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Illustration of Internet of Things (IOT) in Logistics - Smart Warehousing
Smart WarehousingOct 4, 2022 4:32:57 PM5 min read

How IoT Is Driving Efficiency in Logistics

The logistics sector is a highly complex, ever-evolving landscape. For packages to successfully travel from fulfillment to the end consumer, it requires harmony between technology, processes, systems, and people. 

The Internet of Things (IoT) offers a level of connectivity and insight that can vastly improve end-to-end operations and provide the visibility needed to make timely, strategic decisions. IoT-powered devices, like wearables and sensors, can optimize crucial facets of the supply chain — from inventory management to shipping. The result? More efficient and cost-effective logistics operations. 


The Transformative Power of IoT in Logistics

As we look towards the future of the logistics industry, there’s plenty for business leaders to consider. From the e-commerce boom and increased consumer demand to supply chain disruptions and economic factors, companies now face an inflection point: one in which digitization and the optimization of significant pieces of the supply chain are crucial for driving profitability. 

IoT offers an innovative approach to fostering operational efficiency and weathering volatility in the marketplace. By leveraging connected networks and scalable event-driven architecture, IoT devices can generate copious amounts of data to deliver comprehensive insights – an irrefutable benefit for multiple pieces of the logistics picture, including:

  • Warehousing and storage
  • Inventory management
  • Planning and forecasting
  • Control of transportation


Each phase requires close monitoring and constant enhancement to meet changing demands. As the industry evolves, external factors, such as market trends and customer expectations, will cause new issues to emerge. And solving these challenges will require a certain level of creativity paired with data-driven insights.


Current Issues IoT Can Be Used to Address


Barcode Recording

Today’s consumers not only want, but demand the ability to actively monitor their shipments. In fact, 91% of customers expect order tracking visibility, with nearly a fifth of consumers revealing they track their packages multiple times per day. 

And the real-time data desire rings true for business leaders as well. Businesses want their logistics partner to provide product visibility from storage through fulfillment and shipping. This level of transparency ensures merchandise is accounted for as it travels through various supply chain stages. Because the reality is: misplaced products will impact revenue flow, as well as the customer experience – which, over time, can damage customer loyalty and repeat business. 

This has proven to be a challenge for the logistics sector, with many companies relying on conventional barcode scanning techniques. These procedures are both inefficient and labor-intensive. What’s more, the architecture of transportation systems must be revamped to accommodate real-time visibility. 


Analog Channels

Despite omnipresent digital technologies, businesses still regularly receive orders via analog channels. Ensuing difficulties can manifest in a myriad of ways – inaccuracies in recording shipment details, inefficiencies in order processing, and a more prolonged order lifecycle.  


Transmitting Shipping Details

If logistics companies don’t have a system to transfer shipping details, the details will be transmitted via the service provider. This increases the likelihood of obtaining erroneous records. Often, this scenario is further exacerbated by the absence of qualified specialists. A lack of recorded shipping data can delay loading times and cause disruptions to the delivery process. 


The Value of IoT in Logistics

IoT devices open the doorway to a more efficient, streamlined logistics management strategy. Utilizing actuators and sensors, IoT-enabled devices can collect and deliver invaluable data to provide far-reaching benefits, including:

  • Package identification and tracking in real-time
  • The ability to effectively transmit data
  • Ensuring product integrity and maintaining proper storage conditions
  • Route optimization powered by machine learning and vehicle location monitoring using GPS
  • Delivery time estimation
  • Predictive modeling and forecasting


IoT can also help enhance communication practices. Media breaks, and the use of analog methods like phone and fax, can be swapped for real-time digital interaction to drive forward progress across the board. For instance, resource allocation, transportation costs, and the overall shipping process will be significantly optimized. 

By leveraging IoT, machine learning, and artificial intelligence, outdated methodologies can be retired, improving operational efficiency across the entire sector.


Applications of IoT in Logistics


1. Product & Location Tracking

Tracking products upon arrival at the warehouse is the first leg of the equation. Inventory accuracy is crucial for production stability, successful order fulfillment, and decreasing costs associated with overstocking or understocking. A real-time location system (RTLS) can track goods from storage through the fulfillment process and their arrival on a customer’s doorstep. This enhanced visibility will help businesses avoid product loss and delivery inaccuracies. 


2. Temperature Sensors

Temperature-sensitive goods, like pharmaceuticals and food products, require environmental stability to maintain viability. IoT sensors, paired with the right systems and technology, can be used to tag and monitor cold chain products. These devices can evaluate crucial factors, like temperature, humidity, light, and even vibration exposure as they’re transported from the warehouse to the end consumer. Data captured can play an integral role in notifying the necessary parties of potential damages to goods before they reach a customer’s doorstep. 


3. Data Analysis

Enormous amounts of data can be collected by sensors each day. With the right IoT devices and backend architecture, this data can be organized and analyzed to provide actionable insights. Data can be leveraged for various use cases – streamlining inefficient processes, performing predictive maintenance, and improving warehousing and transportation practices. 

Currently, many businesses face a discrepancy in their ability to transform raw data captured into valuable intelligence. The gap lies in the anatomy of their back-end systems, systems that were not created with an event-driven framework. In this circumstance, companies are limited to performing end-of-day or end-of-week analytics. And where the true value lies in the ability to access insights in real-time. 

That’s why we’ve worked to develop our own event-driven architecture at Smart Warehousing. This framework can accommodate high-volume, fast-streaming data and real-time machine learning for optimal visibility. 


4. Forecasting Demand

Balancing supply and demand is a crucial part of effective supply chain management. By employing IoT in logistics, businesses can lean on technology to forecast demand and satisfy consumer needs. Predictive modeling is performed by analyzing multiple factors, like current market trends, user behavior, purchasing patterns, how goods are used, and customer preferences, to forecast future habits and demand. 


The Multi-Faceted Benefits of IoT 

Leveraging IoT in logistics provides businesses with a clearer picture of their operations. Timely insights can be transformed into valuable improvements across the supply chain – driving down costs and strengthening efficiency. As we look towards the future and more advancements are made, IoT and similar technologies will help create new pathways of opportunity for businesses.