Do you want proof that IoT addresses current business cases and generates new use cases? Just look at transport companies.
Now more than ever, technology is driving business strategy – and nowhere is this more evident than in the logistics industry. The logistics industry was an early adopter of the internet of things, and the stories about the digital transformation of the truck fleet are many. They include using sensor-based technology and analytics to track where trucks are on the road, whether they’re meeting deadlines, what road repairs and weather conditions look like, and even drivers’ safety habits.
Virtually every industry can learn from the success logistics companies have experienced with IoT and analytics. Below are five business lessons from logistics.
Top 5 lessons from the logistics industry for IoT
1. Your customers drive the market
Major shipping companies such as UPS and FedEx felt pressure to increase deliveries during the holiday season as consumers increasingly ordered online.
These e-commerce consumers expected instant order satisfaction, and the only way carriers could achieve this was through mobile technology. GPS-enabled applications provided tracking and data on routes, the ability to reroute vehicles, and the condition of goods on trucks.
In this environment, even one cautious CIO can’t help a business survive without taking a close look at IoT, analytics and the ability to use both for business transformation.
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2. Self-service is important
Using IoT to track goods in transit, coupled with the ability of IoT sensors to monitor the condition of perishable goods, ensures efficiency and reliability. IoT is becoming an indispensable technology that delivers quality service, which is now expected by consumers.
Equally important is consumers’ desire for more self-service options and direct control over the flow of their goods. For example, a customer can order an item from an online e-commerce portal, receive updates on their smartphone about the item’s arrival status, and then receive the item.
If there is a problem with the item, automated systems allow the customer to pre-print the return sticker complete with barcode or save it on a smartphone. This code can be scanned with a handheld IoT device at a return point such as UPS or FedEx, where a return label can be printed directly and affixed to the package being returned.
IoT and mobility technologies enable this type of self-service process, and they can also be integrated with wearable IoT devices, such as the smartphones consumers use to store or print return labels and track goods throughout the logistics process.
3. End-to-end transparency of operations is the new normal
With everyone involved in the logistics process wanting end-to-end visibility of goods and transportation, business silos of information must be removed to keep up with the pace of business and ensure everyone is working with a single source of data.
IoT takes care of this. For example, if a driver breaks down in the middle of the night, someone at head office can see it and send help. If a shipment of products is in danger of spoiling, sensors can detect irregularities in the environment and a shipper can divert goods to nearby markets. None of this could happen in the world of pre-sensor analytics.
4. New safety and compliance requirements bring new benefits
For logistics service providers, meeting safety and compliance requirements is a challenge, but these requirements also offer new benefits.
For example, in 2022, the US mandated that trucks carrying goods cannot exceed 65 miles per hour. In addition, reduction of greenhouse gas emissions, automatic braking and training for drivers were implemented or discussed.
These and future regulations have motivated the logistics industry to consider IoT technology that can be deployed on trucks to monitor and report on speeds, fuel consumption, emissions and even driver behavior such as braking.
Collectively, IoT helps logistics companies comply with new government regulations and also train and work with drivers to improve safety and performance.
5. IoT and analytics don’t mean overthrowing legacy systems
A common complaint across all sectors of the industry is that IoT and analytics don’t work well with legacy systems and it requires costly rip-and-replace data center plan. This is not true. In most cases, there are common ones APIs that can make disparate systems work together. This allows companies to make progress while continuing to gain business benefits from their legacy systems.
Every industry has goals in terms of cost, revenue, performance and customer satisfaction. What we’ve learned from industries like logistics, an early IoT adopter, is that IoT not only addresses current business cases, but generates new use cases as companies understand it and its potential.
The potential that IoT unlocks for logistics is visibility – not just of shipments, but also of driving performance, routes and the environmental conditions under which perishable cargo is transported.
The IoT experiment is a win-win for everyone: both for logistics companies that want to improve performance and control costs, and for their end customers, who want insight into their purchases every step of the way.