By now it is no secret that logistics businesses in terms of their assets like trucks, trailers, chassis, generator sets and containers have operated pretty much in the same way they have for decades.
Company A uses the assets of Company B at a specific start location, for a specific time at a specific rate and then the asset is used then returned to an agreed upon place after company A has transported or used said asset and the transaction is concluded.
This model provides needed equipment services in the supply chain and transactions are simple.
Company A’s (shipper, Logistics provider) are under increasing pressure either internally or externally to improve their overall efficiency and visibility. This has been a growing trend that is now coming to a fever pitch. This trend is primarily driven by the rise of digitalization of the logistics industry but also by key players in logistics such as Amazon, XPO, Deutsche Bahn, Maersk and many others across all modes of transport, who have realized that the future is all about the data.
Company B’s (shipping line, rail operator, trucking company, leasing company, asset-based logistics provider) now for the first time have to start thinking of themselves as more than simply an equipment operator or lessor, but more like an agile real-time data services company.
The transition is not easy as this is a fundamental shift in the way these companies have operated. Visibility which is arguably the largest driver of data has existed previously yes…
But there has never been so much pressure for real-time data, as many operators for a long time were satisfied or dissatisfied with data inputs from inefficient, time consuming manual processes across the supply chain.
Now enters IoT. The Internet of Things in Logistics is about to change all of that. Here’s why.
We are in an amazing time for the advancement of tracking and monitoring technologies. New communications technologies have emerged and are starting to take hold. This is lowering the overall network communications costs and are putting competitive pressure on traditional cellular technologies who are responding. The result is better pricing for data services.
Related
Previously one of the biggest inhibitors to deploying IoT technologies was the device cost. This has also been dropping, not only in terms of the components but we see more capable devices with multiple sensors still coming lower cost than what basic GPS trackers were just a few years ago.
Battery life for non-powered assets has been an issue in previous years but with sophisticated software. sensors and the emergence of solar and other energy harvesting technologies the devices can now last on non-powered assets for many years requiring virtually no maintenance.
We are at the beginning of an explosion of data in logistics. We are starting with data collection which is where most are now. Common phrases like “where is my stuff?”, “what is the temperature of my cargo?” and “did my shipment suffer any damage in transit?” are commonplace.
Now we start to see data insights, big data collection and analysis, artificial intelligence and machine learning and predictive data provided by analytics engines.
The big question is now that this type of data and analysis is becoming commonplace how does an asset operator reap the benefits of this emerging requirement/opportunity?
Change the mindset: Realizing that data is king is essential to being able to develop a winning transformation strategy.
Looking at the future: Your company has to imagine what its equipment will look like but also what it will have to be outfitted with to be competitive in 5-10-15 years and you need to build your technology roadmap around it, continuously checking it against emerging technologies that will give your company and even greater competitive edge.
Data Presentation: You can collect all the data you want, but without an intuitive and logical ways to display it for your customers it will not have any impact.
Focus on the Return on Investment: Starting with using the technology to create efficiencies in your business is the best place to start, but don’t stop there.
Looking at the 4 points above seem pretty logical but none of it will be possible without this most important point.
Listen to your customer
Your customer will tell you what they need and how they need it. You are likely hearing it today on your customer support lines and seeing it unfold in a variety of stress related scenarios in your daily operations. This is your biggest tool to accelerating your transformation strategy.
Some companies will do this themselves and have in-house teams to manage the transformation we are talking about. If this is something that you cannot do or don’t want to take on, then do yourself a favor do your research and partner with an innovative company that specializes in IoT for your market. Their technology and know how will guide you and your business needs because they are forced in order to be competitive to look at the next 10-20 years as a core function of their business and it is their core competence.
It is not hard to realize that some of the most successful companies in logistics in the next 10-20 years will be the ones who:
· Understand the data needs of their customers.
· Excel at analyzing and using the data they collect to improve their operations and/or make better buying decisions.
· Visualize and present data in a simple but meaningful way for themselves and their customers.
· Stay on top of new technologies and treat it as an integral part of their competitive advantage.
IoT is about to change logistics…are you ready?
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