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IoT logistics technology already speeding up supply chains

U.K.'s JJ Food Service implemented the Internet of Things to monitor truck temperatures, ensure regulatory compliance and streamline recordkeeping for 60,000 monthly orders.

The connected infrastructure that forms much of the foundation of the Internet of Things has been around a lot longer than many people realize. Manufacturers and supply chain service providers have been putting sensors on things for ages, and now some have implemented IoT logistics technology to save time and money.

U.K. food distributor JJ Food Service is one of them. The London-based company had to depend on its drivers to record temperatures inside their vehicles each time they made deliveries to ensure that product temperatures complied with regulations.

But drivers weren't always doing it. "If the drivers were rushing, they would forget to log the temperatures. There were manual temperature probes in the vehicles that they were supposed to use at the point of delivery, but half the time the drivers couldn't be bothered," COO Mushtaque Ahmed said. That created a "nightmare" for logistics and transportation teams who must keep up with recordkeeping for 60,000 orders a month. Customer-service teams were unable to answer questions.

So, about a year ago, the company, whose eight distribution centers serve more than 30,000 businesses, went live on an automated IoT logistics system that monitors the temperature of goods carried in delivery vehicles.

Now Bluetooth-enabled sensors in each refrigerated truck send temperature readings to an app on the driver's IoT-connected smartphone, Ahmed said. Drivers and dispatchers are alerted if temperatures fall below certain levels.

Ahmed said the company is using IoT logistics technology to make its business processes more efficient and intelligent and improve its service offerings.

"In terms of legal compliance, customer service, recordkeeping, stock reconciliation, everything is happening behind the scenes without the drivers or delivery person worrying about it," he said.

Cheaper technology enabling IoT logistics

While connected sensors are not new, technological advances are making IoT logistics more affordable and practical, said Guy Courtin, principal analyst at San Francisco-based Constellation Research. Companies are better able to connect people, processes, and data via devices and sensors to improve their supply chains, especially in the areas of logistics, transportation management and retail.

"The concept of track and trace and understanding where things are, where they're going, and ensuring the quality of a product and that the product is what the product is supposed to be -- in logistics that's a huge area where we're seeing IoT playing a big role," Courtin said.

When it comes to IoT logistics for sensitive processes in the life sciences -- transporting drugs and pharmaceuticals, for instance -- companies have to ensure that what left the factory or the warehouse is what is arriving at the destination.

"Traceability is a big aspect," Courtin said. "There is a lot more movement toward putting more RFID [radio frequency identification] and sensors on pallets [and] on trucks and being able to monitor everything in real time, so you know the truck left the warehouse at 7 p.m. and got where it needs to be three hours later."

Now that IoT logistics technology is becoming more mature, companies can use it to keep track of temperatures inside vehicles to ensure that perishable products are safe, he added.

Mark Wheeler director of supply chain solutions at Zebra Technologies, based in Lincolnshire, Ill., agreed. IoT offers a new way that is outside of traditional control-system architectures to connect sensors and assets and, by inference, people to enterprise systems.

"With the right tools, we can connect the sensor or an asset like a lift truck or an over-the-road truck directly to an IoT platform and potentially enable application development and visibility to those sensors and those platforms at a much lower cost than we had with previous solutions," Wheeler said.

Cold chain monitoring in the warehouse, plant, truck and all the way out to the retail shelf is one application, he said. Advances in IoT logistics technology make it possible to monitor produce -- which is highly sensitive to the integrity of the cold chain -- at a much lower cost than ever before. JJ Food is a good example.

IoT logistics capabilities also allow companies to have a keener eye into what's happening with their vehicles.

A company can determine if a connected vehicle has been idling on the side of the road for too long, which could mean it broke down or someone is tampering with it or its contents, Courtin noted.

JJ Food is using IoT logistics technology in this way to know where vehicles are at all times so it can provide top-notch customer service, Ahmed said.

"We track the locations of the drivers and vehicles by taking GPS coordinates from their handheld devices," he said. When customer service gets an inquiry about a delivery, it can determine the driver's location by looking at a dashboard showing the geocoordinates.

"We can also see what the temperature of the vehicle and ... products were at delivery, so if we have any product complaints we can match that back to the data," Ahmed said.

The Port of Hamburg, Germany, has deployed geofencing -- virtual GPS boundaries -- so employees can track where trucks are and which bays are open. That enables the port to optimize loading and unloading of vessels and ensure that vehicles are at the right places at the right times, said Richard Howells, vice president of supply chain solution management at SAP.

"If there's a delay, there's no point in having a truck sitting and waiting there a half hour early," Howells said. "They can tell the driver to go get a cup of coffee to save the driver's frustration and to optimize the process."

Transportation management takes IoT logistics to next level

The next evolutionary step in IoT logistics is transportation management, although it is still early days, Courtin said.

Some transportation management teams already use IoT data in business applications for dynamic routing and real-time traffic analysis.

The combination of IoT logistics technology, such as GPS on trucks, and prescriptive analytics, which is focused on finding the best way to do something for a certain situation, can help companies route their vehicles better, said Lora Cecere, analyst and founder of Supply Chain Insights, based in Philadelphia.

That can keep the supply chain moving by ensuring that big trucks stay out of traffic snarls and possibly improve safety as well, she said.

Companies can also use IoT logistics data to tie the warehouse into transportation management to track individual pallets. Some are even talking about tracking the individual SKUs on the pallets -- from inception to delivery, Courtin said.

Because there are so many different stock-keeping units in the retail supply chain, retailers are often hard-pressed to know the exact locations of their inventory. Retailers, therefore, can use IoT logistics to better track the flow of inventory, he said.

But retail has lagged in using IoT, mainly because prices have always been too high. Now that they have come down, retailers are beginning to attach RFID tags to garments and other items.

There's significant movement toward using IoT in stores to better understand what products shoppers are looking at or buying so retailers can decide which ones to order, he said. Tory Burch is among the companies putting tags on products and installing RFID readers in fitting rooms to track which items are picked from shelves, brought to the fitting room and purchased so they can determine conversion rates, he said.

SAP's Howells said such retailers want visibility into demand and to drive their business processes based on real-time demand signals gathered from connected devices.

"The smart vending machine can have IoT technology built in both to make sure that it's working all of the time, but also to trigger reorder of inventory," he said.

Next Steps

Evaluate third-party logistics providers (3PLs)

Understand supply chain risk management

Read a handbook on sensor technology

This was last published in February 2016

Dig Deeper on Industrial Internet of Things (IoT)

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