APPLICATIONS OF THE INTERNET OF THINGS IN LOGISTICS AND SUPPLY

CHAIN MANAGEMENT
In 2015, DHL (delivery company) and Cisco (tech company) estimated that IoT technology
asset tracking solutions could have an impact of more than $1.9 trillion in the logistics and
supply chain sector, making it one of the most important trends in the modern world
[CITATION And20 \l 3082 ].

There are many applications of the Internet of Things in logistics and supply chain
management. According to Mohamed Ben-Daya, Elkafi Hassini and Zied Bahroun in their
article Internet of things and supply chain management: a literature review [ CITATION
Moh17 \l 3082 ], IoT has different capabilities that can aid supply chain management, such
as cost-saving in any part of the company, inventory accuracy and product tracking. These
aspects can help companies in such ways that they can become more competitive, more
profitable and safer. These aspects or benefits can impact the whole logistic value chain and
supply chain including warehouse operations, freight transportation and last-mile delivery
in terms of industrial processes, but it can also impact safety and security measures, such as
equipment and employee monitoring, and health monitoring. [ CITATION Jam15 \l 3082 ]. In
this paper, DHL’s and Cisco’s article Internet of things in logistics is going to be the
reference for the real-life applications.

In the past, companies used to use closed operational technology, but thanks to
globalization and the evolution in technology, companies and industry in general are using
open IP standards, which heavily impacts in interoperability, manageability, connectivity
and security. In terms of warehouse operations, IoT enables CEOs, managers, directors and
staff to know and understand what is happening at any given moment in the production
floor and warehouse. Energy consumption in general and per machine, status of inventory,
performance and environmental conditions are some of the examples of what can be
tracked and analyzed through IoT. If a physical asset of the company is failing to do its
appropriate work, a sensor can alert the floor manager in order to make arrangements and
adapt to the situation, helping the company to continue with production if possible and save
the company from unnecessary expenses.
In DHL, the use of Radio Frequency Identification (RFID) devices has become an everyday
thing. At the moment in which a pallet arrives at the warehouse, a wireless reader gets all
the relevant data and sends it to the person in charge at the time. This eliminates the time
wasting task of manually retrieving the data form every pallet. After the pallets are placed
in their right location, different tags can provide real-time visibility to the managers; and, if
an item is misplaced, a sensor can alert that manager of the situation. Sensors are also
constantly monitoring temperature and humidity levels to know when they are stable or
compromised and help prevent damaging good and accidents.
Leaving goods aside, IoT in DHL is also available for optimal asset utilization. Machinery,
in-house transport, employees and managers are all connected for optimal use. Forklifts are
combined with sensors that can help make an indoor GPS trail of every item, helping the
forklift driver or any other employee to easily track and find each item; it also tracks who is
driving, speed and other relevant data. Connected assets also helps in the predictive
maintenance programs of the delivery company. Real-time tracking of machinery enables
the manager to make decisions as to when to intervene a machine.
IoT is also heavily used in freight transportation in industry. Vehicle infrastructure is one of
the aspects companies research the most and make a lot of investments in improving its
efficiency. The arrival of IoT in transportation has enabled companies to track and manage
many conditions in terms of the driver, means of transport, ambient factors and waste
management. Right now, different technological advancements allow companies to track
different and very specific aspects in transportations. Managers, technicians and operators
are able to track location, vehicle id and status, temperature, humidity, weight, shock events
and damage and ETA. All of these aspects provide information to managers to help them
make decisions, talk to costumers and their bosses, also they enable managers to make
preventive measures, predictive asset lifecycle management and save the company money,
time and assets.
It is very rare for a company to have their own, stand-alone solutions for connectivity or
IoT technologies. Normally, new platforms need to be created by experts in IT that
combine various existing hardware and software. However, DHL has its own technological
advancement in this area, it’s called the SmartSensor. This sensor offers a full-condition
monitoring, including temperature, humidity, shock and light events and container status.

Last-mile delivery is the final step of the process in a product’s journey from warehouse
shelf to the customer. This is the most expensive and time consuming part of the logistic
process and also a key to success in customer satisfaction. From the total shipping cost,
last-mile delivery represents 53% of the whole process [ CITATION She18 \l 3082 ]. IoT its
paving its way into last-mile delivery services in a way in which it can help manage
catastrophic events for a company. End-to-end supply chain risk management is one of the
ways IoT is becoming very useful. This types of platforms helps any kind of company to
track different aspects of global events, such as natural disasters, conflicts, economic
uncertainty, market volatility and sociopolitical unrest. Tracking these threats can aide in a
company’s strategy in transportation and last-mile delivery, especially in globalized
companies that reach many different countries around the world. Also, platforms can track
port strikes, airport and highway closures to analyze, predict and respond to these
situations. Postybell is a company that created a sensor for mailboxes that detects when
mail has been placed in or when its empty, helping shipping companies save time and
optimize daily collection routes.
DHL has its own tracking platform called Resilience360. This platform checks day-to-day
data from around the world to mitigate risks in transportation. If a risk is detected, it
automatically sends a signal to the person in charge of the cargo in that part of the world
and suggest different decisions, for example changing an air route to a road route due to
airline strike or airport closure.

Finally, health monitoring is also a big part of the IoT use. One would not think of health as
being pivotal part in logistics and supply chain management, but people are still a very
important asset. IoT can help companies monitor its employees’ health and prevent
industrial accidents and disturbances in the supply chain. Managers in any area can monitor
these aspects and decide whether or not an employee needs help, has fatigue, or any other
aspect in a person’s health at work. This type of applications can also help companies in
chronic disease management, which implies a big problem in terms of HR management and
generates a lot of disturbances in logistics and in the supply chain.
References
Ben-Daya, M., Hassini, E., & Bahroun, Z. (2017). Internet of things and supply chain
management: a literature review. Industrial Engineering Department, American
University of Sharjah, Sharjah, United Arab Emirates.
Dolan, S. (May 10, 2018). The challenges of last mile delivery logistics & the technology
solutions cutting costs. Obtained from Business Insider:
https://www.businessinsider.com/last-mile-delivery-shipping-explained
Macaulay, J., Buckalew, L., & Chung, G. (2015). Internet of Things in Logistics. Troisdorf,
Germany: DHL Trend Research; Cisco Consulting Service.
Meola, A. (January 14, 2020). How AI and IoT devices will revolutionize supply chain
logistics and management. Obtained from Business Insider:
https://www.businessinsider.com/iot-supply-chain-management-logistics