Kenton Turner, industry solutions consultant, Tech Data Europe, looks at the many challenges the transport and logistics industry faces – and offers a case study to show how an IoT solution as a service can help the sector overcome them.
The challenges include keeping valuable assets safe when they’re out on the road and increasingly adopting technology to streamline the transport and logistics business. In part this is to satisfy customers’ demand for visibility of their supply chain, so that they too can better plan their own activities – as well as to improve transport and logistics companies’ bottom lines and strengthen stakeholders’ buy-in.
Regarding pollution,the transport industry is subject to ever more stringent environmental regulations, as individual governments and blocs, such as the European Union (EU), look to meet internationally agreed targets to reduce emissions.
Also in the EU, there is much uncertainty how Brexit will play out and its impact on transport and logistics. No wonder companies are increasingly looking to technological solutions against this complex and demanding backdrop.
Delivering in the nick of time
Many businesses operate a ‘just in time’ supply chain model, with raw materials or stock items scheduled for delivery as they’re needed, rather than holding large amounts of stock onsite in costly storage. Providing enterprises with granular, real-time visibility of their supply chain gives them a valuable, competitive advantage.
All transport and logistics businesses face the threats of theft and damage. This is clearly shown by figures from the British Standards Institution, which revealed that, in only the first quarter of 2018, there were 454 thefts from cargo vehicles in the UK alone. According to Europol, losses in Germany were estimated at €2.2 billion in 2016.
Theft is a big cost for the companies who suffer it, with potential loss of cargo and damage to, or loss of, expensive vehicles. IoT sensors can help protect both, enabling transport and logistics firms to constantly monitor their fleet and report incidents to authorities in real-time, even when the driver cannot or is not present.
Better at the breakdown
As with manufacturing, one of the greatest concerns for transport and logistics companies is unplanned downtime. Without sensors providing data on the wear and performance of vehicle parts, they cannot predict and prevent the next breakdown which will disrupt operations and probably result in an unhappy customer.
By using of IoT technologies to monitor fleets and the vehicles’ components, businesses can accurately predict when vehicles need to be serviced, allowing their owners to plan around the downtime and minimise disruption.
Companies face two main obstacles when it comes to achieving greater efficiency; fossil-fuel engines and stakeholders’ buy in. While non-fossil fuel engine technology is improving, most transportation of goods relies heavily on fossil fuels. The EU has earmarked transport emissions as a primary focus of its climate change efforts. It passed the first emissions standard for heavy duty vehicles this year, and cited digital technologies as a primary tool in its strategy for low-emissions.
IoT can’t address engines’ efficiency, but it can ensure vehicles take the best route to reduce environmental impact. Moreover, should a delivery schedule change or an unexpected delivery be requested, having visibility of the entire fleet’s location and routes means that operators can manage their assets in the most efficient way possible in terms of cost and CO2 emissions.
Getting stakeholders to engage in IoT programmes can be hard, but is worthwhile, especially when they are located across countries and continents. Accurate tracking by sensors can encourage greater collaboration, giving fleet operators true insight into vehicles’ whereabouts so, for example, they can recognise and reward safe, efficient drivers.
Solutions as a service
Cost is possibly the biggest barrier of all to transport and logistics companies adopting IoT solutions. Different kinds of sensors are needed to deliver each benefit – from location to vehicles’ performance and security – for every vehicle in a fleet. This does not mean that adopting IoT has to involve a large upfront CapEx investment – instead forward-thinking suppliers offer solutions as a service.
By taking advantage of this model, transport and logistics companies can drive toward a better, more efficient future, reducing downtime and, most importantly, providing their customers with a service that enables them to better plan their time and allocation of resource, thereby adding value and building deeper, mutually successful, business relationships.
The as-a-service approach give customers a plug-and-play model that avoids big upfront costs, lengthy set-up times and being a drain on scarce IT resources – as the real-life example below shows.
SaaS case study: A UK national grocery chain
By opting for the SaaS model, a UK national grocer gained IoT functionality across 67 stores within two months. After Tech Data’s partner deployed the IoT solution, the grocer gained visibility of its supply chain almost immediately, tracking the efficiency of deliveries and stores’ turnaround.
The tracking sensors revealed a higher than expected proportion of parcels were being misdirected – the incidence of mistakes was previously hard to spot. The sensor data is now used to correct small changes to deliver even greater efficiency on a store-by-store basis. It also enabled the grocer to compare the performance of stores so it could identify areas for improvement.
The solution automatically generates data which is displayed in different ways on screen in dashboards and reports. The grocer has been able to improve its delivery processes, which, for example, results in less wastage of perishable items.
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