5 IoT lessons taken from the logistics industry

Want proof that IoT addresses current business cases and generates new use cases? Just look at transportation companies.

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Technology drives business strategy now more than ever—and nowhere is this more apparent than in the logistics industry. As an early IoT adopter, the stories of truck fleet digital transformation are numerous. They include chronicling the adoption of sensor-based technology and analytics to track where trucks are en route, whether they meet deadlines, what road repair and weather conditions look like, and even the safety habits of drivers.

Virtually every industry sector can learn from the success that logistics companies have experienced with IoT and analytics. Below are five business lessons learned from logistics.

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1. Your customers drive the market

Major transportation companies like UPS and FedEx felt pressure during the holiday season to make more deliveries as consumers continued to migrate toward online ordering. These e-commerce consumers expected immediate order satisfaction—and the only way that transporters could achieve this was with the help of mobile technology. GPS-centric applications provided tracking and data information about routes, the ability to reroute vehicles, and the condition of goods on trucks.

In this environment, even a more cautionary CIO can't help a business survive without taking a hard look at IoT and analytics, and the ability to use both for a business transformation.

2. Self-service is big

Businesses must consider self-service options. According to Suneil Sastari, director of product management at SOTI, which provides IoT and mobility solutions, recent survey results show that 73% of consumers favored self-service options, and 64% said they were also very comfortable with new types of shipping methods. "In this environment, transportation companies have to drive down costs, while improving efficiency and reliability," he said.

Using IoT to track goods during transport coupled with IoT sensors' ability to monitor the condition of perishable goods during transport not only achieves efficiency and reliability—but becomes indispensable technologies that deliver quality service, which is now expected by consumers.

3. End-to-end transparency of operations is the new normal

Corporate silos of information can no longer survive in today's rapidly paced business processes. Information silos must breakdown to ensure that everyone operates with a single data source of truth. They must also find ways to create universal visibility of business events as they happen for everyone with a need to know.

IoT provides this. For example, if a driver breaks down in the middle of nowhere in the dead of night, someone at headquarters can see this and dispatch help. If a load of produce is in danger of perishing, sensors can flag environmental irregularities, and a dispatcher can reroute goods to nearby markets. None of this could happen in the pre-sensor analytics world.

"With sensors, you can now detect when a driver is nodding off at the wheel, or the driver can see when vehicle maintenance is needed before the actual maintenance need becomes critical," added Sastari.

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4. New safety and compliance requirements provide new benefits

Safety and compliance requirements might be hard to keep up with as new regulations continue to appear, but they also might provide new benefits.

"We saw this in trucking several years ago, when the government introduced new safety requirements for drivers, and the industry had to hard wire sensors into tricks to monitor the number of hours on the road each driver drove," said Sastari.

Initially, the industry groused, but over time it discovered many new business benefits from sensor-based data collection. Among which was the ability to monitor fuel consumption, driver behavior, and truck locations.

5. IoT and analytics doesn't mean overturning legacy systems

A common complaint across industry sectors is that IoT and analytics don't work well with legacy systems and that it forces costly rip-and-replace data center plans. Not true. In most cases, there are common APIs that can get disparate systems to work together. This enables companies to move forward at the same time that they continue to derive business benefits from their legacy systems.

Closing remarks

Every industry has cost, revenue, performance, and customer satisfaction goals. What we have learned from industries like transportation, an early IoT adopter, is that IoT not only addresses current business cases—it also generates new use cases as companies understand it and its potential.

"Visibility of operational performance is key to IoT's success, as well as keeping a finger on the pulse of customers, "said Sastari. "The businesses that enable their customers will ultimately be the winners—and IoT helps them achieve those wins."

Also see

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Image: vitpho, Getty Images/iStockphoto

By Mary Shacklett

Mary E. Shacklett is president of Transworld Data, a technology research and market development firm. Prior to founding the company, Mary was Senior Vice President of Marketing and Technology at TCCU, Inc., a financial services firm; Vice President o...