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IoT in the logistics sector: “The opportunity is unbelievably big”

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Rami Avidan, responsible for the Internet of Things (IoT) business at Deutsche Telekom, reflects on the potential the IoT brings to the logistics area. 

Rami Avidan, responsible for the Internet of Things business at Deutsche Telekom.

“In logistics and supply chain, the margins are rather slim. IoT from a technology perspective can absolutely help improve.”

When we talk about the area of logistics and the supply chain and the use of the Internet of Things, how has the adoption been in that sector?

Rami Avidan: If you take all vertical markets around the world, you are at around 10 to 20 percent of penetration in most of them, sometimes even below that. Logistics probably is the sector that has the deepest penetration of IoT. The penetration of IoT technologies in trucks is still not in a high percentage number. That is because of legacy. It is costly to implement these technologies in already deployed fleets 20 years ago. But The opportunity for the logistics space is unbelievably big. 

Why is logistics and supply chain such a promising area? What is the opportunity?

Rami Avidan: In logistics and supply chain, the margins are rather slim. IoT from a technology perspective can absolutely help improve. For example, a truck breaking down unexpectedly is a huge cost for these businesses. If your vehicles are connected from a telematics perspective, you have clarity of where are they, how are they doing. You can optimize: Is something going to break down, do I need to send somebody into a garage to have the vehicle repaired or to ring the right part ahead of time to minimize the downtime of that vehicle. 

Let’s have a look at connected containers. Customers keep telling us that they are losing big truck loads, even trucks loaded with cars. Being stolen. If you can track this starting with the truck picking up the vehicles and locate where they are by means of geo-fencing: You can see that the truck deviates from the route and immediately alert, maybe even have an interconnect with the police. 

Let’s take one more concrete example of retail. In retail, the supply chain plays a major role in all processes. 

Rami Avidan: Retail is a business with rather low margins, especially in physical retail environments. We do everything from actually connecting the store itself, from fixed-line to wi-fi infrastructures to connected assets within the store, think about the point of sale terminal, to the shelves being connected in real-time, connected back into the warehouse, actually knowing how many products do you have in your stores, you need to fill them up, dynamically changing prices … It’s a system of systems, different technologies working together. Some of the biggest cost drivers for stores actually is changing prices on the shelves. If you digitize that process somebody in headquarters can press the button changing that price. 

If you could deliver goods in the middle of the night, you would be able to deliver much faster. We have developed a solution that allows for a driver to come to a warehouse and the warehouse is unmanned but you have digital keys that allow you to open the warehouse and deliver the goods, confirm that you deliver the goods, close it and leave. Security and data protection are of utmost importance. You don’t have to have warehouse personnel working at night which is very costly.

We are working on integrating the logistics flow. One store that ordered something doesn’t need it anymore, maybe you need to dynamically re-route that truck to another store that has that requirement.

Delivering goods in perfect condition at the agreed time - this is very complex in the case of container liner shippings. External influences impair the transport. How do you deal with that?

Rami Avidan: Telematics units with GPS modules tell you exactly where your containers are. On high seas, however, there are typically no cell towers. Weather, long handling times in ports or traffic jams in canals can delay arrival by up 30 percent and foods arrive spoilt. You need other information sources to plan the following transport by rail or truck. Information like this is available on data marketplaces like the Data Intelligence Hub. At the face, DIH is basically a data pool, a data lake, the ability to - in a smart way - manage the way that you handle data, in a cloud or data-base infrastructure. The second part of it is the workbench from an analytics perspective: being able to actually do analytics, being able to create those type of insights that you are looking for and then being able to interact that with ERP platforms and drive certain decision makings. The third part is data brokerage. I’m talking about the 95 percent of data that we are not using, maybe even including the 5 percent that we are using. Why shouldn’t you be able to monetize that value in a controlled manner?

What is the role of connectivity in all these cases?

Rami Avidan: We should never forget, connectivityLAN for the highest of expectationsis the backbone of IoT. Connectivity is the ugly duck in the IoT world. To me, you take that out of an IoT solution, your IoT solution is dead. It is the bare necessity. If you don’t have a piece of hardware that works, that is connected to whatever you want it to be connected to, you have nothing. 

BVL Digital Podcast: The Internet of Things in Logistics with Rami Avidan 
Rami Avidan speaks about the vision and big promise of IoT, examples and use cases, security concerns and the importance of building out an IoT ecosystem of trusted partners. 
In the podcast by BVL.digital, the digital contact point for association members and logistics enthusiasts of the Bundesvereinigung Logistik e.V. (BVL), the association invites thought leaders, decision makers and doers in the logistics sector. Podcasts deal with topics such as digital transformation, sustainability, technologies and innovations, start-ups, world trade and logistics as a field of work. 

Find the full episode here: BVL.digital, Apple Podcasts, Spotifiy, Google Podcasts

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