Supply chain managers are in a bind. They live in a digital world where customers expect their needs and wants to be met with the speed of an online download, but must deal with the limitations of the physical world. There are real-world limits on how fast trains, planes, trucks, and boats can get goods from point A to point B.
But what managers can do is use digital systems to make their supply chains more efficient, secure, and cost-effective. They can do that if they have the information they need when they need it.
Right now, much of the information passing before the eyes of supply chain managers is limited and late. What does that mean? Consider this:
- 30% of 76 billion packages shipped across the world in 2016 were damaged, delayed, or lost.
- In 2016, $114 million in cargo was stolen across North America.
- 76% of companies report at least one supply chain disruption a year.
Improving the quality and timeliness of that information can not only enhance supply chain performance, but it can be turned into a competitive advantage for businesses shipping perishable goods, high-value equipment, or cold-chain items.
If a shipment arrives at its destination so damaged it can’t be sold, there isn’t much you can do about it. If you can detect damage, spoilage, or theft in real time while the cargo is in transit, you can make an informed decision to address the problem before it gets worse. You could swap out damaged cargo, for instance, for undamaged inventory before it reaches its destination.
If temperatures rise around a pallet or package, a driver can be alerted to cool down the situation. And if a truck’s doors are opened when they shouldn’t be, then steps can be taken to avert a possible theft.
Getting timely information is only part of the problem. If the real-time information a shipper receives is sparse—only the location of a shipment, for example—its usefulness is limited. What’s needed is rich information about a shipment, not only location information but also environmental data, such as falls, breakage, vibration, temperature, humidity, and light exposure.
The information needs to be collected in a cost-effective way, analyzed, and applied when it’s needed to solve problems and make good decisions about the freight, so it arrives at its destination in time and in good condition.
Better Logistics Through Better Connections
This kind of timely and rich information can be provided by a connected-logistics solution that offers persistent, granular monitoring, such as Honeywell's Connected Freight Solution (see Figure 1). This solution offers shippers:
Scalable tracking at every level from packages to pallets. Cloud-connected sensors can support hundreds of packages and give shippers an information-rich view of their supply chain.
Comprehensive sensors for real-time insights. Alerts can be sent when packages are damaged, opened, stolen, or handled outside guidelines – allowing for quick remediation and tighter service-level agreements.
Lower costs to track cargo at a granular level. The use of mobile gateways that can travel with a shipment, plus compile and analyze sensor data, allows low-cost tags to be used in numbers so information can be gathered at the package level.
Edge-level decision-making. These gateways can make predictions and decisions on the spot, which is critical when shipments are out of the range of mobile networks. Thoroughly analyzing the data, the gateway can minimize costly false positives and send predictive alarms about imminent issues.
Data protection throughout a package's journey. Shipping data is encrypted from the gateway to cloud through a combination of hardware- and software-based security technologies, thereby protecting confidential asset information.
Overall, connected solutions allow a supply chain to be optimized. They can reduce emergency inventory, eliminate reverse logistics costs, certify the integrity of delivered goods, and ensure a healthy relationship between supply and demand.
A problem facing many shippers now is that data about a shipment can be created and stored in multiple systems along its route from origin to destination. A connected system eliminates that problem.
“The freight is talking to you directly,” explained Sameer Agrawal, general manager for IoT solutions at Honeywell. “You’re not trying to aggregate information across five, seven, eight, ten different systems in time to figure out what happened.”
“And since it’s a cloud-based system, you have the possibility of doing all kinds of analytics on it,” he added.
A Flexible and Visible End-to-End Supply Chain
Connected systems can be configured to an individual shipper’s business. For example, Honeywell's Connected Freight Solution provides scalable and persistent monitoring of shipments at every level, from individual packages to pallets (See Figure 2).
Not only is the system adaptable to a shipper’s needs but it’s robust enough to integrate with legacy systems. That’s because the Honeywell offering uses the Intel® Connected Logistics Platform, which incorporates open-source mechanisms to ensure seamless device-to-device connectivity—regardless of form factor, operating system, service provider, transport technology, or ecosystem.
There’s another advantage to Honeywell teaming up with Intel®. “Intel had the idea of doing something in the logistics space because they had to solve their own supply chain problems,” Agrawal explained. “They came up with a customer: themselves.”
Flexibility is especially important for logistics firms like freight forwarders, which need to meet a variety of demands from customers. “Users can have one system and offer different levels of visibility—in-time, real-time, shipment-level, pallet-level—without having to change systems, hardware, and business processes,” Agrawal noted.
The Honeywell solution is also cost-conscious, not only because it uses low-cost sensor tags, but it keeps costs for the system down by using existing technologies. “We are going after consumer-based technologies where the pricing continues to go down,” Agrawal said.
“We’re using an existing infrastructure rather than trying to create a new one, which can be expensive, slow, and not global in nature, so you can’t really scale up very fast,” he concluded.
Reducing Operational Costs and Security Risks
The system can reduce costs in several other ways. Data acquisition costs are reduced because a shipper doesn’t have to depend on others in the supply chain to furnish data. Data communication and access costs can decline, too, because every tag for a shipment doesn’t have to talk to the mobile network.
In addition, IT service costs can be minimized because Honeywell and Intel are maintaining and managing the system. Paper costs can also be reduced, as well as insurance claims and downtime, such as when a service technician has to wait for a part to arrive.
As with any connected solution, certain risks are created when data starts traveling over open networks. Intel technology supports numerous hardware enabled security features, some of which Honeywell uses to protect the integrity and confidentiality of data.
The system also contains a feature to thwart GPS jamming and to block undesirable additions. “The system is locked so no one can add new software, new hardware, or new things into it,” Agrawal explained.
All in all, connected systems offer businesses a way to wring waste from their supply chains and reduce spoilage, theft, and damage. By gaining deep visibility into their shipments and turning that visibility into data and analytics, companies can not only make better and more informed decisions faster, but open the door for additional revenue streams.