IoT: Unlocking Value in the warehouse

IoT: Unlocking Value in the warehouse

Of the disruptive technologies that are changing the face of the logistics industry, the Internet of Things (IoT) has been one of the most talked-about because of the promise it brings of providing visibility and unlocking value for customers. While that value is starting to be delivered, there is much more to come. 

Today we are seeing a fourth industrial revolution – one that has been coined ‘Industry 4.0’ - which is built around the use of automation and data connectivity in manufacturing technologies. This combination of trends and new technologies is changing the way that nearly all goods are made, distributed, and consumed - with clear knock-on effects for supply chains everywhere.

For third-party logistics providers (3PLs), that means a focus on digitalization and technologies such as the Internet of Things (IoT) is essential in order to continue delivering innovative, cost-efficient solutions for customers.

What, then, is the potential of IoT for the logistics industry?

Improving the consumer experience

The advance of IoT and 5G networks will enable companies to significantly improve the transparency of the supply chain process, the tracking of data from point of production to the customer’s door, and the accuracy of delivery.

We currently live in a world where you can track a Domino’s pizza being made and delivered, but cannot track a sea freight container of high-value cargo across the globe. However, that’s about to change rapidly with the application of IoT at all levels of the supply chain.

Transforming 3PL decision-making

The Internet of Things (IoT) has the potential to connect virtually anything to the Internet and accelerate data-driven logistics. Everyday objects can now send, receive process, and store information, and therefore actively participate in self-steering, event-driven logistics processes.

Connected warehouses can increase the transparency and localization of all assets through the tagging of individual items, pallets, and operational hardware.

These smart objects can transmit information about their current order, content, and location, enabling automated inventory management with real-time visibility on inventory levels and item conditions.

In recent years, as sensor and analytics technology have dropped in price and are becoming more embedded throughout logistics businesses, companies have begun to enjoy unprecedented visibility into operations, enabling new sources of value. This visibility, in turn, is transforming how logistics providers make decisions, including about how goods are stored, monitored, routed, serviced, and delivered to customers, as well as operational health and safety practices.

Warehouse safety improvement

To leverage IoT for safety improvements, logistics providers have piloted providing employees with wearables, which track them as they move about the warehouse – whether on foot or on a vehicle such as a forklift truck. Through IoT, they have been able to establish a system whereby if a forklift truck comes close to another truck or a pedestrian a proximity alarm sounds, enabling the operator to stop the vehicle.

Similarly, operators have been fitted with heart rate monitors. After the correlation of the data, it was established that there was much more likely to be a close proximity alert after lunch when heart rates are reduced and people can become lethargic.

A connected warehouse

Logistics providers are also working on the use of IoT to deliver productivity benefits and make the warehouse more connected.

At a warehouse in Singapore, one logistics provider has embedded IoT technology for a customer with heat map functions, serving as a real-time location system (RTLS) solution that automatically identifies and monitors the interactions of inventory, equipment, and people.

Statistics gathered from the live reporting are tracked through pre-assigned asset-tags. These provide higher resolution data and heat maps, allowing the warehouse team to gather insights on factors such as safety, traffic build-up, and workflow efficiency analysis.

The technology encourages ongoing safety behavior and culture. It helps to determine if all personnel are accounted for in the event of an emergency, prevents accidents through automatic reporting on any proximity hazards, and improves safety by prompting alerts when unusual activity is detected on the asset-tag

It means that supervisors are now in a position to have factual conversations – informed by data - with their direct reports about safety issues. That’s crucial to improving morale in the warehouse.

Aside from boosting safety standards in the warehouse, the IoT technology also distinguishes security breaches, and helps to streamline operations, combat congestion, and optimize aisle product placement, thereby driving higher productivity.

In essence, this is about understanding where people are in the warehouse, optimizing what they’re doing, and becoming more productive and efficient.

The Internet of Things is enabling a big step forward in the development of smart warehouses – ones in which 3PLs can see, understand and optimize processes - leading to improvements in operational efficiency, increased transparency, optimization of resources, and improved process quality and performance on behalf of their customers.