Fueled by falling sensor prices and the emergence of high-speed 5G data networks, the internet of things (IoT) is helping transform manual logistics processes into “smart” supply chain operations.
Ben Ames has spent 20 years as a journalist since starting out as a daily newspaper reporter in Pennsylvania in 1995. From 1999 forward, he has focused on business and technology reporting for a number of trade journals, beginning when he joined Design News and Modern Materials Handling magazines. Ames is author of the trail guide "Hiking Massachusetts" and is a graduate of the Columbia School of Journalism.
One of the most widely used buzzwords in the logistics sector in 2022 is “digitalization.” The word is a useful umbrella term for the evolution to computer-based processes from manual procedures that relied on pencils and clipboards in the warehouse or printed manifests at the loading dock.
But references to the trend nearly always ignore the tactical steps needed to make digitalization happen. Your DC probably doesn’t have a magic wand that transforms basic paper checklists into cloud-based software platforms. So how are practitioners driving toward the goal of pulling logistics processes into the 21st century?
The answer in many cases is the internet of things (IoT), a network of web-connected sensors that can be attached to anything from crates and cases to forklifts, conveyors, and locomotives. Sure, it’s another industry buzzword, but the IoT has accelerated out of the garage and onto the racetrack in recent years, fueled by the falling price of sensors and the blazing speed of fifth-generation (5G) cellular data networks. A quick look around the supply chain sector reveals many examples of ways in which the IoT is already earning its keep, helping to speed deliveries, save money, and—yes—digitalize logistics.
MAKING THE RIGHT CONNECTIONS
One of the prime use cases where IoT solutions can deliver digitalization is in trucking—a sector in which sensors are fast becoming a critical tool for monitoring far-flung operations. So it’s no surprise that a recent report from the Swedish information technology (IT) specialist Ericsson found that cellular IoT connections continue to grow exponentially in the transport industry, where they’re expected to increase to 292 million in 2030 from 100 million in 2020.
The number of IoT connections will grow as older trucks are retrofitted with sensors and new trucks are equipped with fleet telematics, the report also said. In both cases, the new cellular IoT connectivity will give fleet managers and drivers access to data from an array of onboard sensors. According to Ericsson, the investment could pay off through overall cost savings of more than 6% for a mid-sized trucking company, with one-third coming from driver-assistance capabilities like accident and traffic avoidance, and two-thirds from truck and trailer monitoring.
DUDE, WHERE’S MY TRAILER?
One such asset-monitoring solution is the IoT system developed by telecommunications vendor Globalstar in partnership with TGI Connect, a Canadian company that provides asset-management solutions to the transportation industry. Under the arrangement, TGI uses Globalstar’s tracking devices and satellite network to map the locations of clients’ freight trailers.
Globalstar says the savings add up quickly, since millions of trucks crisscross North America every day. And every time a load is late or lost, carriers must walk through their yards looking for available trailers, call customers to see if they are detaining trailers, or lease extra trailers to ensure on-time delivery. To help clients avoid those extra costs, the partners keep tabs on the global positioning system (GPS) coordinates of each trailer through a solar-powered sensor attached to each unit.
Railroads are also using sensors to digitally track and monitor freight movements, according to Nexxiot, a Swiss provider of IoT hardware, software, and analytics. Rail networks span vast distances, with 140,000 miles of track across the U.S. freight network alone, and that sheer distance has traditionally made it difficult for rail operators to monitor their locomotives, cars, rails, and freight. But attaching connected IoT sensors to those assets now allows companies to monitor their operations in real time and identify opportunities for trimming costs as well as improving sustainability and safety, a Nexxiot white paper says.
For instance, companies can now detect safety problems like a handbrake activation issue, a train traveling past safe speed limits, or an abnormal shock as a result of an impact. With the information provided by those near real-time alerts, railroads can respond on a timely basis, Nexxiot says.
Logistics service providers are also applying IoT technologies to warehouse operations. One example is a joint effort by DHL Supply Chain and lighting systems provider Signify to create a DC with “smart” lighting. For the pilot, which was conducted at a 338,000-square-foot DHL Supply Chain facility in Lockbourne, Ohio, just south of Columbus, the companies installed internet-connected motion sensors in an effort to improve illumination, boost safety and productivity, reduce CO2 emissions and energy consumption, and cut operating costs.
And while switching off the lights when you leave a room sounds like advice you might get from a scolding parent, the strategy paid off due to DHL’s large scale. The pilot project has slashed energy costs by 49% at the test site. And with DHL’s big footprint—the company operates 500 sites in North America, covering over 140 million square feet of real estate under management—greater savings could come in the future.
The Pozyx RTLS sensors track bins, orders, pallets, returnable packaging, and vehicles both in the warehouse and on the road, providing a detailed overview of pallet and goods locations and their movements. Among other benefits, the RTLS system simplifies inventory management and can lead to better space utilization, reduced costs, and increased safety in the warehouse, Pozyx says. The company adds that the system will also allow users to evaluate and analyze material handling routes to enhance process workflows, resolve bottlenecks, and optimize the warehouse footprint.
Yet another way that IoT technologies are promoting the development of digitalized supply chains is by supplying the data that feeds automated operations, according to Patrick Hoffmann, senior vice president at the procurement and supply chain consulting firm Proxima.
“Most organizations lack transparency due to limited data and, more often, the skillset to interpret the data to define their organizational strategy,” Hoffmann said in a statement. “As organizations become even more lean, digital solutions such as artificial intelligence, machine learning, and robotic process automation (RPA) become more relevant for assuming transactional tasks. Repeatable processes can be automated to a degree to allow the human resources to focus on more strategic tasks that require specialized knowledge and the ability to interpret results.”
The proliferation of cheap, powerful sensors at every link of the supply chain is changing the way shippers and logistics service providers manage their daily business. Buoyed by a flood of instant data from IoT networks, managers of truck fleets, railroads, and DCs have suddenly gained the ability to see deeper into their own operations than ever before. And that digitalized approach is driving improvements at every step of the way.
Progress in generative AI (GenAI) is poised to impact business procurement processes through advancements in three areas—agentic reasoning, multimodality, and AI agents—according to Gartner Inc.
Those functions will redefine how procurement operates and significantly impact the agendas of chief procurement officers (CPOs). And 72% of procurement leaders are already prioritizing the integration of GenAI into their strategies, thus highlighting the recognition of its potential to drive significant improvements in efficiency and effectiveness, Gartner found in a survey conducted in July, 2024, with 258 global respondents.
Gartner defined the new functions as follows:
Agentic reasoning in GenAI allows for advanced decision-making processes that mimic human-like cognition. This capability will enable procurement functions to leverage GenAI to analyze complex scenarios and make informed decisions with greater accuracy and speed.
Multimodality refers to the ability of GenAI to process and integrate multiple forms of data, such as text, images, and audio. This will make GenAI more intuitively consumable to users and enhance procurement's ability to gather and analyze diverse information sources, leading to more comprehensive insights and better-informed strategies.
AI agents are autonomous systems that can perform tasks and make decisions on behalf of human operators. In procurement, these agents will automate procurement tasks and activities, freeing up human resources to focus on strategic initiatives, complex problem-solving and edge cases.
As CPOs look to maximize the value of GenAI in procurement, the study recommended three starting points: double down on data governance, develop and incorporate privacy standards into contracts, and increase procurement thresholds.
“These advancements will usher procurement into an era where the distance between ideas, insights, and actions will shorten rapidly,” Ryan Polk, senior director analyst in Gartner’s Supply Chain practice, said in a release. "Procurement leaders who build their foundation now through a focus on data quality, privacy and risk management have the potential to reap new levels of productivity and strategic value from the technology."
Businesses are cautiously optimistic as peak holiday shipping season draws near, with many anticipating year-over-year sales increases as they continue to battle challenging supply chain conditions.
That’s according to the DHL 2024 Peak Season Shipping Survey, released today by express shipping service provider DHL Express U.S. The company surveyed small and medium-sized enterprises (SMEs) to gauge their holiday business outlook compared to last year and found that a mix of optimism and “strategic caution” prevail ahead of this year’s peak.
Nearly half (48%) of the SMEs surveyed said they expect higher holiday sales compared to 2023, while 44% said they expect sales to remain on par with last year, and just 8% said they foresee a decline. Respondents said the main challenges to hitting those goals are supply chain problems (35%), inflation and fluctuating consumer demand (34%), staffing (16%), and inventory challenges (14%).
But respondents said they have strategies in place to tackle those issues. Many said they began preparing for holiday season earlier this year—with 45% saying they started planning in Q2 or earlier, up from 39% last year. Other strategies include expanding into international markets (35%) and leveraging holiday discounts (32%).
Sixty percent of respondents said they will prioritize personalized customer service as a way to enhance customer interactions and loyalty this year. Still others said they will invest in enhanced web and mobile experiences (23%) and eco-friendly practices (13%) to draw customers this holiday season.
That challenge is one of the reasons that fewer shoppers overall are satisfied with their shopping experiences lately, Lincolnshire, Illinois-based Zebra said in its “17th Annual Global Shopper Study.”th Annual Global Shopper Study.” While 85% of shoppers last year were satisfied with both the in-store and online experiences, only 81% in 2024 are satisfied with the in-store experience and just 79% with online shopping.
In response, most retailers (78%) say they are investing in technology tools that can help both frontline workers and those watching operations from behind the scenes to minimize theft and loss, Zebra said.
Just 38% of retailers currently use AI-based prescriptive analytics for loss prevention, but a much larger 50% say they plan to use it in the next 1-3 years. That was followed by self-checkout cameras and sensors (45%), computer vision (46%), and RFID tags and readers (42%) that are planned for use within the next three years, specifically for loss prevention.
Those strategies could help improve the brick and mortar shopping experience, since 78% of shoppers say it’s annoying when products are locked up or secured within cases. Adding to that frustration is that it’s hard to find an associate while shopping in stores these days, according to 70% of consumers. In response, some just walk out; one in five shoppers has left a store without getting what they needed because a retail associate wasn’t available to help, an increase over the past two years.
The survey also identified additional frustrations faced by retailers and associates:
challenges with offering easy options for click-and-collect or returns, despite high shopper demand for them
the struggle to confirm current inventory and pricing
lingering labor shortages and increasing loss incidents, even as shoppers return to stores
“Many retailers are laying the groundwork to build a modern store experience,” Matt Guiste, Global Retail Technology Strategist, Zebra Technologies, said in a release. “They are investing in mobile and intelligent automation technologies to help inform operational decisions and enable associates to do the things that keep shoppers happy.”
The survey was administered online by Azure Knowledge Corporation and included 4,200 adult shoppers (age 18+), decision-makers, and associates, who replied to questions about the topics of shopper experience, device and technology usage, and delivery and fulfillment in store and online.
An eight-year veteran of the Georgia company, Hakala will begin his new role on January 1, when the current CEO, Tero Peltomäki, will retire after a long and noteworthy career, continuing as a member of the board of directors, Cimcorp said.
According to Hakala, automation is an inevitable course in Cimcorp’s core sectors, and the company’s end-to-end capabilities will be crucial for clients’ success. In the past, both the tire and grocery retail industries have automated individual machines and parts of their operations. In recent years, automation has spread throughout the facilities, as companies want to be able to see their entire operation with one look, utilize analytics, optimize processes, and lead with data.
“Cimcorp has always grown by starting small in the new business segments. We’ve created one solution first, and as we’ve gained more knowledge of our clients’ challenges, we have been able to expand,” Hakala said in a release. “In every phase, we aim to bring our experience to the table and even challenge the client’s initial perspective. We are interested in what our client does and how it could be done better and more efficiently.”
Although many shoppers will
return to physical stores this holiday season, online shopping remains a driving force behind peak-season shipping challenges, especially when it comes to the last mile. Consumers still want fast, free shipping if they can get it—without any delays or disruptions to their holiday deliveries.
One disruptor that gets a lot of headlines this time of year is package theft—committed by so-called “porch pirates.” These are thieves who snatch parcels from front stairs, side porches, and driveways in neighborhoods across the country. The problem adds up to billions of dollars in stolen merchandise each year—not to mention headaches for shippers, parcel delivery companies, and, of course, consumers.
Given the scope of the problem, it’s no wonder online shoppers are worried about it—especially during holiday season. In its annual report on package theft trends, released in October, the
security-focused research and product review firm Security.org found that:
17% of Americans had a package stolen in the past three months, with the typical stolen parcel worth about $50. Some 44% said they’d had a package taken at some point in their life.
Package thieves poached more than $8 billion in merchandise over the past year.
18% of adults said they’d had a package stolen that contained a gift for someone else.
Ahead of the holiday season, 88% of adults said they were worried about theft of online purchases, with more than a quarter saying they were “extremely” or “very” concerned.
But it doesn’t have to be that way. There are some low-tech steps consumers can take to help guard against porch piracy along with some high-tech logistics-focused innovations in the pipeline that can protect deliveries in the last mile. First, some common-sense advice on avoiding package theft from the Security.org research:
Install a doorbell camera, which is a relatively low-cost deterrent.
Bring packages inside promptly or arrange to have them delivered to a secure location if no one will be at home.
Consider using click-and-collect options when possible.
If the retailer allows you to specify delivery-time windows, consider doing so to avoid having packages sit outside for extended periods.
These steps may sound basic, but they are by no means a given: Fewer than half of Americans consider the timing of deliveries, less than a third have a doorbell camera, and nearly one-fifth take no precautions to prevent package theft, according to the research.
Tech vendors are stepping up to help. One example is
Arrive AI, which develops smart mailboxes for last-mile delivery and pickup. The company says its Mailbox-as-a-Service (MaaS) platform will revolutionize the last mile by building a network of parcel-storage boxes that can be accessed by people, drones, or robots. In a nutshell: Packages are placed into a weatherproof box via drone, robot, driverless carrier, or traditional delivery method—and no one other than the rightful owner can access it.
Although the platform is still in development, the company already offers solutions for business clients looking to secure high-value deliveries and sensitive shipments. The health-care industry is one example: Arrive AI offers secure drone delivery of medical supplies, prescriptions, lab samples, and the like to hospitals and other health-care facilities. The platform provides real-time tracking, chain-of-custody controls, and theft-prevention features. Arrive is conducting short-term deployments between logistics companies and health-care partners now, according to a company spokesperson.
The MaaS solution has a pretty high cool factor. And the common-sense best practices just seem like solid advice. Maybe combining both is the key to a more secure last mile—during peak shipping season and throughout the year as well.