The 'Internet of Things' and cloud computing will revolutionise the logistics and transportation industries, says expert
Ever heard the one about the talking lamppost? Well, the ones in Bristol talk. Enabling everyday objects to have conversations with people was the inspiration behind a unique project that ran in Bristol in 2013 to illustrate the concept of the ‘Internet of Things’, or IoT.
Although thousands of people took part, having a chat with a lamppost isn’t exactly everyone’s idea of worthwhile conversation. But if the lamppost was fitted with a device to help keep the local council better informed about a fly-tipping problem that might be worth hearing about.
And that’s where the Internet of Things comes into its own, by using smart devices to capture and share data to enable greater visibility and understanding of what is occurring all around us.
Cloud technology is making IoT a reality
Forrester Research ran a study into perceptions of IoT, which revealed that over 50% of senior business executives were planning to implement an IoT solution in 2014. Thanks to the proliferation of cloud technology, this level of interconnectivity can be provided relatively inexpensively. It also means that external stakeholders become able to communicate effectively with each other based on alerts and signals given off by intelligent connected devices.
It sounds very complex, and IoT tends to be associated with consumer devices – intelligent fridges that can trigger an order for replacement food online when supplies drop below a minimal level, or security systems that are triggered after a car leaves an electronic gateway.
However, within a business context the concept is actually already well-established as M2M or ‘machine to machine communications’, an idea that has been lurking around since the 1990s and in widespread use.
It is especially relevant for supply chain activities, for example, active RFID tags that record when a medical consignment is transported at sub optimal temperatures, is a good example of how IoT is being applied today.
Massive untapped value from knowledge within devices
That’s just one example. According to Cisco, 99.4% of physical objects in the world are still unconnected and this represents a massive business opportunity.
They believe that the knowledge created by connecting objects and allowing them to communicate with each other could generate ‘value’ in the region of £10 trillion (from higher revenues and lower costs) over the next decade. And around a third of this activity is expected within the supply chain sector where visibility, tracking and data capture are essential to operational effectiveness.
Immediately this sparks significant considerations for the logistics and transportation industries. At the moment, the courier industry tends to do this manually, using barcodes scanned to track the whereabouts of parcels and consignments. This approach requires a high level of manual intervention and is prone to errors.
What scope does the IoT offer for courier companies and logistics providers to improve visibility and customer satisfaction levels?
Find out tomorrow, when part two of David Upton’s article on IoT will be published here on Supply Chain Digital.
Cainiao Network Launches Customer-Centric Logistics
As the logistics division of the Alibaba Group, Cainiao Smart Logistics Network has decided to provide its Southeast Asian customers with unsurpassed service during its annual shopping festival. Based on customer feedback surveys, the company will expand its real-time customer service support and speed up delivery times. ‘By expanding and deepening our services, we aim to provide a stronger logistics infrastructure that can bolster the booming eCommerce sector, support merchants’ expansion into new markets and diversify retail options for consumers’, said Chris Fan, Head of Cross-Border, Singapore, Cainiao Network.
Who Is Cainiao?
According to TIME Magazine, Cainiao ‘is far from a typical logistics firm’. The company controls an open platform that allows it to collaborate with 3,000 logistics partners and 3 million couriers. This means that merchants can choose the least expensive and most efficient shipping options, based on Cainiao’s real-time logistics analytics. The company’s goal is to ship packages anywhere in the world in under 72 hours—and for less than US$3.00.
For countless small business owners around the world, from coffee-growers to textile-weavers, this could change everything. Usually, it costs about US$100 to ship a DHL envelope from Shanghai to London in five days. Cainiao aims to change that. Said its CEO Wan Lin: ‘The biggest barrier to globalisation is logistics’.
What’s Part of the Upgrade?
Throughout the Tmall festival, Cainiao’s logistics upgrade will be divided into four critical segments:
- Real-time customer service support. Cainiao has launched a direct WhatsApp channel for customers to receive logistics updates and ask questions.
- Expansion of air freight parcel size and weight limits. Packages can now be up to 30 kilograms or 1-metre x 1.6 meters to help ship large items such as furniture.
- Daily air and sea freight connections. Shipping frequency will almost double to seven times weekly to maintain resilience and efficiency.
- Compensation for lost or damaged packages. Customers will be reimbursed up to RMB 2,000 (US$311).
Where is the Company Headed?
From June 1st to June 20th, the finale of Tmall, Cainiao will ensure that its customers feel confident in the company’s ability to deliver their packages. Despite global shipping delays due to COVID, the show will go on. Said Fan: ‘This series of customer-centric logistics upgrades reaffirms our goal of pursuing value-added services to enhance customers’ shopping experience while mitigating challenges posed by external factors’.
Furthermore, Cainiao has recently expanded its Southeast Asian operations, achieving revenue growth of 68% year-over-year. In Malaysia, the logistics operation has partnered with BEST Inc. and Yunda; in Singapore, the company has partnered with Roadbull, Park & Parcel, and the Singapore Post. And if its recent measures help retain and grow its customer base, the company will be well-poised to lead the industry in resilient and customer-centric global logistics. ‘COVID-19 made everyone realise how important the logistics infrastructure backbone is’, said Wan. ‘And it gave us a peek at what Cainiao should look like in three years’.