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Internet of Things poised to transform global logistics

April 17, 2015
A new trend report compiled by Cisco Consulting Services and DHL claims that the “Internet of Things” will completely transform global supply chain structures and logistics practices – especially when it comes to “last mile” delivery practices.

A new trend report compiled by Cisco Consulting Services and DHL claims that the “Internet of Things” will completely transform global supply chain structures and logistics practices – especially when it comes to “last mile” delivery practices.

“The IoT presents a unique technology transition that is impacting all our lives and will have huge implications for the business of logistics,” noted Markus Kückelhaus (at left), VP-innovation & trend research for DHL, in the report.

“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,” he added.

“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,” Kückelhaus pointed out.

Chris Dedicoat, president for the Europe, Middle East, Africa, and Russia (EMEAR) division at Cisco, emphasized that over the next decade, the logistics industry could unlock higher levels of operational efficiency as the IoT connects in real time millions of shipments being moved, tracked and stowed each day.

“In warehousing, connected pallets and items will be a driver for smarter inventory management,” Dedicoat (at right) explained. “In freight transportation, tracking and tracing of goods becomes faster, more accurate, predictive and secure while analytics of a connected fleet can help to predict asset failure and to schedule maintenance checks automatically.”

Kückelhaus also said that, with the advent of IoT, Internet connections now extend to physical objects that are not computers in the classic sense, such as forklifts and streetlights.

Yet there is “latent information” intrinsically in all of those items and when they are put to use as well. When such “unconnected” items are connected to the Internet via IoT technology -- when “we light up ‘dark assets,’” Kückelhaus added –- vast amounts of information emerge, along with potential new insights and business value. For example:

  • A connected streetlight can sense the presence of cars, and provide information to drivers or city officials for route planning and to optimize the flow of traffic.
  • A connected forklift can alert a warehouse manager to an impending mechanical problem or safety risk, or be used to create greater inventory location intelligence.

Cisco’s Dedicoat also believes – based on the 29-page report’s finding that – that connecting delivery personnel with surrounding vehicles and people via the IoT could become a better way of “monetizing and optimizing” return trips to improve efficiency and service in last mile deliveries.

According to Cisco’s economic analysis, IoT will generate some $8 trillion in global “value” over the next 10 years as a result of efficiency improvements and other metrics.

That “value” will come from five primary areas, Cisco noted:

  • Innovation and revenue ($2.1 trillion);
  • Asset utilization ($2.1 trillion);
  • Supply chain and logistics ($1.9 trillion);
  • Employee productivity improvements ($1.2 trillion);
  • Enhanced customer and citizen experience ($700 billion).

Cisco and DHL said they are also in the midst of collaborating on a joint IoT innovation project designed to improve “decision-making in warehouse operations” through near real-time data analytics based on Wi-Fi location data of selected devices.

That project is based in part on Cisco’s Connected Mobile Experiences or “CMX” platform, which uses the high-density wireless network to collect aggregate location data on Wi-Fi connected devices, the company noted.

About the Author

Sean Kilcarr | Editor in Chief

Sean previously reported and commented on trends affecting the many different strata of the trucking industry. Also be sure to visit Sean's blog Trucks at Work where he offers analysis on a variety of different topics inside the trucking industry.

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