One of the most exciting applications of IoT in the Supply Chain is in the opportunity of mass asset tracking and monitoring of location and condition of assets or goods in-transit.
In a recent LIVE panel discussion and Q&A, experts on the topic, Thinxtra’s CEO Loic Barancourt and COO Sam Sharief, explored with an industry audience how it’s now possible to gain next generation asset visibility and control, in a way that delivers real value and ROI. You can watch the full recording here:
By attaching low cost connected IoT devices onto returnable assets moving in the supply chain, like IBC’s, drums, kegs and roll cages, it’s possible to now see where they are and what they are doing.
CEO & Managing Director, Thinxtra
The key benefits include:
- Increased asset utilisation
- Reduction of loss ratios
- Enhanced reliability through more visibility
- Reducing operational costs through higher efficiencies
- Improved customer experience
These benefits are very attractive to supply chain businesses and their customers, especially given the disruption and shock the supply chain, transportation and logistics industry has faced this year. Like never before, operations must lift resilience and agility and this demands visibility of the moving parts in the supply chain. You can’t manage what you can’t monitor.
Businesses know they must find ways to pivot and take advantage of IIoT (Industrial Internet of Things) technology to keep their operations stable amid predictable future business disruptions.
When surveyed, the audience agreed. These were their live poll responses during the webinar:
Real IoT at work
To date the two largest deployments of IoT at scale come out of Europe while Australia and New Zealand are scaling up fast.
To better manage peak demand, DHL connected all their 250,000 roll cages in their postal operations with retrofitted IoT devices on the global 0G Network powered by Sigfox.
By understanding where their assets are DHL has significantly increased asset utilisation and enhanced customer relationships.
Peugeot worked with IBM to connect hundreds of thousands of IBCs (Intermediate Bulk Containers), to increase rotations and also avoid sending empty trucks just to move pallets or IBCs from one location to the other, because they now see where they are.
“There are many other examples of mass deployments in motion around the globe and we are seeing in Australia examples that are even bigger when it comes to volume and scale,” said Loic.
Thinxtra is working closely with service providers in the supply chain who are in the process of deploying hundreds of thousands of connected assets. One example is Konvoy, an asset pooler in the beverage industry, connecting more than 70,000 beer kegs to Thinxtra’s 0G Network in Australia and New Zealand with plans to scale globally
Thinxtra’s partnership with Loscam, Asia Pacific’s largest pallet pooling and returnable packaging solutions company, saw Loscam become first to market with a Track & Trace solution to help partners like ASCAP and their customers to get visibility their returnable packaging assets and IBCs as they move through the supply chain.
Gartner talks about moving beyond the hype around IoT in the supply chain thanks to real cases of large supply chain businesses demonstrating that it’s operationally viable to connect hundreds of thousands of assets in the field, at a price point that justifies the investment and delivers transformative outcomes, namely efficiency increases and cost reductions.
The two success factors for companies deploying IIoT at scale are: operational viability and a business case that stacks up. Let’s look at each individually.
Operationally Viable Solutions
An operationally viable solution is made of three components that need to be fit-for-purpose and deliver an end-to-end solution including
- IoT Device or Sensor to produce the data of a specific use case
- Network Connectivity to deliver the data securely and cost effectively
- Data and Analytics platform that enables you to visualise and make sense of the data
When it comes to devices, Sam said: “There’s a lot of choice out there. You can build your own, you can buy what’s commercially available, but at some stage there will need to be some customization to fit your particular operations.”
Ultimately, the chosen device solution needs to be able to withstand the harsh day-to-day operations in the field.
Some devices are subjected to temperatures as low as -30 degrees, or may have to go through a hot wash at 80-100 degrees, or sit in an old truck where the vibrations would affect the device performance. To be able to scale, the device must be fit-for-purpose.
Mapping of the ‘day-in-the-life-of-your-asset’ has to be done upfront so you don’t have any surprises later.
Connectivity wise, the Thinxtra 0G Network, powered by Sigfox technology is proving to be the right choice for many use cases in the supply chain operations due to its low cost, simplicity and ability to be configured. It allows for long battery life which means the devices and sensors that can connect for a very long time, at a very low cost for many years without the need for maintenance.
For some, this requires a shift in thinking away from ‘the more data the better’. The problem created as a result of that thinking, which we are all conditioned to believe, is that it drives up the cost and complexity in the solution you’re building.
Sam advised against collecting everything, because the key is to know what data you really really need to get the value: “It is crucial to focus on the business problem and not start with ill-informed technology choices.”
Perfecting the business case
There’s no point starting an IoT project if it’s total cost will be higher than the value of the IoT data that is generated.
The three primary areas of of value generation to consider are:
- Reduction in the number of assets you need to service to move the same amount of goods (in some cases up to 30%).
- Reduction of losses that have been stolen or misplaced (often by -10%).
- Enhancement of customer experience as with more visibility, reduces friction in the supply chain – everyone has access to fact based information.
The last one is harder to quantify but may be the most important.
With IoT-enabled assets that can be remotely monitored, you suddenly start to reduce manual processes and data entry inconsistencies, you reduce the amount of billing errors, reduce stocktake and manual counting. Delighting your customers with new insights can also open up new business models and opportunities.
“If you track your assets, you don’t need as much buffer in your supply chain to catch inefficiencies,” said Loic.
Once you compare the cost of IoT data generation with the value this data creates and you can monetise, you can then continue to optimise the balance through an iterative process to see how much more value you’d get if more, or less data was delivered more, or less frequently.
“Get that equation right and you have a business case,” says Loic.
The key takeaway is to be really clear about what data you really need, document it, and expand the volume only at a pace that fits the business case and enables efficiencies.
“Often this means a lot of tweaking as you scale up from 10,000 to 50,000 to 100,000 assets, and there are learnings at every stage,” said Sam.
It’s clear that the hard work upfront to understand operational and data requirements, and getting the right balance before making technology choices, is worth the effort.
Obtaining information insights about your assets location and condition can significantly lift customer value and efficiency, as well as improve your bottom line dramatically.
So, what did we learn?
Accessible, affordable IoT solutions that deliver predictable ROI is about having the right data about the right measurements at the right time.
Understanding the supply chain’s data requirements creates the IoT solution strategy. The business ROI is at the centre.