IoT & Supply Chain: United we stand

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IoT & Supply Chain: United we stand

Experts across industries worldwide seem to agree on one core belief: We are only at the beginning of the Internet of Things (IoT) revolution. The sizzling pace of innovation in recent years – particularly the proliferation of embedded sensor technology, wearables, and apps – has already caused incredible change, and in just a few short years. So, what will supply chain design look like when not just 3 percent of things, but 30 percent of things, are connected?

by Gordon Feller

Consider the scale of future impact: Over the next two years, humans will more than triple the number of “things” connected to the Internet, growing them from 15bn today to 50bn by 2020. But 50 bn still represents only a tiny fraction of what could be connected – something on the order of 3 percent of all connectable things.

For many who own and operate supply chains, IoT is already a big deal – and it will only be getting bigger. According to Jon Stine, Intel’s Enterprise Sales GM, Retail, “the global retail industry is in the midst of what might be best understood as accelerated Darwinian natural selection.” Some of the retail species are rapidly evolving; others are headed toward extinction. Supply chain innovation – with a focus upon the digitizing of processes, the use of advanced analytics, and the need for speed – will be a key factor in determining whether a brand survives or thrives.

The global are currently connected. It’s Cisco retail industry is in the midst of what might be best understood as accelerated darwinian natural selection

Jon Stine, Enterprise Sales GM, Retail at Intel

IoT & suply chain: Jon Stine, Intel


The largest and most immediate opportunity for value creation will be found in the digitization of the logistics processes, says Stine. In this day and age, the paper trail is simply not acceptable – especially when every delay impacts sell-through and margin.

What then lies ahead for retailers? An ever-increasing demand for fulfllment speed and flexibility, that’s for sure! Omni-channel retailing will demand a new set of business processes – and faster and faster responses. To win shoppers who will expect delivery measured in minutes and not days, retailers will not only ship from store, but ship one-unit orders from distribution centers.

So far, less than 1 percent of all physical objects that could be connected are currently connected. It’s Cisco that came up with the “50 bn devices by 2020” estimate. By that time, what we call “computers” – PCs, tablets, and smartphones – will represent just 17 percent of all connected devices; the other 83 percent will be other “Ts” in the IoT, including asset-tracking devices and wearables and smart-building devices like you’d find inside a warehouse or a vehicle.

IoT & supply chain smartPORT initiative Hamburg

Gateway to the world: Thanks to its smartPORT initiative, Hamburg, Europe’s second-busiest shipping hub, manages to raise efficiency while keeping the impact of traffic on local citizens down.

IoT technologies are vital building blocks of certain types of connections, which, when taken together, make up IoT. So, too, are other enabling technologies: cloud services, big data, mobility (including location-based services), and cybersecurity. Together, they create the opportunity for unprecedented innovation and organizational transformation.

A series of recent in-depth studies have concluded that IoT, by itself, could generate several trillion dollars of new worldwide revenues over the next decade.

Where the money is

Realizing enormous value from data will come from fve primary drivers: innovation and revenue, asset utilization, supply chain and logistics, employee productivity improvements, and enhanced customer and citizen experience.

Supply chain and logistics alone are estimated by Cisco to provide $1.9 tn in value, which is a promising indication of the untapped potential and profts to gain from utilizing IoT in this industry.

Experts see optimal conditions for IoT to take off in the supply chain industry. The rise of mobile computing, consumerization of IT and sensor technologies, 5G networks, and big data analytics are “pushing” IoT adoption. Logistics providers and their customers are also “pulling” adoption by increasingly demanding IoT-based solutions such as:

  • Optimization of efficiency and network utilization
  • Transparency and integrity control (right products, at the right time, place, quantity, condition and at the right cost) along the supply chain
  • Detailed shipment tracking to have transparency in real time. IoT in the logistics industry ultimately comes down to two important capabilities: “sensing” and “sense-making.” “Sensing” refers to the monitoring of different assets within a supply chain through different technologies and mediums, while “sense-making” is the handling of vast amounts of data sets that are generated as a result, and then turning this data into insights that drive new solutions.

Looking at best practices

As with most technology transitions, it is helpful to look at IoT in a broader context, and to consider some of the best practices from other industries. This can inform and inspire the use of IoT in logistics.

Optimizing asset utilization to derive greater operational efficiency is at the very heart of IoT’s value proposition in the supply chain. Vehicles are among the assets most ripe for improved efficiency, especially in terms of traffic and fleet management. In-vehicle telematics and vehicle infrastructure integration have been vanguard applications in the use of sensor data.

And automotive manufacturers and transportation operators have invested substantially in connected vehicles, including “recovery” systems, uch as LoJack, and in-vehicle driver services, such as General Motors’ OnStar. With IoT, trafc and fleet management applications herald a new wave of efficiency gains.

IoT & supply chain TOPIS system

A more scientific approach: Seoul’s TOPIS system gathers data from streets, buses, taxis, and citizens, using GPS devices to provide more efficient public transport.

One example is Seoul’s City Transportation Information Center (TOPIS), which evolved from a bus management system. It’s responsible for providing efficient public transportation services – by managing and gathering information on all public transportation in Seoul, excluding traffic signals. The TOPIS Center gathers data from streets, buses, taxis, and citizens, using GPS devices, loop detectors, road sensors, video, and citizen reports.

This data enables a scientific approach to transportation management policy. Travelers have access to bus arrival times 24 hours a day, enabling them to schedule their routes and choose which buses to ride. The system has increased transit efficiency, reduced traffic, and improved uptake of transport services through clear communication to the public, raising customer satisfaction.

Fleet management is crucial at the Port of Hamburg, which is the second-busiest port in Europe. Its “smartPORT” initiative has raised effciency and prepared the port for additional growth. The overall goal is to maintain, modernize, and improve the Hamburg Port Authority’s IT infrastructure to support efficient operations and economic development, while minimizing the impact of trafc on local citizens.

An IoT-based approach coordinates all aspects of harbor operations impacting ship, rail, and road trafc. So far, the Hamburg Port Authority has installed more than 300 roadway sensors to monitor traffic in the port area and to track wear on bridges. Digital signs and mobile apps give drivers traffic and parking information. Sensors also extend to waterways (using radar and automatic identification systems to coordinate ship traffic), and a solution that integrates roadway traffic data to help manage traffic disruptions that may occur when ship traffic requires bridge closures around the port area.

Let’s now take a look at the impact of IoT and what we’ve learned around connected logistics, and apply it to the urban environment, deploying it to smarten our cities.The powerful partnerships between IoT platforms and enabling technologies like cloud capacity, machine learning, and artifcial intelligence are the underlying force that today is driving “smart city” efforts around the world.

In the private sector, one of IoT’s biggest promises is in increased operational efficiency. But this technology is not exclusively about lowering costs. For a city, other key metrics could be more important than mere year-over-year efficiency savings.

IoT & Supply Chain: Strong potential

IoT sensors are ideally suited to tracking all kinds of resources, including petroleum and natural gas, electricity, and water. And IoT technology has strong potential to enable greater environmental sustainability. IoT can reduce waste, prevent disasters, and be a critical component of the smart energy grid of the future. Utility organizations, municipalities, oil and gas companies, and consumers themselves are among the many entities and individuals tapping into IoT capabilities to optimize their use of resources.

Hagihon, Israel’s largest municipal water utility company, is leading the way in using smart devices to improve water-system management, maintenance, and revenue collection in the Jerusalem area. In a semi-arid climate, Hagihon has reduced water loss while preserving the company’s bottom line.

IoT & supply chain Hagihon

Smart water management: By mixing high- and low-tech solutions, Israeli water supplier Hagihon has been able to reduce water loss substantially while still keeping costs under control.

The company replaced a traditional, labor-intensive work model with a smart-technology solution, implementing a mix of both high- and low-tech strategies, and cultivating several key technological partnerships, to increase efficiency and profitability. Pump and in-ground sensors allow easy tracking of water pressure and flow. A supervisory control and data acquisition (SCADA) system controls functions based on sensor data analysis. A geographical information system (GIS) provides a real-time map of current conditions. Fixed acoustic sensors, combined with mobile, cloud, and GPS technology, can pinpoint water leaks underground, while ERP and mobile apps support field technician productivity.

This impressive leak detection system has resulted in a significant decrease in overall water loss and has increased profitability. The system has also improved labor efficiency, with sensors taking data collection that was previously conducted manually. This has generated substantial cost savings.

Looking at warehouse logistics

Warehouses have always served as vital hubs in the flow of goods within any supply chain. But in today’s economic climate, they also serve as a key source of competitive advantage for logistics providers who can deliver fast, cost-effcient, and increasingly flexible warehousing operations for their customers. With thousands of different types and forms of goods being stored in the average warehouse today, every square meter of warehousing space must be optimally utilized to ensure specific goods can be retrieved, processed, and delivered as fast as possible. The result is a high-speed, technology driven environment that is ideal for IoT applications.

IoT & suply chain Warehouse - Go with the flow

Go with the flow Flexible warehousing operations are a key source of competitive advantage for logistics providers and their customers.

From pallets and forklifts to the building infrastructure itself, modern warehouses contain many “dark assets” that can be connected and optimized through IoT. IoT allows for the “dark assets” in warehouses – including equipment and pallets – to be “lit up,” generating value from every square meter. In a city manager’s world, consider these public-sector use cases:

  • Pallet and item-level tagging for smart inventory management, realtime visibility, accurate inventory control
  • Video cameras for damage and theft detection, pile-ups
  • Equipment and machinery tagging and central management for optimal asset utilization, predictive maintenance, worker safety
  • Connected wearables for safety, workforce efficiency, and work experience
  • Connected HVAC, lighting for smart warehouse energy management. Swisslog’s “SmartLIFT” technology combines forklift sensors with directional barcodes placed on the ceiling of the warehouse. With the help of WMS data, these create an indoor GPS system that provides the forklift driver with accurate location and direction information of pallets. A dashboard for managers shows the real-time speed, location, and productivity of all forklift drivers and inventory.

Ravas “smart forks” technology incorporates weight scales and loadcenter measurement technology for pallet trucks. An alert is sent to the driver when load capacity has been exceeded or when the load center is uneven.

IoT & suplly chain Warehouse Illustration IoT Connects

IoT Connects Up Warehouse Assets: Tags on each pallet transmit package data at the inbound gateways, while in inventory, and during outbound delivery (1, 2, 3). Sensors on a sorting machine detect levels of physical stress by measuring throughput or temperature (4). Sensors, actuators, and radar/cameras on forklifts and other objects communicate with each other and scan the environment for dangers (5, 6, 7). Sensor-embedded wearables allow workers to share information and interact with machines (8). Sensors connecting HVAC and utility networks optimize energy consumption (9, 10).

Locoslab’s “connected workforce” is another case in point. Precise localization of mobile devices in indoor environments using active and passive RFID technology monitors the movement of people and objects within an indoor environment and applies location analytics to understand where mundane processes can be improved.

One Comment

  1. Jaque Jarowski says:

    Despite the rapid technological progress, supply chain management remains a complex task. The product’s way from the manufacturer to the final distribution involves numerous point-to-point interactions that are in most cases supervised by emails and phone calls. Items can transit through different locations, and it may be hard to maintain end-to-end visibility on their way. The lack of control on any stage can dramatically harm the efficiency of planning and slow down the entire supply chain.

    Luckily, there are some technologies, such as the Internet of Things, that can restructure and optimize these processes. Such networks already contain about 26 billion devices, and this number is expected to triple by 2025.
    Check those post , it might help:

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