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Three Focus Areas for the Logistics Industry in a New Low-Touch World

Binu Jacob
Global IoT Business Lead, TTH and IoT Cloud

The increased emphasis on online ordering and delivering means the logistics industry needs to improve its performance. This article explores three areas where it can enhance its parcel delivery services using IoT and other digital technologies.

Key insights

  • Operational Continuity and why a connected ecosystem help ensure seamless operations of sorting center, logistics warehouse and delivery of goods
  • Staff Safety & Training using digital solutions based on IoT smart tags, devices and cognitive components to ensure social distancing and other safety measures
  • Customer Support via a pervasive and seamless data flow to address dynamic customer needs and service demands and manage customer service requests responsively

New opportunities for the logistics industry 

Many sectors and entire national economies have been negatively impacted from the global pandemic. In North America alone, analysts are forecasting a 45% dip in revenue for the rest of 2020, with losses predicted to be near $650B.

The surprise silver lining during this unforeseen event appears to be in the delivery and logistics industry and the Internet of Things (IoT). Closed stores and quarantines mean online sales have risen considerably, with Walmart alone experiencing a 74% increase in their online sales in the US. Postal companies across the board are challenged to meet the uptake and deadline in their parcel delivery services. Although mail volumes have come down drastically, handling increased parcel volumes under tight deadlines remains challenging.

Let’s take a closer look at the areas impacted by the pandemic in the logistics industry. The industry needs to focus on ensuring excellence in the following areas:

  • Employee safety
  • Service continuity 
  • Peak demand
  • Increased tracking
  • Perishable goods
  • Last mile delivery
  • Process roadblocks 

When you look at mitigating the current challenges in the logistics and postal space, digital technologies that leverage big data, IoT, robotics, and automation can make a significant impact in these three intervention areas:

  • Operational Continuity. A connected ecosystem leading up to a digital twin-based enterprise ensures seamless operation of the sorting center, logistics warehouse and delivery of goods with minimal disruptions
  • Staff Safety & Training. Digital solutions based on smart tags, devices and cognitive components ensure worker social distancing on and off premises; they also enable remote working and the ability to monitor/govern employee activities, cross-train workers and ensure worker retention
  • Customer Support.  A pervasive and seamless data flow will address dynamic customer needs and service demands, disseminate relevant information via conventional and digital channels, and give the ability to triage and manage customer service requests responsively

Ensure operational continuity with Automation, AI and the IoT

Logistics and delivery support providers have been able to manage the current situation but not without challenges. Unlike traditional providers, early adopters of digital technologies like IoT, big data and AI are well positioned to make the right decision at the right time in any environment. Specifically, they can make accurate data-driven decisions that enable appropriate staffing/right-sized fleet deployment, reductions in operational costs and wastage, accurate route planning and better assets utilization.

Moving forward post-pandemic, we predict those digitally evolved companies will continue to fare better than competitors who are slower in their digital journey. Digital technologies allow for a foundation of a connected and boundary-less data interexchange. Once this is achieved in the enterprise, it is possible to create a digital twin that reflects the dynamic, evolving state of the business. This digital representation gives decision makers the ability to know not only the current state of the enterprise but also the future state, based on historical business decisions. For example, the digital twin lets CXOs view current decisions and predict the impact of those decisions (based on various elements like operations, staffing/capacity, customer and cost to the enterprise). This data-driven view gives business leaders multiple options to make the right decision, fluidly adjust and avoiding costly field trials and losses, all of which is especially invaluable during times of uncertainty.

Robotics and automatic guided vehicles will play a more important role in ensuring operational continuity, by reducing human density and risk. Fully autonomous operations will minimize human intervention and further increase safety. Track & trace, video and image-based solutions in parcel distribution and sorting centers will augment existing automation in these areas.

How one company is using IoT to improve supply chain logistics

Here’s a real-world example: A company in Belgium is looking to increase camera-based monitoring to reduce the response time to jammed chutes. Currently each blockage is causing 15 to 45 minutes of stoppage in sorting due to manual intervention in identifying and fixing the issue. A cognitive digital solution will help improve sorting center efficiency, with chute jams expected to be reduced by 70%. This enhances output, reduces cost as more parcels are sorted and moved out for delivery faster, and ultimately, creating a delighted customer. See a sample automated sorting center below.

Enable Staff Safety & Training

For every organization, the first priority should be the safety and health of their employees. With COVID-19, protocols are changing to prevent contagion in the workplace and in areas where employees connect with customers and other stakeholders. These new protocols can be enabled by deploying thermal cameras (integrated with mobile) at entry points to enforce social distancing. Also, for contactless shift turnovers, mobility solutions integrated with intelligent cameras enable remote data sharing and monitoring. With thermal scanners no personal information is captured, so they are GDPR-compliant; any personally identified information with intelligent cameras is masked. An existing command center can be enhanced to route this information to monitor and enforce COVID-19 regulations centrally, thereby ensuring safety and business continuity.

We will also see last mile delivery to smart parcel locker systems becoming safer and a more acceptable norm. A similar pick-up process further prevents human interaction. As a result, the pick-up and drop-off (PUDO) points are easier to sanitize and are smarter with near field communication (NFC) and app-related systems to open lockers, ensuring completely contact-less parcel handling. A smart locker ecosystem enables real-time decision making about when to pick up, drop and maintain the system. This reduction in trips to PUDO points reduces cost while increasing safety.  A sample smart contact-less locker system is shown below.

Enhance customer service

Customers are looking to reduce the risk of sending and receiving parcels and want transparency on shipment status and in-time delivery. This new customer expectation will require postal and delivery organizations to become more agile and embrace a new way of doing business as described earlier, via smart lockers, innovative delivery practices and real-time data dissemination. Seamless data interexchange is the key enabler for better customer service across the value chain. Customers are demanding real-time shipment condition monitoring using remote condition monitoring of shipments through sensors, gateways and other IoT-related solutions. In fact, this scenario is already implemented in one of the world’s largest logistics providers. The company uses its real-time data to create a new business model by allowing third-party shippers to access shipment condition status in real time and then pass the status information on to their customers. A business-aligned digital remote command center, on that monitors and maintains the entire value chain, will soon be a best practice for providers.  In the future, this business model will continue to evolve to enable accurate shipment monitoring and pervasive data availability (including data from third-party partners) for real-time decision making. When you create a command center and combine it with the digital twin view of the business, you create a digitally enabled, data-driven enterprise that delivers not only packages but an excellent experience.

Bringing “life to things” for the logistics industry

The logistics and freight industry has a critical part to play in this COVID-19 impacted environment and must evolve and reinvent itself to maintain enhanced customer experience with employee safety entrenched in their business model. This era presents new possibilities for the industry to invest in modern digital solutions to create a connected, autonomous, intelligent ecosystem that enables seamless, contactless and efficient services for internal and external stakeholders.


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