Internet of Things

With the advent of IoT(Internet of Things), Internet connections now extend to physical objects that are not computers in the classic sense. A connected pallet, for example, can tell its owner the whereabouts and condition of its shipment and predict its delivery time down to the exact minute. This is new age logistics. A connected fleet can link with commercial and private vehicles for on-the-fly consolidation. A connected street light can sense the presence of cars and send environmental intelligence to drivers. These are just some of the many intriguing possibilities for IoT in logistics captured in this latest edition of the DHL Trend Research series.

The Internet of Things (IoT) is a scenario in which objects, animals, or people are provided with unique identifiers and the ability to transfer data over a network without requiring human-to-human or human-to-computer interaction. IoT has evolved from the convergence of wireless technologies, micro-electromechanical systems (MEMS), and the Internet.

The Internet of Things (IoT) is increasing the connectedness of people and things on a scale that once was unimaginable. Connected devices outnumber the world's population by 1.5 to one. The pace of IoT market adoption is accelerating because of (1) growth in analytics and cloud computing, (2) increasing interconnectivity of machines and personal smart devices, and (3) the proliferation of applications connecting supply chains, partners, and customers.

In fact, there are many groups that have defined the term, although its initial use has been attributed to Kevin Ashton, co-founder and executive director of the Auto-ID Center at MIT and an expert on digital innovation. Each definition shares the idea that the first version of the Internet was about data created by people, while the next version is about data created by things.

Mr. Ashton has said in his presentation he made to Procter & Gamble, which can be best-quoted as- “If we had computers that knew everything there was to know about things - using data they gathered without any help from us - we would be able to track and count everything, and greatly reduce waste, loss, and cost. We would know when things needed replacing, repairing, or recalling, and whether they were fresh or past their best.”

Thus, IoT can dramatically shape our future of Logistics and Supply Chain when I happened to read an interesting report presented by DHL, a part of Bonn, Germany, -based on the Deutsche Post DHL Group and Cisco Consulting Services. The report serves as a thought-provoking and inspirational start in understanding the implications of IoT in logistics.

The expansion of connected technology will generate $1.9 trillion in revenue gains and cost reductions for the global supply chain and logistics industry over the next decade, according to a new report. The trend report estimates that 50 billion devices will be connected to the Internet by 2020, compared with 15 billion today.

The report predicted that the expansion of the “Internet of Things” will have “game-changing consequences” for any organization with a supply chain or logistics operation, including more delivery options for customers and more efficient freight transportation and warehousing. Both Cisco and DHL believe, it will revolutionize business processes across the entire value chain, including supply chain and logistics,” said Markus Kückelhaus, vice president of innovation and trend research at DHL Customer Solutions & Innovation.

Over the next decade, the logistics industry would “unlock higher levels of operational efficiency” as the Internet of Things connects millions of shipments, according to the report. In freight transportation, tracking of goods will become faster, more accurate, predictive, and secure, the report said. Simultaneously, connected fleet analytics will help predict equipment failures and automatically schedule maintenance checks. The firms are also collaborating on a joint IoT innovation project aimed at improving decision-making in warehouse operations with real-time data analytics based on Wi-Fi-connected devices.

The report, entitled “Internet of Things in Logistics,” is available to download at www.dhl.com/internetofthings.