Supply Chain Expertise and Technology Blog by TMC, a division of C.H. Robinson

Supply Chain IoT Unlocks Efficiency and Transparency

In a Connect post published almost two years ago (“Connecting into the Future of TMS Technology”), I described the impact of the Internet of Things (IoT) as “one of the most exciting chapters in the development of TMS technology.”

How have IoT logistics applications evolved since then?

Not surprisingly, the industry’s IoT connections have proliferated. But perhaps most exciting of all is how this vast infrastructure of sensors is unlocking extremely powerful analytical capabilities that create more efficient and transparent supply chains.

Monitoring IoT advancements

Technology analysis firm International Data Corporation estimates that worldwide spending on IoT will experience a compound annual growth rate of 15.6% over the 2015-2020 period, reaching $1.29 trillion in 2020. Among the industries forecast to make the largest IoT investments in 2016, transportation comes in second ($78 billion). Moreover, freight monitoring drives much of this spending, says IDC, accounting for an estimated $55.9 billion of the industry’s investments.

A key application area I described in my last IoT post was the use of sensors on trucks to track the status of perishable cargos. The use of location data transmitted by truck-mounted sensors to keep tabs on shipments was another important application cited in the post.

These applications are still important, but they have become even more effective, with more devices—such as smartphones and tablets—connected to information networks. A Pew Research report from earlier this year found that more than three-quarters of Americans now use a smartphone. That’s a 9% increase since my last post in 2015, and it includes a 16% increase in the 50-64 age group. That demographic makes up nearly 50% of all truck drivers in the United States.

In addition to there being more smart devices and sensors embedded in supply chains today, the technology inside these units has advanced. For example, a year or two ago, drivers could enter their locations on mobile devices. Now, shippers and third party providers can activate and automatically pinpoint where these devices are—without human input—greatly streamlining location tracking and improving accuracy. The tracking information is now more wide-ranging, in terms of geographic and modal scope.

Bigger benefits ahead
More detailed information on the status of shipments translates into improved supply chain visibility and risk management. Back in 2015, I said the ability for a TMS to act as a data hub would be one of the technology’s major benefits. This is an area that TMC has focused on recently.

TMC is working with one of our customers to aggregate data from a dozen partners in their supply chain for single source of visibility. Once fully integrated, TMC will be able to provide a holistic view of the client’s entire supply chain. The end goal is that supply chain modeling exercises will unlock savings opportunities for the entire supply network.

To support our customers in risk management, we are using data sourced from IoT networks to analyze the likelihood of supply chain disruptions across the globe. Regardless of whether the shipment is a parcel package being delivered residentially or it’s a 40-foot container floating across the Pacific, the IoT allows us to answer the questions: Which shipments are in danger of being delayed owing to specific problems such as customs delays or weather issues? Or which ones should shippers flag because these shipments have failed to pass key operational milestones?

Reactive to predictive
Last week, Jordan Kass discussed the future of “smart logistics” platforms creating a new era of supply chain control, visibility, and responsiveness. Looking ahead, IoT-enabled supply chain management will enable the industry to become more proactive and predictive—rather than primarily reactive as is currently the case. For example, we will be able to analyze the risk profiles of specific freight corridors, determine where supply shortages might exist before they happen, and advise shippers on how to avoid future problems.

TMS applications of IoT technology have come a long way over the last two years or so—but the best is yet to come.