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Dealing with inefficiencies: How data-driven logistics enables seamless operations

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It's a world of "eat or be eaten" - a highly competitive business world almost reminiscent of Mad Max Thunderdome. Everyone is standing on tiptoes, waiting and doing their best to integrate the latest technology, the latest practices and the latest BIG THING into their systems and operating parameters. And right now, integrating data analytics into logistics has proven to be a critical strategy for gaining a competitive advantage.

The aim of this article is to demonstrate the transformative potential of using data in logistics processes. We dive deep into the issues, the challenges and the statistics. In the modern world, companies are increasingly looking to IoT solutions for data analytics in transportation to strengthen their supply chain - to increase their visibility, boost their operational efficiency at all logistical stages and conserve valuable resources. In part, these goals are achieved by collecting big data.

Above all, actionable information and logistics for all processes in the supply chain. And how is this done? By using IoT devices and transforming them into business intelligence tools. Our goal is to explore how IoT in transportation creates a continuous flow of valuable information that enables companies to extract maximum value from big data.

logistic manager and dock worker under discussion

The central role of data in revolutionizing logistics processes

To properly assess the importance of data in logistics, you need to understand how it is revolutionizing operations. What is happening at the core and why? Everything is "smart" these days - not just your phone and your watch, but also your toaster, your fridge and pretty much anything with a chip and an internet connection.

All these devices collect and transmit data to a control system or platform. And this platform extracts valuable, action-relevant information from this data - it establishes correlations, links bits and draws conclusions.

Today, data analytics enable companies to make informed decisions, optimize processes and increase overall efficiency. According to one report, companies that use data-driven insights in their supply chains can improve their operating margins by up to 25%. This is at the heart of modern logistics, bridging the gap between planning and execution.

It is the direction in which business is moving - and one of the biggest drivers of change of all. The fact that we collect large amounts of data and can now analyze and ultimately use it.

The convergence of IoT and logistics data

At the heart of this logistics revolution is the convergence of IoT and logistics data. IoT Devices collect and transmit real-time data, which changes our perception and management of logistics processes. This synergy between the physical and digital space is reshaping logistics.

Just a few years ago, we simply collected data. Massively. The problem was that we didn't have the tools and systems in place to filter and search through all this data. We knew it was an investment on our part, that it would bear fruit sooner or later - we just didn't know when.

Now we have finally reached the point where processing speed, algorithms and AI allow us to use everything we have collected and create action plans based on this data.

How is IoT changing the way we collect and analyze "logistics data"?

IoT-Devices are attached to parcels, containers or freight containers and collect information about their location and characteristics. This data is then transmitted to a cloud application via GPS or mobile networks. This real-time visibility ensures that freight can be monitored remotely at any time - and enables rapid problem resolution or avoidance, among many other possibilities.

There are millions of ways in which IoT platforms can process data and reshape our supply chain. There are millions of ways in which IoT platforms can process data and reshape our supply chain.

Port shipping personnel manager who works in logistics with a laptop

The advantages of IoT-supported data-driven logistics

Predictive analysis

With data generated by IoT , predictive analysis becomes a reality. Logistics companies can anticipate maintenance needs, fluctuations in demand and potential disruptions, allowing them to take proactive measures. Take the king of the supply chain, Amazon, for example - Jeff Bezos' company was able to reduce packaging waste by 33 percent and save an estimated 450 million US dollars in 2019 by using predictive analytics. This was made possible by IoT devices.

Route optimization

Real-time tracking and analysis enable dynamic route optimization, reducing transit times, fuel consumption and environmental impact. It ensures that goods reach their destination efficiently. Most companies that use IoT devices and corresponding data analysis platforms for route optimization report that they have been able to reduce their fuel consumption by 10 %. And thus also the total greenhouse gas emissions in the logistics sector.

Inventory management

We emphasize the importance of accurate inventory tracking, which enables companies to maintain optimal stock levels, reduce inventory costs and avoid stock-outs or overstocking. A recent study has shown that companies using modern inventory management technologies can reduce their storage costs by an average of 20% while improving their service.

Cost reduction

The costs associated with manual processes and errors are significantly reduced through automation and IoT-enabled devices. Research by Capgemini has shown that automation and data analytics in logistics can lead to cost savings of up to 30%. This alone makes it a very compelling investment for companies.

Improved customer experience

IoT-Data analysis not only optimizes internal processes, but also improves the customer experience. How? Your customers today expect accuracy, reliability and fast delivery. They don't want to be faced with the inconvenience of a sloppy operation. OrOr with one that's stuck in the past.

Accurate delivery forecasts, real-time updates and responsive customer service contribute to higher customer satisfaction. A study by PwC found that 73% of consumers are more likely to recommend a brand that offers a better customer experience.

How analyzing IoT data in real time can change the operations of a logistics company.

IoT-Sensors attached to freight containers continuously collect data on their location and condition. This data is transmitted to a cloud application that enables remote monitoring and timely intervention. In the scenario, this technology prevents breakdowns, guarantees on-time deliveries and leads to significant cost savings.

This is just one of a million scenarios where the sensors can help. You can take into account your truck's operating hours and duration of journeys and predict when it will need servicing - allowing you to plan proactively and prevent equipment from breaking down or becoming unusable at an inopportune time.

supervisor analyzing warehouse logistics

Future trends in data-driven logistics

The future of logistics is undeniably linked to IoT-supported data analysis. They are like two peas in a pod. Every year the statistics come in and every year they prove that companies that invest in IoT tools and automation are the most competitive - Why? Because they can turn around and scale up in minutes.

For example, companies that had already introduced IoT tools and automation processes before the COVID 2020 pandemic did not feel any financial impact from this disaster. On the contrary, most were able to maintain their daily operations and even benefit from the chaos.

Why is that the case? They were the only ones who were prepared from the outset to manage with a minimum of staff. In many cases, some of these companies even leased their platforms and equipment to others. And over the years, as AI and other technologies get better and more precise, the benefits of IoT devices will quadruple.

Advances in AI and machine learning will further improve predictive analytics and enable logistics companies to anticipate disruptions and adapt quickly. In addition, blockchain technology promises greater transparency and security in supply chain management.

Data-driven logistics is not just a trend - it is a necessity in today's fast-paced world. The introduction of IoT-powered data analytics not only optimizes operations, but also lays the foundation for a more efficient, cost-effective and customer-centric logistics ecosystem.

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Published September 29, 2023

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