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Two technology giants have joined with three logistics service providers (LSPs) in a partnership that aims to cure the age-old problem of inadequate shipment visibility across the supply chain.
It all started with Intel Corp. And, as is so often the case, the solution was originally developed to tackle an internal problem.
Chet Hullum is general manager of industrial solutions with Intel’s Internet of Things Group. His team began working with the company’s global supply management side to improve tracking and tracing between Intel and suppliers of high-value products.
“The idea was to improve visibility, and dynamically be able to get data from packages during shipment,” recalls Hullum. “We needed real-time alerts when things were damaged, open, stolen or tilted.”
That last problem is especially critical to machines that can easily suffer damage or become miscalibrated by shock or mishandling. “It’s important that the equipment arrive in pristine condition,” says Hullum.
Intel quickly realized that the system it was developing could be scaled up and offered to other companies as well, particularly LSPs. They and their customers were crying out for a better way to monitor the movement of sensitive goods throughout the chain. According to a 2015 report by contract manufacturer Jabil Inc., some 89 percent of LSPs cite lack of visibility into shipment status as among their biggest challenges. As much as 30 percent of perishable goods spoil before reaching their destination, costing shippers an estimated $60bn last in cargo losses last year.
Intel approached Honeywell International Inc. to help it build out the solution. Intel would contribute the silicon hardware and sensors that feed into a mobile gateway placed inside a truck or shipping container. The information is then transmitted via cellular or Wi-Fi networks to a cloud-based command-and-control platform. The proprietary network within Intel’s Connected Logistics Platform (Intel CLP) allows sensors to communicate with one another, as well as with the larger network.
Honeywell is marketing the technology, including the Intel sensor tags that are attached to packages or individual items, as part of its Connected Freight solution. The system gives companies the ability to monitor shipments of high-value perishable goods. It’s intended to provide real-time information on the location and condition of freight in transit.
Honeywell has long been focused on supply-chain tracking and tracing, but was convinced of the necessity for the new system after talking to a number of LSPs, says Sameer Agrawal, vice president of connected supply-chain solutions. In the end, Honeywell and Intel developed the technology in partnership with three logistics providers: DHL, Kuehne & Nagel International AG and Expeditors International of Washington Inc.
The LSPs were brought in to apply the technology in real-world situations. They provided “the huge experience of running it through actual physical shipments,” says Agrawal. Their input helped Honeywell to decide how alerts should be conveyed within specific verticals that deal with high-value goods.
In the process, he says, the technology allowed the LSPs “to provide a new level of service to customers.” As for underlying shippers, they could benefit from steep reductions in shipment losses and insurance premiums.
The precise application of the technology depends on the needs of each LSP and its customers. Alerts can be keyed to any number of factors, including temperature, shock, tilt, humidity and intrusion detection. “It’s not for me to talk with the end user about the best route you should take,” says Hullum. “That would be [a provider like] DHL.”
Kuehne & Nagel chief information officer Martin Kolbe says the provider opted to partner with Intel and Honeywell to achieve “total transparency of stock location, condition and integrity … underpinned by standards that are open and interoperable.”
Over the years, the technology for achieving supply-chain visibility has been deployed in three general categories of progressive sophistication, Agrawal says: visual indicators, which signal when something about a shipment goes awry but don’t proactively notify anyone of the problem; data loggers, which generally record only a single parameter and require manual effort to enter the information into a computer; and the Internet of Things, which generates far greater amounts of critical data than ever before for determining shipment status. But even IoT technology can be expensive to apply when shippers are seeking visibility of multiple pallets.
A Deeper Application
Honeywell’s Connected Freight offering, incorporating the Intel technology, makes it possible to scale the tracking process to cover a large number of shipments, while providing granular information on each one. But the partners behind the system view it as more than a means of keeping track of items in transit. It was also designed to enable a quick response to any problem, including the rerouting of shipments in line with a sudden shift in demand, or interception of a damaged shipment.
“By analyzing data from thousands of suppliers, logistics service providers will be able to predict and avoid routes where damage or delays are likely, establishing a more reliable distribution network,” Agrawal says.
As of July, Honeywell was taking orders for the new technology and preparing for its wide-scale deployment by the three LSP partners. Agrawal envisions a 36-month “road map” for improving various aspects of the system, including the types of assets and shipments that can be monitored. Initially, the partners are focusing on goods with high value or steep costs resulting from shipment damage or disruption. As they proceed, they intend to broaden its application to cover lower-value goods.
Beyond that, the developers want to ensure that the accumulated data can be used for intensive analytics by LSPs and their customers. And they’re looking to extend the technology’s use from trailers and ocean containers to pallets, forklifts and other types of equipment.” As the technology develops further,” says Agrawal, “architectures can be enhanced. It’s all about reducing transitional friction.”
Kolbe says Kuehne & Nagel hopes to encourage other manufacturers to introduce similar products to the market, and continue evolving the appropriate standards and frameworks. “It is only through this process that the technology becomes cost-effective enough for mass-market use,” he says.
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