The logistics industry forms the backbone of trade in the Indian economy, with around 14 per cent of the GDP spent on logistics. This is extremely high as compared to 8-9 per cent in developed countries. Moreover, inefficiencies in logistics infrastructure put an extra burden of around $45 billion every year on the Indian economy.
Therefore, it is imperative to bring in efficiencies in the logistics value chain in order to achieve time and cost savings. To this end, logistics companies are leveraging information and communications (ICT) systems to unlock higher levels of operational efficiency, while creating customised, dynamic and automated services for their customers. ICT systems are helping companies gain end-to-end visibility of their products and raw materials, and track internal information by providing reports on inventory status and warehousing operations.
Most of the logistics companies have deployed enterprise resource planning (ERP) systems, which form the core of their IT infrastructure. ERP systems help enterprises capture huge volumes of data for gaining insights into financials, inventory and customer orders. Applications such as customer relationship management and supply chain management have also formed a critical part of their overall IT infrastructure.
In addition, logistics enterprises have adopted mobility solutions for monitoring their fleet of vehicles. For instance, many of them now use radio frequency identification (RFID) technology to track cargo containers. RFID can automate counting and tracking processes, resulting in faster and more accurate supply chain logistics. In fact, some industry analysts are of the view that using RFID can help enterprises achieve almost 100 per cent accuracy in shipping, receiving and order placement; 99.5 per cent inventory accuracy; 30 per cent faster order processing; and 30 per cent reduction in labour costs.
Besides, logistics enterprises are deploying advanced technologies such as internet of things (IoT) and cloud computing for accessing and analysing business information more effectively and taking informed decisions. Going forward, augmented reality (AR) technology is also expected to witness significant uptake in the industry.
IoT in logistics
The logistics industry was one of the first to adopt IoT. IoT technologies such as sensors, microprocessors and wireless connectivity have been in use for several years in various logistics applications such as hand-held scanners. However, the industry is yet to fully exploit the IoT potential.
One of the promising use cases of IoT in logistics is warehousing. Such operations account for about 20 per cent of the total logistics costs. With thousands of different types and forms of goods being stored in warehouses today, the warehousing space needs to be optimally utilised so that goods can be retrieved, processed and delivered as fast as possible. In this context, IoT can help in smart inventory management by leveraging the widespread adoption of pallet- or item-level tagging such as RFID in warehouses.
Wireless readers inside a warehouse capture data, including information on the product such as volume and dimensions, which is transmitted from each pallet that arrives through inbound gateways. This data can then be aggregated and sent to the warehouse management system (WMS) for processing. This would eliminate the time-consuming task of manual counting and volume scanning of pallets. Moreover, cameras attached to the gateways could be used for damage detection, by scanning the pallets for imperfections. Once the pallets are moved to the right location, the tags can transmit signals to the WMS to provide real-time visibility into the inventories, thus preventing costly out-of-stock situations. If any item has been misplaced, sensors can alert the warehouse manager, who can track the item’s exact location for corrective action. This would ensure higher service quality and customer confidence.
In addition, IoT can drive optimal asset utilisation in warehousing operations. By connecting machinery and vehicles to a central system, IoT can enable warehouse managers to monitor all assets in real time. For example, sensors could be deployed to monitor how often assets in a sorting system, such as conveyor belts, are in use or are idle, and at what times. Analysis of the data could then identify optimal capacity rates and tasks for the assets.
Connected assets can also enable predictive maintenance of warehouse transport systems. For instance, sensors could be placed on a sorting machine to detect the levels of physical stress by measuring the throughput or temperature of the machine. Cameras can also be employed to detect package damage or pileups as they occur. All this data can be collated for predictive maintenance analytics, which includes scheduling maintenance appointments and calculating the expected lifetime of a machine at its current level of usage.
IoT can also drive higher levels of worker health and safety through connected workforce and vehicles. Sensors and actuators with the help of a radar or a camera attached to forklifts can communicate with each other and scan the environment for hidden objects that could cause a collision. Forklifts could be programmed to automatically slow down at intersections when another forklift or pedestrian is detected around the corner.
Going forward, with the falling prices of device components such as sensors, actuators and semiconductors, faster wireless networks, and increasing data crunching capabilities, IoT is likely to become a disruptive trend in the logistics industry.
Logistics companies are increasingly using cloud solutions for their enterprise and mobility applications. Cloud-integrated logistics not only provides more data in real time, it also makes it accessible to all team members, regardless of their location or the time. This universal accessibility allows logistics managers to observe processes from remote locations and allow quick resource deployment in case of any emergency.
Further, working across interoperable and cloud-based networks ensures real-time changes and updates. A logistics company can analyse and respond to the latest information on routes, schedules, rates, regulations and other details almost immediately and take informed decisions. The biggest advantage of cloud-based applications is that they help logistics companies save the time and resources spent on building cumbersome, stand-alone systems and instead focus on their core competencies. Meanwhile, for capabilities outside their area of expertise, the companies can leverage third-party technology applications.
Cloud solutions also help in real-time inventory management by maximising the ability to respond to demand fluctuations and providing a buffer against emergencies.
Augmented reality in logistics
AR refers to the expansion of physical reality by adding layers of computer-generated information to the real environment. Information in this context could be any kind of virtual object or content including text, graphics, video, sound, GPS data and even odour.
In logistics, the most obvious application of AR is optimisation of the picking process. The large majority of warehouses in the developed world still use the pick-by-paper approach, which is slow and error prone. Furthermore, picking work is often undertaken by temporary workers who require cost-intensive training to ensure that they pick efficiently and without making errors. In this regard, advanced vision picking software can provide hands-free intuitive digital support to workers during manual picking operations. It can help in real-time object recognition, barcode reading, indoor navigation and seamless integration of information with the WMS. By using the software, each worker can see the digital picking list, along with the best route, in their field of vision, thereby reducing their travel time. Further, using automated barcode scanning capabilities, the system’s image recognition software can check whether the worker has arrived at the right location, and guide the person to quickly locate the right item.
AR can also help in the warehouse planning process. It can be used to visualise any planned rearrangements in full scale, making it possible to place interactive digital representations of proposed future modifications in the present, real warehouse environment. Planners can test whether measurements of a planned modification will fit in place, and model new workflows. In the future, this could allow a real warehouse to be used as the test-bed for warehouse operation planning.
Meanwhile, AR has the potential to optimise freight transportation in areas such as task completion checks, international trade, driver navigation and freight loading. For instance, an AR-equipped collector can quickly glance at the load to check if the task is complete. Currently, this requires manual counting or time-consuming barcode scanning with a hand-held device.
AR is also valuable for global trade service providers. The AR system could assist in ensuring that the shipment complies with the relevant import and export regulations and that the trade documentation has been completed correctly. Moreover, AR driver assistance applications (either with glasses or a windshield display) could be used to display information in real time in the driver’s field of vision. In effect, AR systems will succeed navigation systems, with a key advantage that drivers will not have to take their eyes off the road. AR systems can also provide the drivers with critical information displays on their vehicles and cargo.
Puneet Kumar Arora