The logistics industry has been using internet technology for two decades to answer the question "where's my stuff?” with varying degrees of success. But it is now possible and affordable to attain much more information, including: "What happened to my stuff through the supply chain journey?" The Internet of Things (IoT) makes this not only possible, but extends the range of freight-tracking into the level of individual items as never before. The potential benefits are astonishing, and new IoT technologies now put this well within reach.
Most assets or items of freight do not normally need to convey a lot of information or large volumes of data. The monitoring of elements such as temperature, moisture, movement, and other factors actually require only very small packets of data. One factor limiting the transmission of this type of modest but highly valuable information is the cost of traditional connectivity such as Bluetooth or RFID. Both require companies to build the infrastructure necessary for communication, making it a costly investment to access this type of information. Cellular provides a wide area network solution but is costly in terms of power and dollars. The emergence of Low Power Wide Area Networks (LPWAN) is enabling the affordable transmission of small, valuable data, since the network is designed to send and receive relatively small bits of information, such as on/off or empty/full, hot/cold, etc.
The potential savings are huge. The cost of a full cellular-based IoT modem and one device is $30 to $40, with additional ongoing charges for “fat” pipe connectivity around $10 per month, per tag. RFID is cheaper, with an RFID tag in the $0.50 range, but the infrastructure required to read those tags as they enter and leave a warehouse by the millions, for example, can be $5K to $50K per building. Compare this to typical LPWAN IoT connectivity, with modems at $3 per piece, and likely to drop down to $0.50 or less with volume, and connectivity costing $1 - $5 per year (it will drop from there), providing a company with an entirely different proposition. Essentially, with LPWAN IoT connectivity, you get a longer range of coverage than with cellular, at a price that’s better than RFID, which has limited range. Another huge upside is that, because so little power is needed to transmit these smaller amounts of data, battery life in the devices can run as long as 12 years. In fact, the device spends most of its life asleep, and simply wakes up when it has a message to transmit before going back to sleep again. Cellular technology, by contrast, requires more expensive and power-hungry end devices.
We’re talking about the lowest-cost, lowest-power consumption end of the IoT range of connectivity. This is a whole different way to think of wireless technology. LPWAN is not the IoT network designed to watch your security cameras from your smartphone or control a self-driving truck, via a series of devices all piggy-backed onto one another for high-volume, wireless data. This is a network designed specifically for byte-sized IoT data, with the power to revolutionize the business of keeping track of a million moving pieces of freight.
The revolution is happening because silicon is cheap, cloud computing is cheap, and data analysis and visualization in the cloud is cheap, too. Take, for example, a shipping pallet, which costs maybe $25. This pallet is subject to a hard life — it gets thrown around, damaged, and lost with tiresome regularity, so you don’t want to embed a $20 tracking device in one. But it would be really great to know where any given pallet was, and furthermore what happened to the contents on the pallet during shipping. At $3 per chip or less, monitoring that individual pallet becomes possible. The same goes with the millions of physical elements in the supply chain you’d love to keep an eye on, but couldn’t afford to before now. For all those objects, it never made sense to connect to the internet — due to power requirements, or expense, or both — and they can get connected now. You’ll be able to track individual trays of food, not just the pallets; or the size 7 sneakers in the container, not just the whole container. The possibilities for massively improved supply chain efficiencies are exciting!
The big players in connectivity, such as the big cellular companies claim they’re in this space, but their core business is phone and web traffic, and their networks are designed for high-volume data rates. LPWAN IoT connectivity is designed from the ground up to be thin, trim, and low-cost. And LPWAN connectivity providers, like Sigfox, offer not just the network, but an ecosystem of partners to deliver everything else — the chips, the devices and the cloud platforms.
What is this going to mean for logistics managers? In the long run, it will mean not just greater visibility, but greater control. Currently, tracking means you only know when an item has passed through a pinch point — entering a depot, leaving a port terminal, logged in at a distribution center, and so on. Further, the cargo owner doesn’t get to choose what those pinch points are — the service provider does that. Meanwhile, you have no idea what’s happening between Point A and Point B. In the future, you’ll be able to put a tracking chip on anything — every package will have a transmitter; every package will be smart. Beyond that, you will get to select which data points you want to focus on, and they will be about a great deal more than location. You will be able to monitor a huge range of criteria, as you wish — temperature, fullness, physical shock, working/not working… what happened to your stuff, not just where it is.
Naturally, this raises concerns about the sheer amount of data that that will become available in the supply chain. Many supply chain managers are already struggling to stay afloat in the rushing river of information coming their way about freight movements. This is where sophisticated, cutting-edge data analytics tools are crucial. But imagine this; the ability to monetize the data you control by packaging it up in a way that’s useful to someone upstream or downstream in your supply chain. Returning to the pallet example, you will be able to send the tracking data into the cloud for analysis, then on to the end-customer — a consumer packaged goods company, the retailer, a 3PL, whoever — delivering useful, actionable business intelligence. Those customers can see the flow of product in a way previously obscure to them. In an old-fashioned tracking scenario, a CPG manufacturer might have a good idea of the retailer they sold product to, but know little about how those goods got dispersed at the pallet or case level. LPWAN IoT connectivity offers a valuable opportunity to get a much more detailed look at what happened to products in transit, and how they got to where they ended up.
We’re just at the beginning of this exciting development, and it will challenge human imagination to the limit to figure out what we can achieve with it. Going forward, just about everything will be connected, even things we haven’t thought about before. One unusual example is a conference facility that needs to track their chairs. The facility has thousands of chairs, and need them in a multitude of configurations and locations within the facility grounds. It’s important for the facility team to know where the chairs are so they can determine how they can efficiently get them to where they need to be, as well as how many people will be needed to move them. The traditional method to track the chairs was to send someone out to count them and make an estimate of required labor. Now, all that information can be tracked in the cloud, in real time.
The future is going to be full of IoT-enabled objects. It may be hard to imagine, but consider the mobile phone phenomenon. In only a few decades, we’ve reached 9 billion subscriptions; more than the number of people in the world! There are a lot more than 9 billion objects or machines in the world that could usefully send information about themselves, so the numbers are quite staggering. The supply chain industry has an opportunity to shine as not only an early adopter of IoT technology, but a super-adaptive adopter of LPWAN. Be smart, get ahead of the pack and embrace the possibilities of this technology today.
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