According to a 2017 McKinsey survey, 92% of senior enterprise stakeholders think the internet of things will generate a positive impact by 2020. Yet, more than half of companies use 10% of their IoT data or less.
The gap is likely due to the fact that stakeholders at many firms do not completely understand how smart logistics will strategically impact their businesses and provide ROI. Understanding how real-time location services (RTLS) can affect positive change is crucial to drive your business into the top percentile in your industry.
RTLS products have not only become better at addressing supply chain visibility as a whole, but have also become cost-effective. Hybrid IoT real-time locating systems that combine the capabilities of GPS, GSM, Bluetooth and Wi-Fi help you monitor at a package-level and cost a fraction of what traditional RFID technologies do, sometimes as low as $1 per tag per month and $30 per gateway.
According to an ABI Research report called “Next-Generation Asset Tracking and RTLS Opportunities, Applications and Revenue,” a 1,000-unit active RFID system, including both software and hardware, can cost up to $39,100. By comparison, the cost to implement the same system using Bluetooth is only $10,890, resulting in a 73% savings when using a Bluetooth beacon system.
In short, RTLS is poised to bring a “new logistics order” with a world of benefits including:
1. Shift in the balance of control
Logistics providers had near absolute control before the advent of shipment tracking and monitoring technologies, and clients had nothing more than a foggy, filtered view of the condition, handling and, more importantly, current location and ETA of their shipments. Real-time location tracking coupled with condition monitoring will change the relationship between shippers and their logistics partners, giving shippers unfiltered insight into day-to-day operations and the upper hand in service level agreement (SLA) enforceability.
2. Customized benchmarks
Produce shipments don’t need the same stringent precautions or scrutiny as pharmaceuticals, and there’s no need to spring for the premium shipping service if goods can get by with something thrifty that still minimizes risk. Real-time location services, coupled with localized contextual information like ETAs, current demand, likely overheads and current local demand for inventory, as well as measurable supply chain risk, give shippers and logistics companies alike an analytical tool that can help them agree on realistic and agreeable expectations and compensations, keeping both parties happy.
3. Better supply chain resilience
The biggest advantage of real-time location services is the potential to improve supply chain resilience, especially in the face of growing market turbulence. Political unrest, labor shortages, shifting consumer demand — these are just a few things that could affect changes in shipping patterns and/or logistics strategies. Through contingency plans, a real-time situational awareness about current disruptions and the options available to resolve a situation, knowing which shipment in transit can make the delivery window for another that’s delayed, for instance, can help minimize service disruptions proactively.
4. Improvement on the go
Most organizations are wary of sweeping changes to operations, even if they’re well-intentioned. Location-based dynamic route optimization systems have the potential to change things for the better, one turn at a time. It can, for instance, measure the stops a driver must make against variables, like the window of delivery, route congestion, possible deviations and fuel consumption, continually suggesting different — but more efficient — routes that may not have been evident to the untrained eye. Iterative improvements over time have a greater impact than sweeping procedural changes fraught with risk.
5. Promises become guarantees
Logistics companies have gradually changed tactics; they no longer over-promise without worrying about under-delivering. Instead, they’d rather under-promise so it’s easier to over-deliver. While that helps save face in an industry where service disruptions are inevitable, the underplayed capability makes it harder for logistics companies to win over new business. With the help of location-based logistics performance analytics, better predictability due to real-time data-driven operational optimization, and the assurance that disruptions can be contained and managed, IoT-enabled smart logistics companies can make bigger and bolder service promises without second-guessing their ability to meet them.
6. Cohesive working culture
With real-time shipment data easily available and shareable, everyone’s on the same page. This results in fewer arguments over SLA violations, better transparency about genuine incidents that were beyond a transporter’s control and more accountability when avoidable service disruptions do occur.
It’s important to understand that real-time shipment location data isn’t just feedstock for machine learning; it’s a powerful tool, depending on what a business does with it, of course. It is location monitoring combined with other contextual data from IoT-enabled monitoring systems and APIs that can help deliver better results, drive improvements in operational efficiencies and make logistics companies — and their clients — more competitive.
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