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How logistics companies can take advantage of IoT today: Study

The U.S. Postal Service, UPS and FedEx combined will ship more than 2 billion packages during the holiday gift-giving season, according to various estimates. Nearly all of those packages will show up when and where they’re supposed to with the right order in it. I say “nearly all” packages because while 99.7% order-fulfillment accuracy may sound good, even a 0.3 percent picking rate error leads to more than 6 million mis-shipments.

Order-fulfillment processes in retail stores and warehouses are designed to meet a single objective: shipping large orders of identical items in volume, typically on pallets or in containers to a few destinations. But as e-commerce rapidly expands, these legacy systems are straining to keep up as they try to orchestrate fulfillment, where a far greater number of small orders of different items in small lots or packages is shipped to individual consumers. Indeed, just 6% of shippers believe they’ve achieved end-to-end supply chain visibility.

To shrink this error rate, companies are using IoT to find efficiencies while delivering an ever faster, personalized service to each customer.

A Forrester survey found more than 60% of respondents believe their IoT investments have or will fundamentally change their business models. More than half are already are seeing improvements in operational efficiency. Additionally, Gartner estimated that enterprises will allocate 20% of enterprise digital transformation costs to the supply chain and that “visibility or event management applications” are a top priority.

Reducing friction

Zebra Technologies is just one of the many companies working to erase the friction to bring end-to-end chain visibility with IoT. Zebra technologies include ruggedized mobile devices, barcode printers and RFID readers. This is a fundamental leap forward in technology: Prior to e-commerce, warehouse and retail workers were given printouts of tasks assigned to them to fulfill during their shift. Fortune 500 companies have realized this system cannot scale in an omnichannel world.

To make the process more efficient, warehouse employees now carry ruggedized Zebra mobile devices that let them pick, pack, scan and print new barcodes and ship to fulfill individual orders, while also enabling mangers to track a worker’s progress and location. No longer restricted to pulling just what was on their order lists at the start of their shifts, retail and warehouse workers can now have their tasks updated in real time based on their location. For example, if an online order for shipping a new sweater overnight is received, an IoT-connected system could locate the worker closest to the sweater’s location and update his task list to make picking and shipping that sweater his next task.

To maintain an efficient warehouse order flow, it’s imperative that workers’ mobile devices perform flawlessly during their shifts. Time is money, and if a device’s battery expires or the portable printer runs out of ink or paper, the worker must stop her order fulfillment to get the device replenished so work can continue. To prevent this, Zebra’s Asset Visibility application allows store managers and support staff to monitor a mobile device’s power levels, supply and other functions that need to stay active to keep a worker productive and replace faulty devices between shifts so workers arriving for the next shift have a device that’s ready to go. During busy days, when ruggedized mobile devices are often misplaced, Zebra’s Savanna platform enables the operations staff to find and retrieve them quickly.

With the improved operational visibility that comes from connecting their retail stores and warehouses using IoT techniques, Zebra customers are finding new and innovative ways to transform operations, learn more about their businesses and customers, and empower their workers to be more productive.

Tapping into the data

In another example, Shiseido, the world’s third-largest cosmetics company, uses an IoT platform to ingest, integrate, store, prepare and then discover vast amounts of data, including loyalty membership data, second-party data such as media website viewing data, and third-party public data management platform information.

This approach improved Shiseido’s CRM engagement and ad performance, gave its teams improved data analysis and visualization, and delivered a 20% increase in revenue from loyalty members. This led to an 11% increase in overall revenue.

These are just two interesting examples of the ways in which companies in the supply chain are using IoT systems to improve their business and their customers’ experience. Challenges remain, of course, and technology providers continue to relentlessly pursue solutions for customers.

In my conversations with customers in the logistics world, including retailers, transportation and third-party logistics, they know there’s enormous value in embracing IoT and using the vast amounts of untapped data that await them to transform their business. But they are daunted by where to begin. They know they want technologies that are flexible and scalable, secure and efficient, but they have little patience for navigating a dense forest of options to stitch together an IoT system for themselves. In short, they’re looking for packaged systems and platforms that can speed their time-to-data-insight. And they want to understand the ROI for their business.

Logistics landscape: Challenges and opportunities

A new report from SJ Consulting describes the current challenges and potential approaches that companies in the logistics and asset-tracking world — such as JD.com, CVS, FedEx and DHL — consider as they look to use IoT data to improve their operations.

You can download the study here. In it, you’ll find:

  • Analysis of how the retail, technology, transportation and logistics industries are merging in response to Amazon;
  • Details on new competitive threats industry incumbents are facing;
  • Insight on the strategic partnerships industry players are forming to compete with Amazon;
  • Industry- and category-specific predictions for how companies will remain competitive;
  • Analysis of how retailers are adopting IoT-enabled omnichannel marketing strategies; and
  • How retailers are adopting AI and machine learning to optimize inventory planning and merchandizing.

IoT is prompting companies to think about how to disrupt themselves, to rethink the processes and technologies that have served them well for years before their competitors do it for them.

We believe that by 2035 there will be a trillion connected devices delivering orders of magnitude more data than we see today. And we’re at the cusp of delivering complete systems that will enable that. I’d love to hear about your experiences with IoT and how we might work together to help you achieve your IoT data visions.

All IoT Agenda network contributors are responsible for the content and accuracy of their posts. Opinions are of the writers and do not necessarily convey the thoughts of IoT Agenda.

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