The internet of things will deliver a $1.9 trillion boost to supply chain and logistics operations, according to a report by DHL and Cisco Consulting Services. “We believe the Internet of Things will be a primary enabler of a global transformation,” said DHL’s Ken Allen.
The report estimates that there will be 50 billion devices connected to the Internet by 2020 compared to 15 billion today and examines the potential impact this will have on business.
The value at stake, combination of increased revenues and lower costs that is created or will migrate among companies and industries when new connections are made, reveals the huge potential when the Internet and networks expand their connections to warehousing, freight transport and other elements of the supply chain.
For any organisation with a supply chain or logistics operations, the internet of things (IoT) will have game-changing consequences, from creating more ‘last mile’ delivery options for customers, to more efficient warehousing operations and freight transport.
Cisco calculates that the IoT will generate $8 trillion worldwide in value at stake over the next decade. This will come from five primary drivers:
- Innovation and revenue – $2.1 trillion (£1.42 trillion)
- Asset utilization – $2.1 trillion £1.42 trillion)
- Supply chain and logistics – $1.9 trillion (£1.3 trillion)
- Employee productivity improvements – $1.2 trillion (£811 billion)
- Enhanced customer and citizen experience -$700 billion (£473 billion)
Ken Allen, CEO of DHL Express and board sponsor technology, said: “At Deutsche Post DHL Group we have a deeply held belief in the positive powers of global trade. Yet, as our Global Connectedness Index 2014 revealed, the overall level of global connectedness remains surprisingly limited. There is huge potential for countries to further increase their connectedness and prosper through trade, integration and technology. We believe the Internet of Things will be a primary enabler of this global transformation.”
The report suggest that over the next decade, the logistics industry could unlock higher levels of operational efficiency as the IoT connects in real time millions of shipments being moved, tracked and stowed each day.
“In warehousing, connected pallets and items will be a driver for smarter inventory management. In freight transport, tracking and tracing of goods becomes faster, more accurate, predictive and secure while analytics of a connected fleet can help to predict asset failure and to schedule maintenance checks automatically.
“Finally, connecting delivery personnel with surrounding vehicles and people can become a way of monetizing and optimizing the return trip to improve efficiency and service in last mile delivery.”
Cisco Consulting Services and DHL are collaborating on a joint IoT innovation project to improve decision-making in the warehouse operations through near real-time data analytics based on Wi-Fi location data of selected devices.
Click here to for a copy of “Internet of Things in Logistics”