IoT has immense potential to revolutionize the logistics industry as we know it. Its use cases are vast and promising. Interview with Trend Leader of IoT at DHL Asia Pacific Innovation Center, Dr. Ng Poh Kai, explores how the logistics industry can successfully leverage IoT and implement its use cases efficiently. He discusses the importance of invoking a mindset of change, training personnel to efficiently use technology and starting projects with the end goal in mind. Discover what your next steps are might be to leverage Iot in the future of logistics!
By Dr. Ng Poh Khai, IoT Trend Expert and leader, DHL Asia Pacific Innovation Center
1. What are some significant use cases of IoT in the logistics industry?
IoT use cases in logistics can be classified broadly into three categories: warehousing operations, freight transportation and last-mile delivery.
IoT technologies can be used to improve warehousing operations, for example through smart-inventory management and control for real time visibility, damage detection, optimal asset utilization for machinery and vehicles, predictive maintenance, connected workforce and smart energy management.
Whereas in freight transportation, businesses could utilize IoT technology for location and condition monitoring as well as end-to-end supply chain risk management. As for optimization and customization of last-mile deliveries, DHL has used IoT to enable automatic replenishment and anticipatory shipping. You can find out more about this in our ‘Internet of Things’ trend report. It’s a good read!
2. How can logistics providers move forward and leverage the IoT trend?
In order for logistics providers to fully leverage the potential of IoT technologies, they need to ensure that their business operating models are supportive of its implementation. Three parts of their operating model need to be addressed.
First, People. We need to equip our teams with the right knowledge and skills to adopt such new technologies and feel confident working with them.
But, I also believe it is important for more businesses to inculcate a culture of embracing change. To create a culture where employees are open to the idea of ”Think Big, Start Small, Fail Fast”. This allows organizations to test concepts and fine-tune them quickly. Quoting Thomas Edison, “I have not failed; it just happened to be a 10,000 step process.”
Second, Process. Best results come from constantly optimizing our processes. Operational teams start working hand-in-hand with IT teams to ensure optimal results. I always say that IoT is actually IT and OT combined!
Third, Technology. IoT can be deployed for a large range of use cases in our industry. Each use case involves different technologies and solutions, each designed specifically for that need. Until today, no single technology or solution stands out as the clear winner. Therefore, I believe it is integral for the teams working on IoT to start by clearly defining the problem definition and outcome before embarking on selecting the right technology, instead of the other way round.
3. What are the key factors required to achieve the successful implementation of an IoT ecosystem in the logistics industry?
There are 5 key success factors I would like to highlight:
- A clear and standardized approach for the use of unique identifiers or ‘tags’ for various types of assets, across the globe and across different industries.
- Seamless interoperability for exchanging sensor information in heterogeneous environments.
- Establishment of trust and ownership of data, and overcoming privacy issues, in IoT-powered supply chains.
- Clear focus on reference architecture for IoT and building a scalable platform that considers the short-term requirements of small-scale pilots as well as long-term implementation needs.
- Change in business mindset to embrace the full potential of IoT.
4. Could you list some examples of how DHL has digitalized their supply chain using IoT solutions?
IoT has played a key role in our overall digitalization journey. First, DHL has created DHL SmartSensor, a product which offers full location and condition monitoring. Our customers can utilize this intelligent device to actively monitor parcel location, temperature and humidity, while also indicating shock and light events, to ensure complete integrity during transportation. The team is also working on next-generation devices which can be compatible with multiple networks, such as GSM, Wifi and Sigfox, to optimize battery life.
Secondly, we are also having good progress in developing our smart warehouse capabilities which enables real-time tracking of assets, resources and inventory. This will provide warehouse managers with real-time visibility of their warehouses to spot anomalies and take pro-active measures to ensure supply-chain and operation stability.
Finally, we are also embarking on initiatives targeting the green management of our facilities. We have seen success stories from the real estate industry and strongly believe that solutions to pro-actively manage our energy consumption and unique indoor facilities exist today. Such solutions include optimized HVAC controls, smart metering and predictive maintenance. They will allow us to reduce energy consumption, optimize our Facilities Management operations and reduce our carbon footprint. This will also help us achieve our DHL GoGreen Zero Emissions target by 2050!
5. What is the next step for IoT in the future of logistics industry?
There is a next step for everybody! Logistics providers can no longer adopt a wait-and-see approach. They need to grasp the IoT concept readily, in order not to be left behind.
IoT adoption should be seen as an integral solution to their suite of services and not just a simple add-on. This will provide logistics providers the edge at a time when customers are also beginning to innovate and enhance their supply chain.
Finally, IoT providers should also form eco-systems with partners that can integrate different parties together. What I envision are strong alliances formed between device makers, connectivity providers, platform developers and system integrators, to offer strong, competitive and holistic IoT solutions.