How Internet of Things (IoT) Technology is Used in Logistics

Internet of Things (IoT) Logistics Applications

The Internet of Things is a very wide-ranging set of technologies. The techniques for integrating the digital world into physical objects through data collection or remote control has innumerable applications for both fun and function. One area where IoT is finding particular traction is in the world of logistics, or more specifically supply chain and fleet management.

The logistics industry saw the potential of the Internet of Things early on. The ways in which logistics and IoT complement each other area aren’t hard to see. Logistics techniques and technologies are intended to safeguard and track large numbers of physical objects as they make their way around the world. One strength of the Internet of Things is its ability to turn physical objects into computer manageable data.

In 2015, logistics giant DHL and computer tech pioneer Cisco collaborated on a report entitled “Internet of Things in Logistics”. The report encompasses IoT applications ranging from individual package tracking, to supply chain management within an organization, all the way to fleet management for the thousands of trucks operated by a large carrier like DHL. The report is dense reading, but well worth it for anyone interested in IoT.

We looked at the report in detail and did our own research, as well. Here are some of our favorite things happening in the logistics space as it relates to the Internet of Things.

IoT Fleet Management

Numerous large carriers and smaller tech vendors today leverage IoT technologies to optimize fleet management. A truck or other vehicle is essentially just a big collection of data points when equipped with the right sensors, and that data can be mined just as easily as any other.

UPS takes the concept out to its logical conclusion by placing numerous sensors on each truck. The sensors track a variety of data ranging from average driving speed to the time it takes for a driver to buckle their seatbelt after entering the vehicle. Seconds matter in the logistics business, and UPS estimates they save up to $14.5 million per year by meticulously optimizing their drivers’ behaviors.

Other vendors, such as Kaa, have their own takes on how IoT can aid fleet management. Using their proprietary set of sensors on client vehicles, Kaa can extrapolate data on maintenance needs and even driver fatigue.

This type of data analytics is where the Internet of Things excels. Allowing computer algorithms to manipulate and analyze this unprecedented amount of information has led to immense productivity gains across not just logistics, but industry as a whole.

Supply Chain Optimization with IoT

Steadfast IT research firm Gartner performed a study last year on IoT applications in the supply chain. Their conclusion was that, much like IoT optimization of fleet management, the key to successfully leveraging the new technology is in utilizing analytics smartly and often.

Although computerized inventory control has been around for quite some time, dating back to 1973 when the UPC code was first invented, IoT offers some distinctly new advantages. Unlike older technologies that are only capable of gathering and storing relatively static data, such as the number of objects within a warehouse, IoT allows for true remote control. With IoT, the temperature of a warehouse can be remotely monitored, and unlike older solutions, it allows for that temperature to be automatically adjusted. Humidity, light levels, and other environmental conditions can be monitored and optimized just as easily.

IoT means finer-grained control over the warehouse contents, as well. For example, smart shelves equipped with weight sensors can send an alert when they are running low before the logistics office even has a chance to review the regular usage report. This allows for reorders and transfers to be executed before facilities are affected in the slightest by the shortage.

Logistics and IoT Use Cases

Enterprises across all industries have accepted IoT logistics with open arms. Nestlé, notable for their exceptional market reach, enormous range of products, and the perishable nature of many of those products, has deployed a wireless vehicle management system (VMS) across their entire fleet. Much like UPS, Nestlé trucks are loaded for bear with a staggering array of sensors. In addition to monitoring driving habits, fuel consumption, and maintenance needs, Nestlé utilizes the system to ensure their fleet security. Drivers carry tags or fobs to identify themselves, and the trucks alert the central logistics office if they detect unauthorized personnel in a vehicle.

In the warehouse, machinery manufacturer Itamco leverages the Internet of Things to improve the efficiency of their forklifts. Each forklift, in addition to being outfitted with a variety of sensors and a precision GPS, carries an individual tablet for the drivers use. The warehouse has essentially deployed its own microcosm of Uber. When materials need to be moved, logistics personnel scan a code on the pallet. The system intelligently locates the nearest available forklift and sends a message to the drivers’ tablet. This ingenious solution is estimated to speed up Itamco warehouse operations by an average of 10%.

Finally, IoT technology helps improve employee and customer safety. Dow Chemical, which processes a staggering amount of hazardous chemicals, waste, and other high-risk shipments each day, uses a variety of sensors and identifiers to keep careful track of their goods. Whether chemicals are on a truck, ship, plane, or sitting in a warehouse, Dow Chemical is able to bring up their location and environmental conditions within moments. If conditions should suboptimal, such as temperatures in a warehouse climbing too high, the company is alerted and can solve the problem before it leads to a hazardous spill, explosion, or other incident.

Logistics is one of those fields that affects us all unobtrusively and often invisibly. Although the average consumer may not be aware of how the Internet of Things has improved the speed and safety with which the world around them operates, there is no doubt that it has. We all rely on IoT more than we know in today’s connected world. Without these new technologies, much of the fast, easy commerce we rely on would be impossible.