The supply chain and logistics sector stands to be a big winner as adoption of the Internet of Things accelerates. A new study produced by DHL and Cisco predicts that 50 billion devices will be connected by 2020, compared with 15 billion today.
As more items within distribution centers become tagged, the supply chain could see $1.9 trillion in value created over the next decade when networks expand their connections to warehousing, freight transportation and other elements of the supply chain.
“The Internet of Things is the connection of almost anything – from parcels to people – via sensor technology to the Web, and both Cisco and DHL believe this will revolutionize business processes across the entire value chain including supply chain and logistics,” says Markus Kückelhaus, vice president of innovation and trend research at DHL Customer Solutions & Innovation.
According to the IoT Trend Report released this month, the logistics industry could unlock higher levels of operational efficiency over the next decade as the IoT connects millions of shipments and provides real time data when they are moved and stored.
Connected pallets and items will be a driver for smarter inventory management within the DC. In freight transportation, tracking and tracing of goods will become faster, more accurate, predictive and secure, while analytics of a connected fleet can help to predict asset failure and to schedule maintenance checks automatically.
Finally, connecting delivery personnel with surrounding vehicles and people can become a way of monetizing and optimizing the return trip to improve efficiency and service in last mile delivery. For customers, this means DHL can provide an even faster, more reliable and cost-effective service.
According to Cisco’s economic analysis, IoT will generate $8 trillion worldwide in value at stake (increased revenues and decreased costs) over the next decade from five primary drivers: innovation and revenue ($2.1 trillion); asset utilization ($2.1 trillion); supply chain and logistics ($1.9 trillion); employee productivity improvements ($1.2 trillion); and enhanced customer and citizen experience ($700 billion).