The so-called ‘Internet of Things’ (IoT) could increase the value of the supply chain and logistics
by a dramatic $1.9 trillion through a combination of higher revenues and lower costs, a new report
from DHL and Cisco claims.
The internet-based interconnecting of many different machines and devices could open up huge
potential for more efficient and transparent supply chains in future, according to their joint
Trend Report which was released at the DHL Global Technology Conference in Dubai today.
DHL and Cisco Consulting Services are also collaborating on a joint IoT innovation project
that will improve decision-making in warehouse operations with near real-time data analytics based
on Wi-Fi connected devices.
The Trend Report, which estimates that there will be 50 billion devices connected to the
Internet by 2020 compared to 15 billion today, looks at the potential impact this technological
revolution will have on business.
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 utilisation ($2.1 trillion); supply chain and logistics ($1.9 trillion); employee
productivity improvements ($1.2 trillion); and enhanced customer and citizen experience ($700
billion).
The value at stake, meaning the combination of increased revenues and lower costs that is
created or will migrate among companies and industries when new connections are made, reveals the
huge potential when the Internet and networks expand their connections to warehousing, freight
transportation and other elements of the supply chain.
For any organisation with a supply chain or logistics operations, IoT will have
game-changing consequences, from creating more ‘last mile’ delivery options for customers, to more
efficient warehousing operations and freight transportation, the report found.
According to the report, over the next decade, 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. 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.
Ken Allen, CEO DHL Express and Board Sponsor Technology, said: “At Deutsche Post DHL Group
we have a deeply held belief in the positive powers of global trade. Yet, as our Global
Connectedness Index 2014 revealed, the overall level of global connectedness remains surprisingly
limited. There is huge potential for countries to further increase their connectedness and prosper
through trade, integration and technology. We believe the Internet of Things will be a primary
enabler of this global transformation.”
“Digital disruption is all around us and it’s having massive implications for business.
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. This report clearly demonstrates that digitization and the IoT will deliver
long term efficiencies and growth opportunities across a wide range of industries,” commented Chris
Dedicoat, president, EMEAR for Cisco.
“The Internet of Things is the connection of almost anything – from parcels to people – via
sensor technology to the web and both Cisco and DHL believe this will revolutionize business
processes across the entire value chain including supply chain and logistics. 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 eco system for sustainable business processes. The new Trend Report is
another step towards making sure DHL delivers the benefits of IoT to our customers,” said Markus
Kückelhaus, Vice President Innovation & Trend Research, DHL Customer Solutions &
Innovation.
DHL added that it is now also collaborating with Cisco Consulting Services on a joint IoT
innovation project that will improve decision-making in the warehouse operations through near
real-time data analytics based on Wi-Fi location data of selected devices. The solution is based on
Cisco’s Connected Mobile Experiences (CMX) which uses the high-density wireless network to collect
aggregate location data on Wi-Fi connected devices.
The Trend Report “Internet of Things in Logistics” is available online at
www.dhl.com/internetofthings.
