Kevin Maher, country director UK & Ireland at Sigfox, discusses how operational efficiency within such a complex supply chain can be improved using ‘Internet of Things (IoT) technology’.
It is an undeniable fact that the global supply chain has become extremely complex. Even perishable goods can traverse the globe from supplier to consumer, changing hands multiple times in the process.
UK food retailer Sainsburys, for example, sources products from 60 countries, including 1,500 ‘own-brand’ products. High street competitor Asda operates 39 logistics centres nationwide including 21 food depots and operates more than 4,000 heavy good vehicles and 2,000 home delivery vehicles which travel 130 million miles each year, making 800,000 deliveries to store and 20,000,000 deliveries to customers.
This scale of operation is far from unique, but raises a series of significant logistical challenges, especially in terms of visibility – and not just of products themselves, but also the vital but often overlooked Returnable Industrial Packaging (RIP). Serial losses of RIP can have a significant impact on bottom-line profitability, as well as causing scheduling headaches and creating inefficiencies that sap scalability and business effectiveness almost invisibly. This problem is augmented by outright cargo theft, which the British Standards Institution (the UK’s national standards body) estimates to have cost UK companies at least £24 million ($31 million) during 2018, and very likely more.
These challenges have a common solution: end-to-end supply chain visibility, which can not only ensure operational efficiencies are made, but that losses are kept to a minimum, whether accidental or due to malicious third parties.
CREATING VISIBILITY WITH IOT
The Internet of Things is the ultimate supply chain visibility tool, enabling different elements of the logistical system such as pallets, crates or containers through to vehicles to be tracked effectively, along with their cargo. Simply by attaching IoT sensors to the valuable elements, a holistic view of the supplier network is created, which in turn means all parties can obtain accurate and ‘live’ information about shipment location, route and arrival time.
However, there are multiple challenges facing IoT deployments of this nature. Not only do devices have to be trackable anywhere, and for long periods, but they also need to be low-cost in both per-unit and operational terms. This is where the 0G network really delivers, especially compared to WiFi, which is highly limited in terms of range, and cellular, which has significant cost overheads.
IoT-enabled devices connected to a 0G network – essentially a low-power wide-area network (LPWAN) – can transfer small amounts of data at regular intervals that conveys not only location information, but also other vital data such as container temperature. This data can be either relayed to the customer or used for internal efficiencies.
DELIVERING VALUE WITH 0G AND IOT
Those internal efficiencies can add up to significant success for a logistics firm, as Sigfox learned in a recent partnership with leading logistics company Deutsche Post DHL Group. DHL delivers about five million shipments in Germany each working day, which requires the use of thousands of RIP roll cages to contain and transport the parcels through Deutsche Post DHL Group’s 35 parcel centre network. Ensuring that the correct number of roll cages are available at each location is mission critical, so the firm is in the process of fitting 250,000 roll cages with Sigfox smart trackers to provide exact information about their locations and movements.
The holy grail of this type of RIP management is to reduce the overall RIP inventory, simultaneously lowering or removing entirely RIP storage costs and minimising the total cost of operation.
Of course, IoT in the supply chain is a monumental balancing act, between genuine real-time polling and battery life, global coverage vs network costs, and unit cost vs performance, there are many blends, flavours and compromises to be considered. However, a key consideration that is often ignored in the rush to select a solution for today is the potential requirement of tomorrow – flexibility is a valuable asset. A network that not only enables tracking but also allows other data to be sent – without additional network cost or extra infrastructure – can deliver additional value by evolving in tandem with business demands.
KEEPING IT COOL
A good example here is monitoring the temperature of containers carrying perishable goods (especially meat products in the EU and US, which mandate a consistent low temperature be monitored). Another application is monitoring humidity and shocks to fragile loads, a key specification in a global solution called SafeCube, a new company based on a multi-year-long collaboration between Sigfox, Argon Consulting and Michelin.
The global logistics market is set to reach $15 trillion in the next five years, and the complexity we see today is certainly not going to decrease. Visibility will continue to be crucial for supply chain efficiency, and that efficiency will be the central plank of an effective and bottom-line profitable business. In short, it is essential for supply chain managers to take the long view when investing in IoT solutions today, making flexibility and long-term effectiveness their watchword. Reliable and scalable solutions – such as 0G – will continue to deliver benefits for years to come. Welcome to the future of the IoT connected supply chain.