team or the operational team.

 

  1. IoT is not so easy. Learning it is time consuming and requires training. So, the personnel have to go through training programs and skill development courses.

 

  1. Once implemented, all the data will be gathered and analyzed. Analyzing a huge volume of data is not such an easy task.

 

  1. Maintaining a balance with the current system and prior activities is also not easy.

 

Also Read | IoT in Facility Management 

 

 

Applications of IoT in Logistics

 

“The information about package is as important as the delivery of the package itself.” 

~ Frederick W. Smith

 

Applications of IoT in Logistics have helped companies cut down unnecessary costs and optimize the whole process. The whole process involved in IoT is so wide right from supply to warehousing to transportation that it is very important to streamline everything. 

 

With digital transformation, streamlining becomes very easy. Given below are some of the applications of IoT in Logistics.

The image shows the Applications of IoT in Logistics which include Location Tracking, Environment sensors, Data Analysis, Fleet Management, Demand Forecast and Inventory Tracking

Applications of IoT in Logistics

  1. Location Tracking

 

In logistics, the location tracking application plays a key role in the whole process. There are basically three types of locations:

 

  • Supplier to Manufacturer

 

In this the material delivered by each vendor to the producing company/manufacturer is tracked. If the delivery is postponed due to any reasons then the manufacturing unit can take the required steps and change the vendor.

 

  • To the manufacturing facility

 

In this the drivers and cargo delivery is tracked. Where does the driver unload? Is it the correct place? Is there suspicious activity? All this can be easily tracked down using RTLS. Not only this but when and where to pick up the goods is also checked using this application of IoT.

 

  • At the manufacturing facility

 

Once the materials reach the manufacturing unit, it is time to see if they are unloaded properly. Sometimes, materials get mixed up with old ones. If new materials are tagged properly, they can be tracked down easily and any sort of mixing can be identified.

 

 

  1. Inventory Tracking

 

The concept of smart warehouses is in trend now. IoT enabled Smart warehouses have the potential to control the inventory related issues. In case of over stocking or under stocking, these warehouses give signals and proper measures can be taken to prevent it. 

 

They also check the quality of the goods stored and automatically correct the temperature or any hindrance which affects the goods. All the goods in smart warehouses can be tracked down easily from any place so that no theft occurs.


 

  1. Demand Forecast

 

By using IoT in Logistics we can easily calculate the demand forecasting. Tools help us predict the demands of the products in future and how we can keep up with it by improving the efficiency of our logistics system. 

 

Demand forecasting is done on the basis of customer trends, intentions and taste and preferences. Therefore, it is one of the greatest applications of IoT in Logistics.

 

 

  1. Fleet Management

 

One of the most important and useful applications of IoT in Logistics is Fleet management. Fleet means a group of transport used for cargo delivery or to transfer cargo from one place to another. 

 

With IoT in fleet management, the systems can be improved and streamlined. All the relevant data about the fleet can be collected including the driver information. It also helps to maintain a level of safety. 

 

Apart from information collection, IoT can be used to oversee the fuel and power consumption of the vehicles. Excess of it can be cut short for cost and environment purposes. Drivers can also gain from it as training programs are organized for skill development based on drivers information.

 

 

  1. Data Analysis

 

All the IoT enabled sensors collect a huge volume of data from every point. In order to analyze this data, IoT tools are needed. Managers are responsible to keep up the predictive maintenance and for that data is needed. 

 

Using data analysis is a great way to gather data and make effective decisions and take action against any underlying issues related to warehousing and transportation.

 

 

  1. Environment Sensors

 

In case of perishable goods, medicines etc, it is very important to maintain the right temperature in the warehousing facility. Temperature maintains the quality of such products. 

 

Sometimes, humidity, sunlight and temperature can change the composition and nature of the product. It can cause heavy loss to the industry. Therefore, IoT enabled environment sensors are useful in maintaining the right temperature and they also give alerts whenever the temperature falls below a certain level. 

 

The data arranged by these sensors helps the production department to figure out any damaged goods in the lot.

 

Also Read | IoT in Energy Sector


 

Industries Using IoT in Logistics

 

Many popular companies across the country have used IoT in Logistics. The main aim was to make the transportation, warehousing more cost efficient, effective as well as environmentally sustainable. Given below are some examples of industries using IoT in logistics where you will find technological and IoT based applications:

 

  1. DHL

 

DHL has been successfully using IoT based tools and watches to maintain a safe work environment for the employees. The regional center of DHL which is in Singapore has built a centralized monitoring system so that it can track the employee’s rest level, break times, waste movements, working hours as well as fatigue. This system also helps the employees to be intimate about any possible mishaps or accidents.

 

  1. Nippon Express

 

Nippon has teamed up with Intel to design a program that helps in tracking the whole supply chain management system. The main objective of tracking the whole supply chain was to ensure that no duplicate or counterfeit medicines enter the system. So, for safety reasons, IoT enabled tracking systems are worth it.

 

  1. DB Schenker

 

The whole infrastructure of logistics and supply chain has been integrated and each checking point is connected using IoT enabled sensors. 

 

All the computer systems, vehicles collect data and this data is provided to all the required departments as well as the customers to maintain a transparent system. All delivery locations, routes and shipping conditions are shared with the required parties.

 

  1. Maersk

 

Maersk is the first company that has realized the importance of technology and transparency in the logistics system. The system became so complex and broken that something was needed to fix it up. When IoT is used in logistics, many suitable applications and systems can be designed for tracking the shipment and other things.

 

Also Read | IoT in Data Analytics

 

IoT has offered the logistics industry and the logistics manager the control and efficiency it never was possible. Being able to communicate on a real time basis, transparency, ease of decision making, tracking waste movements are some of the key benefits of using IoT in Logistics.

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