IoT applications for logistics

Logistics & supply chain management is an interesting application area for IoT that offers opportunities to improve the efficiency of material flows. The development of logistics often aims to reduce transport costs, speed up operations, and improve the security of supply and the transparency of supply chains that are often global. Various environmental efficiency measurements form a new control parameter. Companies want to provide their customers with reliable information on the environmental impact, such as greenhouse gas emissions or water and energy consumption.

_{Figure. IoT at different stages of the supply chain.}

In logistics applications, IoT sensors are attached either directly to transport units, such as pallets, crates or containers, or to mobile machines, such as lorries, trailers or forklifts, or permanently to production facilities, warehouse aisles or key production machines. Different types of sensors allow for different uses. Sensor solutions differ in terms of reading distance, battery life and price. In addition to material handling units, logistics sensing can also include functions performed by smart machines. A smart machine may, for example, order spare parts and servicing for itself, or a smart trailer may act as a router for logistics data for material handling units such as pallets and crates.

Table. Possible IoT sensors.

Logistics management can focus on a single factory or warehouse, but most applications cover broader parts of the supply chain.

• Tracking applications tell you the stage of your orders, where they came from, and where they are going. Key concepts include tracking and tracing. Tracing is used as a quality management tool to indicate where all the components come from and to determine their origin for product recalls, or to indicate the ethical origin of raw materials. Tracking data, on the other hand, is related to logistics control. Tracking can generate alerts if the actual location differs from the planned one.
• In addition to the location of products, warehouse tracking applications monitor environmental conditions such as temperature, humidity, alignment and vibration. These applications are designed to reduce waste and increase safety in international transport chains.
• Optimising supply chains. Route optimisation is an example of logistics control, where the aim is to find a solution to transport all goods to the right places at the right time, while minimising the mileage driven or the amount of fuel consumed. Similar problems exist in forecasting demand in e-commerce and managing stocks. In decision making, the data from IoT sensors is fed to optimisation engines or other AI applications.
• Fleet management and asset management help to ensure that the right amount of resources is available for controlling logistics. Fleet management allows you to monitor the use of trailers, the mileage driven and whether the forklift trucks in the yard are the right type for your needs. For example, managing hundreds or even thousands of shipping containers or collection receptacles is a challenging task. It is difficult to assess the turnover rate of containers or where breakages occur significantly more often than elsewhere.

_{Figure. Application areas for IoT in logistics.}

Supply chain control covers an extensive area, and different hardware solutions can be well justified. Compared to other application areas, IoT systems in logistics have certain specific characteristics:

• Authentication – Supply chains span multiple companies and organisations far apart. The systems must allow for global naming conventions for monitored items and access rights. Centralised management of access rights may not be possible as parties can change quickly in the chain.
• Serialisation refers to the aim of obtaining serial number accuracy for tracking end products. A serial number can be associated with references to events (routing), materials (bill of materials) and documents. Sometimes, however, it is necessary to operate at coarser levels of aggregation such as date of manufacture or batch-level traceability.
• Data lifecycle management – Some of the information collected by the IoT may only be relevant during transport and becomes worthless once acknowledged by the recipient. On the other hand, for products with a long life cycle, such as buildings or large machines, the documentation must be kept for decades and material certificates must be available when needed.

IoT solutions for logistics are a key competitive factor in many industries. E-commerce accounts for an ever-increasing share of total demand, and effective control requires up-to-date data. Similarly, solutions to reduce transport costs are constantly being sought for ever smaller transport batches, such as home deliveries of food products by retailers or completely new operators. As with all investments, IoT projects are required to pay off quickly. The benefits that an IoT system can bring to the supply chain are manifold:

1. Efficient stock rotation and tied up capital: real-time data allows for operation with a smaller buffer.
2. Better management of capacity utilisation rate: constant knowledge of fleet activity allows for higher utilisation of vehicles, shipping containers, pallets, etc.
3. Lower total cost of ownership: Optimised transport routes reduce mileage and the consumption of fuel.
4. Improved ability to respond to rapid change is made possible by combining information about changes in demand and supply chain activities into a single design view.
5. Improved safety: Traceability and trackability are key to product safety. It is also possible to reduce waste and ensure the social and environmental sustainability of the supply chain.

Free global trade, combined with consumers’ need to look into the supply chain requires applications that can provide information verifying that sold aircraft spare parts are not decommissioned, that wine is not counterfeit, that the cobalt supply chain for electric cars does not lead to conflict zones, or that a hospital blood bag has been kept in proper conditions at all times. IoT technology can help solve major problems such as these.

_{Figure. Examples of user interfaces for monitoring logistics with IoT.}

P.s. Did you know that we have implemented tracking solutions with IoT-TICKET, e.g.

• for monitoring and managing the material of power plant construction projects
• for monitoring material flows in the food industry
• for locating and monitoring the use of different types of rolling stock.

IoT-TICKET is best suited for in situations where

• there can be tens if not even hundreds of thousands of sensors
• data is analyzed from a business perspective
• you want to create forecasts and simulations with data analytics.

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_{The author also works as Professor of Industrial Engineering at the University of Vaasa.}