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Understanding connected logistics and why it matters

Consider this scenario: Mr Kumar runs a company, Primer, which manufactures, markets, and sells woollen clothes. Always a traditionalist, he prefers to keep the logistics and supply chain simple with minimal technological involvement to save short-term overhead costs for the firm. Unbeknownst to him, Primer incurs inventory losses over time which could have been avoided if smarter stock monitoring technologies were adopted. Every year, the company suffers minor losses due to shrinkage during the process of shipping their products overseas. As a result, Primer’s market performance dawdles along under Mr Kumar’s unimaginative leadership. The firm never manages to be on top of the pecking order in the local clothing sector. More importantly, it has incurred more losses cumulatively than the initial cost of introducing AI into their logistics and supply chain processes.

After his retirement, Mr Kumar entrusts his son with running the organisation. Keen to plug his efficiency leaks, he enables Primer to bring their logistical frameworks under an umbrella of automation technologies. By using location tracking technology, smart sensors, and Radio-Frequency Identification (RFID) tags, he is able to pinpoint the part of his supply chain where his products are lost. Using this information, shrinkage-related problems are dealt with immediately. Due to this, the firm sees a jump in its output efficiency and a reduction of similar avoidable losses.

In addition to this example, it goes without saying that the various components of IoT-driven logistics can benefit companies in any sector. A 2018 study conducted by McKinsey had estimated that companies could enhance their economic value up to US$ 2 trillion by employing AI-driven logistical solutions for their operations. Connected logistics is made up of several components, and here is how different facets of a supply chain can be transformed with these components:

Delivery and storage management

Location-based tracking systems constitute a major chunk of connected logistics. It enables companies to keep a close eye on their shipments in real-time. Based on the information collected by these systems, retailers can inform their consumers about the status of an ongoing delivery. From a seller’s point of view, they are in control of the shipment right from the beginning of the freight process to the end.

Transportation providers may or may not have the means to ensure that your goods are delivered to their destination by the desired time. There have been instances wherein companies have incurred losses due to misplaced goods during delivery. With location trackers, you can make any alterations in an ongoing shipment delivery if transporters err during the process. Moreover, using Real-Time Location Systems (RTLS), lost/misplaced goods can be tracked and recovered. Maersk Line, the world’s largest shipping company, uses Ericsson’s tracking systems for their fleet and delivery management.

Apart from shipment tracking, organisations also need to monitor the inventory in their warehouses. Raw materials or finished goods in a facility can be vulnerable to theft, misplacement, or damage. This can lead to delayed production times, delayed deliveries and ultimately losses for organisations. Inventory monitoring systems make sure that the company administrators are constantly aware of the quantity of stock in the warehouse. So, if your organisation incurs losses of stock during storage or transit, advanced tracking and monitoring systems will have you covered. Retail giants like Amazon already use advanced IoT and robotics applications to manage their warehouse operations.

Planning and decision-making for the long-term

To stay ahead of the curve, organisations generally make long-term plans to manage their finances, production, customer services, and other aspects. Predictive analysis is a component of AI that provides the data necessary to make such long-term decisions. Using machine learning, data mining and predictive modelling, predictive analysis systems can help the decision-makers in an organisation with understanding the current state of the market at any point in time.

Predictive analysis systems have one of the broadest range of applications for organisations:

  1. Firstly, such systems can analyse customer behaviour by scanning through records of their purchase preferences (regarding product lines) over several years.
  2. Based on behavioural data, the systems can direct organisations to produce high-demand products more and deploy their resources in operations which may yield profits in the future.

Predictive analysis systems have several other applications apart from the ones mentioned above.

Customer service management and customisation

Today, customer service and grievance handling form a very important part of a company’s logistical cycles. Organisations use Customer Relationship Management (CRM) systems to streamline these processes. These intuitive systems can detect and resolve issues with minimal human involvement. Ideally, organisations intend to make customer service increasingly proactive through these systems. CRMs make customer grievance handling more personalised for each individual consumer.

Speaking of personalisation,

a) Predictive analysis can provide consumers with a personalised experience when they visit a company’s website.

b) Predictive analysis uses a customer’s search history (regarding the goods or services they purchased/viewed through the company’s website) and maintains records of it. Later, such customers will receive purchase suggestions based on those records.

CRMs, predictive analysis systems, inventory monitoring systems and location tracking systems are just some of the IoT applications that can improve the logistics of an organisation.

What are some of the more common issues in your organisation’s logistical cycle?

  1. High costs involved in shipments of goods: While certain aspects, such as fuel costs, are out of your control, other aspects, like expenses arising from stock damage and shrinkage, among others, can be resolved (or at least mitigated) with the involvement of tracking and monitoring systems.
  2. Problems with manufacturing regulation: By scanning profit-generating products and consumer preferences, AI-driven systems can regulate how much a company needs to produce and invest in reducing costs in that regard.

As we know, logistics primarily covers the storage, movement, and delivery of goods. We at Freightwalla can enhance the transportation and delivery of your goods with our digital freight forwarding services. Our digital platform enables our customers to identify the route, carrier and shipping schedule so that your freight shipments can be made at the most optimal costs every time. You can contact us to know more about our services.



Freightwalla is a technology driven freight-forwarder with a mission to bring transparency for businesses engaged in international trade. #ShipSmart

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