Nowadays, digitization progresses rapidly. Internal systems, reforms, and new business models that utilize the latest technologies such as DX, IoT, and AI are being developed one after another. In this article, while reviewing the meaning of basic words, we would like to look at current issues in logistics and supply chain industries and examples of productivity improvement, operational efficiency, and inventory management using IoT.
What is DX
DX (Digital Transformation) means that companies use technologies such as AI, IoT, and big data to improve operational flow and create new business models. It also means breaking away from conventional methods and transforming the corporate culture. DX promotion is an important theme for all companies to maintain their competitive advantage in the market in a rapidly changing era to survive in the international community.
Difference between IT and DX
IT (Information Technology) stands for information technology itself, namely computer software applications. ICT is more commonly used all over the world. ICT (Information Communication Technology) means technology that uses information communication technology to connect people with the Internet, and beyond that people with people. Examples include email, SNS, and online shopping.
There is no clear difference between IT (so-called digitalization) and DX, but the purpose of IT is to improve operational efficiency and productivity by introducing IT tools. The purpose of DX is to transform the business model and reform the corporate organization, which means how to work and how to improve operational efficiency. Therefore, DX means a transformation that encompasses the introduction of IT.
What is IoT
IoT (Internet of things) is a technology that connects things to the Internet and remotely controls them. For example, you can connect an air conditioner to the Internet and remotely switch it on and set the temperature. IoT technology is rapidly developing around us.
Issues in the logistics and supply chain industry
Each industry has started working on DX, but each has different challenges. Issues in the logistics and supply chain industry are labour shortages, constant long working hours, response to high demanded delivery speeds, and delivery accidents.
labour shortage
In the logistics and supply chain industry, the expansion of E-commerce market has led to an increase of home deliveries, the shortage of delivery drivers and workers in delivery canters. It is becoming a serious problem. Due to the corona problem, the demand for E-commerce has increased, the number of operations has increased, but the labour shortage problem has accelerated. Recently, by utilizing IoT technology, it has become possible to optimize delivery routes and cargo, which is expected to improve operational efficiency and resolve labour shortages.
Long working hours
Long working hours for drivers is one of the major challenges facing the logistics and supply chain industries. Currently, in the land freight transportation industry, the cause of death is overwork. It needs to stop working long hours. In Japan, there will be a cap on overtime work for truck drivers with penalties in 2024. This law is expected to curb long working hours.
On the other hand, drivers will be required to improve their work efficiency in order to reduce the amount of work that they have been doing overtime until now. Towards 2024, there is a strong demand for business improvement utilizing technologies such as IoT and AI.
Improving delivery speed
Due to the expansion of EC market, the demand for delivery has increased, and there is also a demand for delivery speed. Same-day or next-day delivery has become commonplace, and competition with other companies is intensifying. In order to improve the delivery speed, it is essential to improve the efficiency of the warehouse system and the efficiency of the delivery route. By utilizing IoT technology, it will be possible to solve the issues.
Accidents in logistics
The logistics industry has long faced the problem of traffic accidents due to the pressure of on-time deliveries and fatigue from long working hours. It goes without saying that the work-life balance and health management for drivers are important. By utilizing IoT technology, it is possible to improve operational efficiency, enable drivers to drive in perfect condition at all times, and reduce various risks.
In addition, by acquiring information using IoT devices for the transportation of fragile items that are sensitive to vibration, when unlikely event happen during transportation, the cause can be investigated based on the data. Improvement measures should be considered.
Advantages of IoT utilization
We have already touched on the issues, but the advantages of using IoT in the logistics and supply chain industries are summarized below.
Streamlining of delivery operations
The use of IoT is expected to improve the efficiency of delivery operations. It will be possible to collect data such as loading information of trucks and empty car information in real time. If we can improve the efficiency of vehicle allocation, it will lead to a reduction in delivery costs and labor costs, and will also help to maintain the health of drivers.
Efficient maintenance
There are various facilities in the logistics and supply chain industry, and by managing the status of the facilities using IoT devices, it is possible to quickly notice any abnormalities in the facilities. In the conventional method, it was often necessary to respond after an accident occurred, but it is possible to prevent it in advance. This will protect the lives of people working in the field, and will also help maintain and improve trust with customers.
Tracking by inventory management and data collection
By utilizing IoT, it will be possible to manage the number of inventories in the warehouse and the delivery status of products in real time. In the unlikely event that a problem occurs, it will be possible to pursue the cause and provide traceability. In addition, it will be possible to check temperature changes and vibration information during delivery, making it possible to prevent problems before they occur.
Examples of IoT utilization in the logistics industries
Improve shipping efficiency with warehouse routing
There is some example of improving shipping efficiency by introducing a route guidance solution in a warehouse using AI (Artificial Intelligence). Before the introduction, the movement path during picking was determined at the discretion of the forklift operator. It means that there is a big difference in productivity between people.
After the introduction of the new solution, the location of the products in stock and the person in charge will be grasped by IoT, the shortest route to picking will be calculated by AI, and movement will be performed like a car navigation system according to the guidance. As a result, it became possible to fill the difference in productivity due to people, and succeeded in improving inventory management and productivity at the logistics and supply chain sites.
Real-time management of distribution inventory
Warehouse size is limited, and inventory management is an important task in the logistics and supply chain industries. By utilizing IoT, it becomes possible to centrally manage inventory information in real time. This is the same in the manufacturing industry, but it is possible to achieve significant work efficiency in inventory and picking operations.
Temperature control for pharmaceutical transportation
So-called, cold supply chain is the transportation of pharmaceuticals that is carried out in accordance with GDP (Good Distribution Practice) and requires transportation under strict temperature control. For these shipments, there are many cases in which the shippers, pharmaceutical companies and life science companies, are obliged to present data at the time of shipment, but in recent years, real-time temperature control using IoT has been spreading.
We have introduced IoT into thermometers, cold storage boxes, and commercial cold storage containers to collect data such as temperature and location information in real time while pharmaceuticals are being transported. Although it is not possible to deal with the problem while the truck is running, in the air, or in the sea, it is possible to deal with it quickly after arriving at the destination, and the product warranty can be maximized. Therefore, it is possible to win the trust of customers who are sensitive to quality.
Due to advances in science, it is predicted that IoT technology will become even more indispensable in the future for pharmaceutical transport (cold supply chain), which requires consideration of factors such as vibration in addition to temperature.
Summary
- Problems in the logistics and supply chain industry are piled up, such as driver shortages, long working hours, and delivery speed.
- Examples of IoT utilization in the logistics industry: warehouse inventory management, productivity improvement, traceability, etc.
The logistics and supply chain industry is cited as one of the industries that can be most transformed by utilizing cutting-edge technologies such as IoT and AI. In international logistics, multiple companies are involved, and there are issues in various processes such as document-related, reservation, tracking, and management. Therefore, IoT and AI are needed more than ever to improve productivity and operational efficiency. I would like to continue to check what kind of success stories will come out in the future.
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