Internet of Things Will Deliver $1.9 Trillion Boost to Supply Chain & Logistics Operations

A new Trend Report published by DHL and Cisco Consulting Services concludes that the ‘Internet of Things’ offers “huge potential for more efficient and transparent supply chains”.

The Trend Report estimates that there will be 50 billion devices connected to the Internet by 2020 compared to 15 billion today.

“For any organization with a supply chain or logistics operations, the Internet of Things (IoT) will have game-changing consequences, from creating more ‘last mile’ delivery options for customers to more efficient logistics warehousing operations and freight transportation,” said DHL.

“To get the maximum global economic benefit, we’ll need to understand how all components in the value chain converge and this will require a comprehensive collaboration, participation and the willingness to invest to create a thriving IoT ecosystem for sustainable business processes,” said Markus Kuckelhaus, vice president for innovation and trend research at DHL’s customer solutions and innovation unit.

According to Cisco’s economic analysis, IoT will “generate $8 trillion worldwide in Value at Stake over the next decade”. This will come 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).

According to the report, the logistics industry could unlock higher levels of operational efficiency as the IoT connects in real time millions of shipments being moved, tracked and stowed each day.

DHL explained how it believed these benefits can be realized: In warehousing, connected pallets and items will be a driver for smarter inventory management.

In freight transportation, tracking and tracing of goods becomes 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.

The IoT Ecosystem

Cisco Consulting Services and DHL are now also collaborating on a joint IoT innovation project that will aim to improve decision-making in the warehouse operations through near real-time data analytics based on Wi-Fi location data of selected devices.

“Digitization and the expansion of the Internet of Things is a catalyst for growth, which is driving new economic models and enabling organizations to remain competitive and embrace the pace of change happening globally,” said Chris Dedicoat, Cisco president for Europe, Middle East, Africa and Russia.

The Trend Report was release at the three-day DHL Global Technology Conference currently taking place in Dubai.

Related: Capitalizing on the IoT with Visibility and Intelligence