How the IoT Powers Logistics 4.0
Brian Hoey - August 06, 2020
(Not so) fun fact: nearly a third of perishable produce goes bad before it reaches its destination. This is exactly the kind of stat that always gets thrown around when we talk about the food supply chain in particular, but it suggests something about global logistics processes more widely. Specifically, it gives you a sense of just how difficult it is to maintain on-time deliveries, even in areas where doing so is more or less mission critical. This is for any number of reasons—from unforeseen weather events across shipping routes to poor planning and scheduling—but fact remains that shippers, freight forwarders, and logistics planners have a ways to go when it comes to avoiding disruptions.
Luckily, new technologies have emerged in the past few years with the potential to mitigate these problems significantly. The internet of things (IoT), for instance, gives logistics managers the power to gain new visibility and transparency into their workflows than ever before. But what, exactly, are the limits of this kind of technology? Are they merely new tools that can help in a marginal way, or do they have the power to be part of a larger, more transformative process?
Moving Around the Global Factory
When it comes to Industry 4.0, one of the concepts that’s frequently evoked is the “global factory,” i.e. a world in which disparate manufacturing plants are so well connected and integrated that the geographical limitations that currently hamper most production operations will cease to matter. This is an engaging vision of the future—but it’s one that relies on logistics technology keeping pace with manufacturing. To that end, what we need is a Logistics 4.0 to complement Industry 4.0—something that can make the global factory truly global by empowering the same levels of connectivity and transparency on the routes and tours between factories as on the factory floors themselves.
To make this possible, you have to apply the same technologies and techniques to the entire value chain as you do to the factory floor. This includes things like:
- IT integration that powers visibility between various touchpoints across the planning and execution chain.
- Advanced analytics workflows that turn digital data into prescriptive and predictive insights.
- Devices for gathering data in real-time, plus infrastructure for visualizing that data in a way that powers smarter and faster decision-making.
This last bullet point includes the industrial IoT (IIoT), which is becoming an increasingly important part of Industry 4.0 deployments. As such, the IIoT market has been growing year-over-year. Of course, it’s in some ways easier to install devices like these in a factory that has a set amount of space and a relatively fixed number of machines—as opposed to an entire supply chain that potentially spans the globe and includes a tremendous number of moving parts that are rarely in the same space together. At the same time, these are the same realities that make the IoT so crucial to Logistics 4.0 deployments. Without these devices, it would be virtually impossible to track the movements of trucks, containers, ships, and cargo in real time.
Applications of the IoT for Logistics 4.0
By making it possible to keep tabs on moving parts in real time, the IoT makes Logistics 4.0 deployments possible. From there, you’re suddenly able to perform key Logistics 4.0 activities that might not have been possible without this critical technology.
- Tracking: As your shipments move around the world, IoT sensors are able to send a live readout of their location back to your central logistics control tower. With this information, you can boost your agility by responding quickly to new situations. If a manufacturing partner is trying to save costs by doing production-into-the-truck, a live readout of the relevant truck’s location can help them choose the exact right second to start their production run.
- Monitoring: In addition to providing data about locations, some logistics providers are using these connected sensors to feed back information about light, temperature, and other factors. In this way, you can make sure that a food shipment isn’t at risk of spoiling. If something does spoil, you can immediately initiate a new shipment (without waiting for the spoiled goods to arrive), and thus reduce any delays.
- Predictions: As you aggregate potentially millions of data points using this technology, you can then begin to use AI and machine learning platforms to leverage that data into improved supply chain performance. With minute data from a host of past runs, you can better predict how future shipments are going to pan out, then make adjustments and optimizations accordingly. In this way, you can build out more proactive strategies that account for trends and patterns that might be hard for a human planner to identify unaided.
In this way, the tracking and monitoring capabilities—plus the shear glut of data—that IoT devices provide can help lay a strong bedrock for Logistics 4.0 deployments.
Towards Autonomous Supply Chains
The level of technology and analytics integration we described above puts logistics providers and planners in a position to avoid disruptions, mitigate delays, and ultimately optimize their supply chains in previously impossible ways. But it doesn’t represent the ceiling for Logistics 4.0—on the contrary, this technological paradigm can power even more advancements in the supply chain. For instance, as analytics technology becomes faster and more sophisticated, you can begin to introduce elements of autonomous machine decision-making into the value chain. This might look like an IoT-equipped warehouse that can sense when it’s below the strategically-determined stock levels and place a simple order to restock; or it might look like a self-driving truck that can dynamically reroute itself as new traffic and weather conditions emerge.
Some of these workflows are a long way off, but the IoT and related analytics technologies are already laying the groundwork. As adoption increases and technology use evolves, you’ll be able to decrease the amount of manual intervention required for the daily administration of your supply chain. This will leave human planners to work on more valuable and engaging tasks, like tackling long-term strategic questions and big-picture operational changes—all backed by the confidence that many elements of the supply chain can simply handle themselves.
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