Growing at a CAGR of 6.0% from 2016 to 2024 by volume, the global supply chain and logistics market is predicted to be worth just over $15 trillion by 2024. Some analysts put that growth rate even higher, up to 7% in some cases.
However, there are a number of challenges that the industry needs to solve first, without doubt the biggest being insight. While there are a host of challenges in the handling, storing and interpolating of data, the supply chain industry does not face those as a primary challenge. The first data hurdle it faces is to generate that data in the first place – or in other words develop ‘end to end’ visibility throughout the network.
The good news here is that IoT offers the solution. The bad news is that deploying a non-siloed global IoT network is not a simple process. Analysts predict that there will be 75.4 billion connected IoT devices by 2025 — equivalent to 10 IoT devices for every person on earth. This will be just the tip of the iceberg of course – the supply chain has become increasingly complex, with a single shipment including more than 200 interactions and more than 25 different people, often distributed geographically across the globe.
Diverse threat profile
The threats and risks in supply chain and logistics are not merely technical, but include strict regulatory hurdles as well as extensive criminal threats. Cargo freight crime prevention in the United Kingdom alone cost companies at least an estimated £24 million ($31 million) during 2018, according to the BSI, which also made very clear that this is a lower estimate, with the real figure likely to be much higher. BSI recorded 921 cargo theft incidents across the UK during the first quarter of 2019. A wide range of methods are used to steal goods, including the use of GSM jammers to overwhelm anti-theft devices and alarm systems, while GPS trackers are defeated by storing stolen goods in an overhead environment, blocking access to the positioning satellites. Interestingly, the vast majority of UK cargo thefts occur via a simple but effective tactic – slash-and-grab – where soft-sided cargo trucks are sliced into and the nearest contents stolen. This accounted for 45% of incidents UK-wide.
Hybrid and 0G beats RFID
By deploying IoT devices throughout the supply chain, logistics firms can ensure visibility at all times, as well as combat thefts. Hybrid solutions that use more than one network, such as WiFi combined with GPS and 0G, are much harder for criminals to circumvent, as well as delivering cross coverage and better accuracy the rest of the time.
Although RFID was once seen as the ideal solution to the supply chain conundrum, its technology is heavily flawed in this application. RFID needs an RFID tag on the tracked item and infrastructure in the form of readers (to sense tags) and antennas (to increase the range of those senses). Complex planning and managing between manufacturer and suppliers is required to implement this type of infrastructure. Other requirements are hefty initial investment, developing cloud applications, system integration experts and a significant amount of time. A supply chain operating across 500 sites can take up to 2 years to plan, install and test RFID before it’s up and running.
Better accuracy, better data
It is often the case that organisations know when a shipment left the last checkpoint, for example a seaport, but do not have visibility of its exact location until the next checkpoint, which is often the next port. This is increasingly sub optimal for many logistics applications, including foodstuffs or medical supplies, which can have specific storage and temperature logging requirements over such a distance and time.
By implementing IoT devices across the supply chain, businesses gain a vast array of data that not only fulfils regulatory requirements, but also offers extremely granular insights into the efficiency and real time operation of their networks. From a full overview of routes travelled, warehouse delays and network gaps to ensuring vehicles deliver best performance limiting downtime and repairs, while ensuring driver safety is of the highest calibre, the opportunities are almost endless.
We’re seeing our customers reap the benefits of transforming their operations in this way with IoT and Sigfox connectivity. For example, real-time alerts about delays and transport conditions has allowed Michelin to reduce transit stock by 10%, increase Estimated Time of Arrival (ETA) by 40% and reduce Out of Stock (OOS) situations due to exceptional circumstances (such as bad weather) by a quarter. Cost reductions and an increase in customer satisfaction are only a few of the end benefits that Michelin has been able to achieve. We are seeing increasing interest across geographical locations, including the UK, via WND UK https://www.wndgroup.io/uk/, which recently hit the significant network milestone of 90% complete.
Another good example is Deutsche Post DHL Group, which has outfitted around 250,000 DHL roll cages with smart trackers using a 0G network. The result will be that Deutsche Post DHL Group will have improved visibility of the essential and valuable roll cages, which are used to transport large volumes of parcels – about five million shipments in Germany each working day.
The fact is that the digitisation of the global supply chain is already underway, in a process that will only accelerate as the demands of just-in-time shipping extend from niche industries such as automotive to become the norm throughout the supply chain. The future of the supply chain is digital, connected and global, and it is coming very soon indeed…