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Supply chain visibility

Tracking technology is fundamental for your supply chain visibility.
Wrong pick means losing a battle with disruptions.

Fortunately, with this guide on IoT, RFID, BLE and other technologies you are safe.

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supply chain visibility package identification system visualisation

Supply chain visibility basics

According to Gartner’s study, visibility was placed at the TOP AMONG THREE most important funded supply chain initiatives for 2019.

But COVID-19 and growing market expectations made the topic even more important.

To collect and analyse valuable data tracking and tracing technologies are utilised globally.

And HOW can YOU benefit?

With IoT, barcodes, GPS or RFID your company can:

  • identify outages in logistics processes,
  • and then fix them
  • to gain a competitive advantage.

Competitive advantage?

Absolutely. By offering clients up-to-date information about the goods and business transparency at the same time.

The importance of supply chain visibility

One cannot overestimate the importance of visibility. Especially in the time of the COVID-19 pandemic.

If you want to build a responsive and flexible business, you need to know what’s going on in your supply chain.

For instance, you will use visibility solutions when you want to:

  • identify leaking holes of your logistics,
  • make corrections in operational activities (e.g. determinate ETA),
  • or gain alternative sources of supply to deal with the unprecedented demand.

So, why supply chain visibility is important?

Because it influences your business in many dimensions.

It is a tool to improve your logistics’ performance, as well as your business performance.

Business and operational goals

The broad goals of visibility are to

  1. eliminate disruptions in the supply chain,
  2. find ways to improve efficiency,
  3. boost customer satisfaction
  4. and, as a result, make more money.

This was the apparent part.

But think about it for a moment.

Isn’t acquiring the correct information at the correct time about current and/or past operations in a specific supply chain THE BASIC GOAL?

Yes, it is. And it is the operational part.

Now, let’s look at what can or need one track.

Fleet, shipment or asset tracking

Companies like yours have different goals and needs for tracking their supply chains.

And various means to improve visibility.

In some instances, you will focus on asset tracking, while in others on cargo conditions.

For instance:

  • A jewellery company tracks in real-time the location of expensive assets in order to prevent thefts.
  • A food company tracks shipment conditions in order to secure its perishable products.

In addition, sometimes you will prefer to look at historical data.

Data sources integration

Shipment tracking, tracing and predictions are key elements in supply chain visibility but getting it is not always simple.

You need to obtain information from inside your company’s operational borders and across a partner network.

It requires an integration of different technologies and data sources. This takes time.

Chapter I

Visibility definition

Visibility is data monitoring and sharing with particular entities that will affect the effectiveness, speed or resilience of the supply chain. It helps to manage inventory, deliveries, orders, but also to control the efficiency of utilisation of assets.

With visibility you can improve your supply chain and make it more efficient.

Visibility most often is associated with tracking and tracing.

But there is more to consider.

What is supply chain visibility?

According to Wieland & Wallenburg, supply chain visibility is about awareness of and control over end-to-end supply chain information.

The definition includes:

  • insight in sources of data
  • and whereabouts of goods.

This knowledge enable agile, resilient, sustainable as well as compliant and trusted supply chains.

However, knowing what is supply chain visibility is insufficient to incorporate any changes.

Effective supply chain management is based on the integration and management of five types of flows or basic processes:

  1. products,
  2. assets,
  3. people,
  4. information
  5. and money.

Information hub

Most definitions state that supply chain visibility is the ability to track in real-time and trace past movements of the goods downstream towards the end consumer.

The idea works best when the whole business surrounding acts like a hub, passing information about capturing the cargo one to another through the chain and reverse.

RAW MATERIAL > PROCESSING > PRODUCTION > ASSEMBLY > END DELIVERY

But since such thorough end-to-end visibility is very difficult and expensive to obtain, many specialists would argue that it is worth to ensure it at least from the moment the order leaves the production site until it reaches its destination (a final customer or a shop shelf).

Complex ecosystem

As a more significant concept, supply chain visibility not only

  • accumulates information from business partners/suppliers
  • and your supply chain,

but also

  • monitors demand triggers on the market, reverse logistics
  • and takes action to create a trustworthy business environment.

The role of supply chain visibility is to help with decision-making and risk mitigation.

The undisrupted information access for all stakeholders, including customers is essential to have a fully visible, traceable and transparent supply chain.

Unfortunately, creating such an ecosystem is hard to organise and implement.

As complexity increases, it becomes difficult to have complete control of every link in the supply chain.

Furthermore, such complexity creates many blind spots which may mislead to wrong conclusions about the logistics or other elements.

Define YOUR visibility

As we mentioned earlier, levels of visibility may vary.

As supply chain visibility becomes kind of a buzzword and is associated with many technologies, it’s wise to take a deep breath before moving into the action.

So, what do you need to make your first step towards supply chain visibility?

Well, the answer is simple. You need to define KPI’s and other metrics that are to support your future business decisions.

What you decide to set as your primary visibility factor will have an effect on:

  • establishing data sources,
  • establishing data formats,
  • picking a technology stack and tracking devices,
  • defining integrations needed, and what is most important,
  • the amount of collaboration necessary to execute the vision and build undisrupted information flow.

Don’t ignore this step – it is fundamental to your success

Chapter II

Tracking vs tracing

Tracking refers to following activities in real-time. On the other hand, tracing refers to restoring historic data.

With tracing approach, you can, for example, check if the dairy products you have ordered or sent were kept at the right temperature during transportation.

But be aware that…

…if you learn about the significant temperature excursions after the shipment arrived, the only thing you can do is… panic.

Tracking, on the other hand, allows you to react to outages immediately while the shipment is still on its way.

Tracking gives you a clear view of your cargo’s conditions immediately when you require it.

Most commonly, tracking and tracing technologies are:

  • IoT devices,
  • simple data loggers,
  • GPS/GLONASS
  • QR codes,
  • mobile apps,
  • RFID

And there is more, of course.

Supply chain traceability

Supply chain traceability refers to routes that transported products take when travelling from the first stage of the supply chain up to the end consumer.

In some sectors – for example, food and pharmaceuticals, tracing has a massive impact on business efficiency; traceability allows:

  • to adjust to legal regulations,
  • to map stakeholders across the chains,
  • and to ensure end recipients the highest transit quality.

Furthermore, traceability creates the possibility to identify threats during shipping, by utilising data-collecting technologies and analysis.

Not tracking at all is a mistake

Assets on the move could be

  • damaged,
  • stolen,
  • lost,

shipments could be delayed, and your fleet could be immobilised or out of order.

Due to a lack of valuable information, global supply chains are facing a whole spectrum of problems.

Let’s talk numbers.

One hundred fifty million containers and 5 billion pallets are being moved around the world, transporting goods worth 4 trillion USD per year.

  • A container loses 2% of its value for each day’s delay.
  • 53% of containers are delivered late.
  • The average delay is four days.

So you certainly get the point.

Tracking enables significant cost reductions and massive customer service improvements.

Chapter III

The role of real-time tracking for clients and business

With billions of parcels delivered every day it is no surprise that some can be lost, misdelivered or separated.

No matter how valuable the parcel was, for the recipient, it can be a catastrophe: no wedding anniversary gift or medicaments for patients.

How does real-time tracking affect you and your clients?

Satisfaction

Information about the status of the shipment influences the level of customer satisfaction.

The end-consumer can plan the day ahead and receive the parcel.

And from a business perspective, you avoid not picking the parcel up, therefore there is no risk of reverse logistics.

Loyalty

A well-designed last-mile delivery process is an opportunity to strengthen your presence on the market and build a loyal customer base.

Below you will find an extra video from which you can learn a lot about customer experience in logistics!

Marek Różycki, former Amazon expert, Ian Kerr, author at Parcel and Postal Technology International and Maciej Lukas, strategy manager from Skyrise.tech talked about the role of customer experience in last-mile delivery.

Marek Różycki, former Amazon expert, Ian Kerr, author at Parcel and Postal Technology International and Maciej Lukas, strategy manager from Skyrise.tech talked about the role of customer experience in last-mile delivery.

Purchase factor

As we said earlier, customers appreciate information about the estimated time of arrival. But not only in transportation services.

During periods of increased sales (e.g., before Christmas), in addition to the price of the goods and availability in stock, the ETA is one of the factors affecting the purchase.

Chapter III

Supply chain visibility vs transparency

The terms visibility and transparency are often used interchangeably.

Generally, however, the term visibility focuses on the operational aspects of the supply chain.

Transparency, on the other hand, is information sharing on a different level.

You will meet situations where

  • clients,
  • trade and business partners,
  • stakeholders
  • or regulatory agencies

often demand knowledge about how a given market entity does its business.

Visibility provides a company with knowledge of activities across its supply chain; transparency is what and how it communicates that knowledge to customers, partners, and stakeholders
– Shay Scott, Managing Director, Global Supply Chain Institute

Customers want to make conscious purchase decisions, stakeholders want to run an ethical business, and business partners choose companies with good PR.

Transparency is an openness to these demands.

Supply chain transparency and ethics

The most important advocates of supply chain transparency are consumers.

Their interest in eliminating unethical behaviours (e.g., supply chain slavery), non-ecological or unsustainable sources (e.g., sea contamination or deforestation) increases every year.

Other ethical issues which can be fought against supply chain transparency are:

  • poverty,
  • human rights,
  • gender discrimination,
  • income inequality,
  • global warming,
  • animal abuse.

Sales dependency

The requirement for transparency is driven by an interest in obtaining global or local good.

The concepts of visibility and transparency are closely intertwined.

However, visibility is the basis for transparency, because without data monitoring, the company is not able to share knowledge with whom and how it runs a business.

And the following fact will surely interests you.

There is a dependency between transparency and sales.

A research conducted by Cone Communications showed that consumers are more likely to trust brands that focus on societal and environmental issues.

Take a look at the screenshot from Cone Communication’s report.

Report: CSR expectations
  1. As you can see, 92% of consumers have a more positive image of the company when a social or environmental issue is supported publicly.
  2. Moreover, 87% of consumers would trust the company that has a CSR policy.
  3. Finally, 88% of consumers would show more loyalty towards a company.

All of this means that transparency encourages buyers.

Real-time tracking in transportation services

Availability of information about the transportation service is often one of the factors that determine the choice of carrier.

Transport with schedule

82% of online respondents to Mobility Lab’s poll admitted that “having real-time arrival information is important when using public transportation”.

The same study showed that 64% of surveyed respondents check the arrival time of the bus or train before arriving at the bus stop or station.

But why do we talk about this?

Because it shows how real-time tracking is important to visibility in the public sector.

But just because research refers to public transportation, doesn’t mean that the private sector is different.

Transport upon a request

Taxi, Bolt, Uber etc. delivers information about

  • the ETA (Expected Time of Arrival),
  • carrier’s availability
  • and/or the possibility to order service for a specific time

In the mobile application, client can track the entire route of the vehicle in real-time.

These solutions use IDM (Interactive Delivery Management), which allows carriers or senders to interactively communicate with consignees to ensure the best customer experience and on-time delivery.

Real-time tracking benefits for business

Real-time tracking affects key business areas, e.g., customer service. By introducing tracking solutions companies gain a business tool to address what is unpredictable.

Access to real-time data gives an opportunity for fast reaction in situations such as:

  • unplanned stop, temperature excursion, impact etc. – you can reach out to a shipping company, or even a driver, if some suspicious data is noticed
  • predicted delays – you can inform the customer in advance
  • a cargo is damaged – you can send a back-up shipment immediately
Chapter IV

6 supply chain visibility benefits

In a logistics business, time is a crucial element for both the sender and the recipient.

Shipment tracking systems provide visibility in the supply chain but also more business benefits such as:

  • reducing potential costs caused by delays and missing packages,
  • maximising performance and efficient processes,
  • providing a better customer experience.

But these are very general benefits.

So, let’s dive deeper!

Avoiding damage during transportation

Transportation may cause spoilage of food, for instance.

Food companies need to make sure that not only their cargo gets to shops on time, but also that conditions under which it is transported are stable and do not cause quality loss or spoilage.

  • In this case, e.g., tracking and tracing temperature, humidity and shocks might be of great importance for the safety of the final consumers.

Cargo theft prevention

Supply chain theft is common.

Tracking and tracing cargo makes sense for valuable goods such as jewellery, machines, objects made on-demand, as well as big volumes of more common commodities.

  • Thanks to tracking and tracing location, the unpredicted and suspicious stops and excursions can be identified, which helps prevent occasions for theft.

Transportation disruptions prediction

Operational constraints and responsiveness were a PwC’s subject of interest, in its “Global Supply Chain Survey” report.

It turns out that companies whose logistics practices are flexible are able to be nearly 30% more effective when it comes to delivery performance – comparing to companies who are rigid.

  • Shipment tracking systems allow a company to react in stressful situations such as delays.
  • Actions may include sending a new package, notifying the customer in advance or trying to improve shipment time by changing the shipment method.

Logistics services vendors evaluation

How common are delays?

Are the shipments handled as intended?

Should we pay the full price for each shipment?

  • Tracking and tracing cargo gives an excellent opportunity to monitor SLAs with carriers and 3PL companies and evaluate and compare their services.

Improving logistics efficiency

But tracking and tracing cargo, if done correctly, helps improve not only the services of vendors but also internal logistics and supply chain management.

It gives insight into your organisation and helps spot inefficiencies and bottlenecks.

  • You can evaluate and redefine your standard operating procedures.

Better customer experience with lower support cost

Finally, sharing data about cargo or shipment location, and information on the cargo conditions with customers improves the customer experience and helps cut costs of manual customer service.

  • Customers themselves can check what they can expect and if the product they got was appropriately handled, and thus if it is safe and of the right quality.
Chapter V

3 supply chain visibility challenges

Logistics is a complex business.

From ever-changing weather conditions, road and air traffic, through politics, general market unpredictability and new legal requirements – you must monitor lots of information and take into consideration impact from many directions.

Technologies of supply chain visibility ought to handle some of these challenges, but sometimes they are troublesome too.

87% of chief supply chain officers (CSCOs) questioned by IBM admit that it is challenging to predict and manage supply chain disruptions.

And 84% of respondents point to lack of visibility as their biggest challenge.

Supply chain visibility and information sharing

Identifying possible sources of data, converting them into one format and processing the information is of great importance for obtaining visibility in the supply chain.

But information gathering and processing can be problematic.

Moreover, once you know what data to collect and what conclusions are drawn from them, you will start wondering how to share this information with the right people in your company, your business partners, clients, marketing agencies and other stakeholders.

Any solution?

Try reaching out to software consultancy companies with experience in logistics (Skyrise.tech is at your service).

Logistics digitisation

In the early 2000s, Logistics Management Systems (WMS, TMS, IMS…) were standalone products that did not exchange information with each other.

In many cases those solutions are blocking the process of innovating.

Separate databases, slow inquiry response or outdated software architecture hard to upgrade affect a company’s effectiveness.

The growing importance of supply chain visibility forces us to introduce new solutions to

  • exchange data between IT systems freely (API, EDI, webhooks, plugins etc.),
  • update the old ones
  • or leave the legacy software behind.

IoT tracking devices send data to cloud platforms, where data is stored, processed and analysed.

A big benefit of cloud solutions is scalability, easy maintenance and automatic upgrades.

Furthermore, cloud solutions are simply safe and usually much easier to connect to with other systems.

Keep in mind, that the company that wants to digitalise its logistics has to invest time and money and use the help of IT specialists to innovate and keep up with the dynamic market.

Management issues in supply chain visibility

One of the main topics of supply chain visibility is to set priorities and deal with specific issues.

It is not uncommon that the management team puts a lot of pressure and expectations on top of a project.

Every manager would like to see fast improvements of processes, cut costs as much as possible, and solve many problems at once.

Unfortunately, such requirements tend to be unrealistic.

The solution is, however, straightforward.

Don’t try to rush things.

  1. Implement one element at a time,
  2. check how it works
  3. and then implement another.

Tech solutions must go through comprehensive testing and in supply chain visibility, these tests may take quite some time.

Chapter V

Supply chain visibility technologies

IoT devices, satellite and radio systems, descriptive, predictive, cognitive analytics, control tower, machine learning (ML), artificial intelligence (AI)… there are many technologies and solutions that facilitate supply chain visibility.

Which are used for what? And how do they differ?

Important! 22% of retailers and manufacturers have other focuses than trying to find new disruptive technologies and 50% are doing this only on an ad hoc basis. By incorporating tech solutions, you gain a real advantage over 50% of your competitors (source).

Data capturing and identification

Automatic identification and data capture (AIDC) technologies are used to automatically identify, verify, record, communicate and store information.

From the very basic to more advanced these are:

  1. Barcodes and QR codes
  2. RFID
  3. NFC
  4. Bluetooth
  5. IoT based on cellular networks (2G, 3G, 4G, 5G) and other communication protocols

Let us take a closer look at them.

Barcodes and QR codes

Barcodes and QR codes are a visual representation of data, readable only by optical scanners/readers. The difference between these two technologies lies within the data storage possibilities, the use cases, and the scanning technology. Both technologies are cheap and universal.

There are different types of codes, that can store different pieces of data (numeric data, alphanumeric data etc.).

Basic division is between 1D (one dimension) and 2D (two dimension) codes.

  • 1D – Lineal barcodes (e.g., Code-128, Code-11, Flattermarken) – group of codes used in logistics and industry for serial numbers, product IDs, etc.
  • 2D codes (QR-Code, DataMatrix, PDF417, Aztec) – store any kind of data, especially for banking and payments, logistics, mobile tagging, business cards, events, Wi-Fi access etc.

When compared to 1D codes, 2D codes may hold much more data, are no less easy-to-use, cost-effective and have error correction and data restoring ability.

Here are some examples of optical codes and how they are used.

Code type Use cases Code type examples
Postal bar codes (1D codes) Postal service providers optimize mail delivery with this kind of codes Australian Post Standard CustomerKIX (TNT Post Netherlands)Royal Mail
GS1-DataBar (1D codes or mixed) With GS1-DataBar trade items are identified; also used for a retail point of sale (POS) applications GS1-DataBarGS1-128 Composite Symbology
EAN and UPC bar-codes (1D codes or mixed) Used for product identification EAN-8EAN-13UPC-A
Healthcare codes (1D and 2D) Healthcare and pharmaceutical applications use these codes HIBC LIC 128HIBC PAS 39Pharmacode One-Track
ISBN, ISSN and ISMN barcodes Used to identify books, periodicals and media ISBN 13ISMNISSN
Barcodes differ not only by the amount of data they can hold but also when it comes to reading options. Depending on the symbology, size and resolution of the barcode, you will use a High Density (HD) reader or a Long-Range reader.

The pros of all types of barcodes are that you can read them even with a smartphone with a mobile app dedicated for the purpose (for QR codes many modern smartphones have this functionality available as part of the camera application).

But what is very important to remember – when you are considering using any sort of barcode in logistics or supply chain management for identification, the barcode label must be within the line of sight of the reader and directed towards it to work. Otherwise, detection and identification are not possible.

So, from the practical perspective – it is quite cheap and easy to print a sticker with a barcode and put it on an object or a box, but to be able to identify and register the object effectively, you need either a carefully designed and set up supply chain infrastructure (e.g., packing or sorting lines), or you need employees and other actors within the supply chain to perform the barcode scans manually.

Logistics industry uses barcodes and QR codes for:

  • production management (e.g., for identifying components, monitoring production process and track and trace the batches),
  • inventory management (e.g., in warehouses, especially for monitoring flows of goods to and from the warehouse, and understanding what is on-site),
  • repository management (e.g., to monitor supply vs. demand, and show customers products availability in stock),
  • sorting management (e.g., to sort post fast),
  • marketing and better customer experience (e.g., to connect customers to a website where they can learn more about a product, its use, inspiration, authenticity, origin etc.),
  • shipment tracking (when the shipment reaches a new milestone on the delivery).

RFID

You know this technology from ID cards, access cards for buildings and public transit systems. Radio-frequency identification technology uses electromagnetic fields to automatically identify and track tags attached to objects – which results in identifying objects.

To build an RFID system you need three things:

  • RFID tags (also called chips or transponders)
  • RFID readers
  • A software to receive, store, process, and send data

For the RFID system to work, you need at least 1 reader and at least 1 tag. A tag can hold up to 608 bites (96 bites in standard EPC memory and additional 512 bites in User Memory).

Due to the way data is saved the tags can be divided into 3 categories: RO (Read-Only) tags, WORM (Write Once Read Many) tags and RW (Rewritable) tags.

Regarding the power source, there are three types of RFID tags – passive, semi-active and active.

  • Passive tags – do not have their own power source and acquire the energy from radio waves transmitted by the reading device.
  • Semi-active tags – are a combination of passive and active tags. They have their own power source in a form of a battery, but this only serves to power the chip, not to emit radio waves. Their sensitivity is much greater than that of the passive tags, and their battery life is longer than that of active tags.
  • Active tags – have their own built-in battery and offer higher data logging rates and longer transmission ranges between them and a reading device.

Both passive and active RFID tags don’t have to be in the line of sight to scan them. In addition, one reader can collect information from multiple tags at the same time. The reading range depends on the RFID type and waves frequency; generally, it’s up to 15 meters for systems of passive tags and up to 150 metres for active tags.

For the passive tags the frequencies work as follows:

  • LF (Low Frequency) standard uses the range of 30 to 300 kHz and can read data from 10 cm (e.g., access card)
  • HF (High Frequency) standard uses the range of 3 to 30 MHz (according to ISO 13,56 MHz) frequency and can read data from 1,5 m (e.g., keyring)
  • UHF (Ultra High Frequency) generally ranges from 300 MHz to 3 GHz, but in systems and devices, the frequency is between 860 and 960 MHz. This standard can read data up to 15 meters (e.g., marker on metal)
What is important, standard passive RFID-based identification and tracking system gives you less accurate information – it informs you only whether the tag is in its range. However, there are some passive RFID systems that can tell you location in a 3D space which has accuracy up to 10 meters. Active systems give you more precise information of tag location with accuracy up to 3 meters.

The speed and accuracy of deliveries, completion of goods into a consignment, managing their flows, package implementation and control of returnable packages are very often performed with the use of RFID labels and tags.

It is perfect for warehouses and short distance communication (up to 100 m) as experienced in retail shops or hospitals. It helps to create organised systems that store information about inventory, assets and people location.

Other RFID use cases in logistics:

  • In warehouses
    • to automate inventory management
    • to locate assets (within a defined area)
    • combined with autonomous vehicles – to automate warehouse operations
  • In supply chains managed internally
    • to determine the location of a shipment/asset/inventory across multiple sites and stages of the supply chain
  • Retail shops
    • to secure assets from thefts
    • to automate inventory management
    • combined with IoT mirrors – to deliver smart shopping experiences
    • combined with contactless payment card systems – to simplify the checkout process and shopping history
  • Hospitals
    • to locate people and assets across hospitals and medical centres quickly

The introduction of RFID was supposed to set new standards in logistics, but some aspects of the technology created limitations. As the recent report by DHL sums it up:

RFID tags, though inexpensive, were not cost-competitive to simple printed labels. A lack of global standards across reading infrastructure and tags, as well as a swarm of heterogeneous proprietary systems, made global deployments complicated and expensive. Also, multiple stakeholders had to be involved to ensure availability of uniform, consistent infrastructure across complex and inherently fragmented supply chains (source).

But the technology is regaining professionals’ interest, especially for applications in the well-controlled environments.

Bluetooth

A wireless technology standard for exchanging data between fixed and mobile devices over short distances – generally up to 100 m. Newer versions of Bluetooth reach up to 1000 m outdoors, but it is strongly affected by the surrounding.

Devices equipped with Bluetooth communication protocol consume very little energy and can create a mesh network – pass information from device to device quickly across longer distances without the immediate proximity of the gateways.

Furthermore, with Bluetooth 5 standard, devices can infer relative angle and distance of one another, so their location can be determined accurately.

Bluetooth use cases in logistics:

  • Warehouses
    • Bluetooth beacons used to track and monitor assets
    • to help autonomous robots navigate around the facility
  • In retail shops
    • to send personalised offers to customers’ smartphones
  • Logistics networks (paired with other technologies)
    • to track integrity of assets and shipments
    • to transfer information on conditions of assets and shipments to the gate connected with the Internet

Although Bluetooth standards are regularly developed and updated, the technology is still mostly useful for short-range communication, usually within one specific site or across well-controlled environments because it requires quite high investment in the gateway infrastructure.

IoT-based sensor networks

IoT is short for Internet of Things and refers to a communication standard. IoT devices are a group of devices that can store, transmit and process data using all kinds of cellular technology or satellite communication in real-time.

IoT-based sensor networks consist of IoT devices equipped with sensors to track and trace location, temperature, tilt, shocks etc. and communicate with the proper software. At Skyrise.tech we run Independent tests of 5 location tracing devices about which you can read on the blog.

They are commonly used in the transport of goods, but also in further links of the chain (fisheries, crop fields, mines etc.) to track raw materials.

They support the supply chain visibility to the greatest extent but have some limitations.

Sea and air transport are such examples, because the cellular connection to transmit data in real-time is rarely or not at all available throughout the whole route. However, IoT devices are still very usable as they can log environmental data when not connected to a network and then restore the communication when they are back in cellular range.

Find more about IoT in Chapter VI

IoT use cases in logistics:

  • Tracking and tracing the location of shipments, fleet and assets
  • Monitoring and tracing environmental conditions during shipping and production
  • Monitoring the state of assets and predicting when they need maintenance

The range of communication protocols

The scope in which a given technology works determines tracking possibilities. To track global or international shipments, you need technology with very good coverage – it means either with global range, or medium-range and dense evenly disposed infrastructure.

The short-range communication protocols, due to very high demand for infrastructure for them to be effective, are usually reserved to track and trace, and monitor objects, in smaller, well-controlled environments.

  • Wireless
    • Short-range (BT, Wi-Fi (LAN), RFID, NFC)
    • Medium-range (cellular (2G, 3G, 4G/LTE, 5G))
    • Long-range (LPWAN (NB-IoT, LoRaWan, Sigfox)
    • Global -satellite comms
  • Wired

Other sources of data used for supply chain visibility

There are at least three other options if you want to gather useful data and get better visibility of your shipments (not necessarily your assets).

These are:

  • RPA (Robotic Process Automation) systems such as UiPath or SmartRPA
  • Logistics partners’ APIs (Application Programming Interface)
  • Custom integrations with logistics partners systems
These data sources can give you insights into the status of your shipment and milestones it has reached, as well as help you check e.g., if the flights or ferry connections that you are using operate according to schedules.

RPA (Robotic Process Automation)

You can use RPA to automatically retrieve data on the status of your cargo from specific companies’ websites and platforms aggregating data and update them e.g., in an Excel file or a TMS or SCM system.

This is done by setting a scenario of actions that should be undertaken by a bot in an RPA system – after you have done this, the robot checks your shipments one by one very fast, and you or your colleagues don’t have to waste your time on tedious manual work.

API (Application Programming Interface)

The first method used for sending information about cargo electronically was EDI (Electronic Data Interchange), created in the ’60sand still used by many companies.

But nowadays, API (Application Programming Interface) becomes the new standard in the T&L industry. API makes it possible to share information openly and instantly between parties – usually by using cloud system computing.

An example could be the information exchange on cargo status between your systems and systems used by your carriers, couriers and other 3PL companies.

Unfortunately, not all systems have APIs, and even if they have it, they vary in quality and ease of use.

Custom integrations

Custom integrations may be done based on EDI and API. But they can be quite demanding if your logistics vendors’ systems do not have such interfaces.

In some cases, specialised Integration Platforms as a Service might be used as intermediaries in data integration – they can be treated as translators of data between different systems existing on the market.

Many software companies offer system integrations, but a successful integration requires experience and knowledge about data flows, the software used and the industry. Therefore, it is highly beneficial to use this type of services from companies experienced with the transport & logistics industry.

Using different sources of data to improve supply chain visibility

What is worth stressing – the real, end-to-end supply chain visibility, and especially predictive analytics based on it, is possible usually only thanks to using multiple sources of data.

For example, information from third-party systems on the movement of vessels on seas, or planes in the air is great to cover blind spots left by data from the physical trackers (especially IoT trackers).

And physical trackers are good to cover blind spots left by the data from systems of logistics companies – some of the smaller logistics companies do not even have the systems to share such basic information as “delivered” status, not mentioning reaching any milestones on the way, or a route between the milestones.

Analytics

Your company’s performance may improve as a result of implementing data analysis tools.

In many cases it also needs an operator – a person responsible for drawing accurate conclusions from the data set and – equally important – the context of data embedding. But on the other hand, many parts of data analytics can be automated, either with some workflow automation, artificial intelligence (AI) and machine learning (ML).

Descriptive analysis

Descriptive analysis technologies enable you to create and view a dataset.

For example, data visualisation tools (graphs, maps, dashboards, area charts, bar charts, heat maps, timelines …) help you to present one set of data.

The other example will be BI (Business Intelligence) / Data integration / ETL (Extract, Transform, Load) tools which are many sources of information combined into comfortable dashboards and reports with many data sets.

When implementing technologies for descriptive analysis, you ought to build context around the collected information. Think about what information will help you answer the most important questions for your business and how this information will affect your company.

Descriptive analytics helps you answer questions such as:

  1. What is the level of …?
  2. What has been/ was the level of ….?
  3. What happens or happened? How many times?
  4. How different events and measures correlate?
  5. What are the observed trends?

Predictive analysis

In turn – predictive analytics help answer questions that are built around future events:

  • What will happen and when?
  • What is the probability of the occurrence of X?
  • What is the prognosis for Y?

Predictive analytics technologies allow you to create alerts before an unexpected but impactful event happens.

For example, predictive machine learning (ML) / artificial intelligence (AI) algorithms can detect patterns of machinery component failures and learn from these patterns. During the learning process, they create a database with lots of relevant data. When the database is big enough and algorithms smart enough, they will notify personnel so that machinery maintenance can be comfortably planned ahead.

Also, when tracking the movement of cargo, ML algorithms may predict how small delays in the beginning can translate into the final estimated time of arrival (ETA) based on the data about previous logistics operations and some extra data from external systems e.g., on the weather conditions or traffic.

Blockchain

The concept behind blockchain can be described as a distributed ledger that can record transactions between parties in a secure and permanent way. It was introduced in 2009 to record and verify operations on a new currency – bitcoin.

The technology is young and developing, although some industries such as financial or healthcare have already started to benefit from blockchain technology.

For the logistics industry, especially for supply chain transparency, blockchain may become a powerful solution.

Blockchain potential for supply chain transparency

  • Reducing bureaucracy and paperwork – the proof of purchase, permits, certificates can be stored in a tamper-evident digital format.
  • Reducing frictions in shipment statuses – information from blockchain is in real-time.
  • Enabling data transparency – each block of information has its own code which can’t be forged. Every violation is easy to recognise and trace.
  • Automating commercial processes in logistics with smart contracts

Blockchain challenges

  • Industry adoption – technology is not mature yet, the industry has problems to adopt and use blockchain to its advantage.
  • No standards and governance.
  • No legal standards.
However, we believe that companies that want to be more transparent can utilise blockchain alternatives, such as event sourcing.
Chapter VI

Shipment tracking software

Shipment tracking software can deliver information about real-time location, conditions of your goods, data for analysing shipments etc., as well as let you analyse historical data.

The software can display the origin and destination information, along with the delivery schedule, estimated time of arrival (ETA), method of delivery, and tracking number. Can but does not have to, of course. It is all up to the requirements and things you can do with the data you have.

Solutions designed to track shipments have features that are strongly correlated with time and cost management. For example:

  • tracking shipments in real-time,
  • recreating the historical route,
  • notifying when something is wrong (e.g., delays, theft attempt),
  • estimating the delivery time,
  • calculating shipment costs,
  • enriching databases in reliable information about assets, fleet and shipments details

and more.

From free to fairly expensive, from installed on-premises to available in the cloud, from PC solutions to mobile applications – the market is still growing and adapting to changing trends and needs.

What can be tracked?

Shipment tracking software can work in many different ways. The right solution for you depends on your needs, your business specifications and what you want to achieve. The below factors influence what type of solution is right for you.

What type of software do you need?

  • Software for eCommerce companies
  • Software for in-house logistics and supply chain departments
  • Software for T&L companies

What do you need to track?

  • Shipments
  • Fleet
  • Assets

What is the size of your company?

  • SMB
  • SME
  • Large enterprises

What modes of transportation do you use?

  • By land
  • By air
  • By sea
  • By rail
  • Mixed

What goods will be delivered?

  • Fragile goods (e.g., glass, electronic devices)
  • Condition fragile goods (e.g., food, medicaments, animals)
  • Valuable goods (e.g., jewellery)
  • Hazardous materials (e.g., chemicals)

etc.

What are your business goals?

  • To cut downtimes
  • To optimise the transport options
  • To ensure safety
  • To ensure stable conditions
  • To cut costs
  • To assess carriers
  • To improve the customer experience

What types of loads do you use?

  • Singular parcels
  • Pallets with goods
  • Full truckload
  • Less than a truckload
  • Containers
  • Intermodal

As you can see, the right software for you depends on many factors and not getting it right the first time might be very costly.

A software consultancy company specialised in logistics could help you map your requirements, stakeholders and challenges, and generally help you find or design and introduce the right solution.

Shipment tracking solutions comparison

As we said earlier, there are many types of software available on the market. From open-source solutions to custom software solutions, from licensed products to cost-free etc.

How do they differ? We prepared a comparison in the table below.

Open-source solutions Out-of-the-box solutions Custom software solutions
General description Software solution available for free; anyone can inspect the code and modify it for the sake of their own goals. Semi-customizable software solution often combined with tracking devices; address most common industry problems. A custom shipment tracking software is a fully customisable software solution developed by a software house to meet custom requirements.
The biggest pluses
  • It’s fee-free
  • It’s customizable
  • Most often custom integrations can be done by software houses to acquire more data
  • Tracking devices are part of such solutions (see more)
  • Usually, you have a trial period
  • Support is usually in price
  • Relatively quick implementation
  • From the beginning of the software production process, you have the control over features, technology and scope of work delivered
  • Features are tailored to the individual customer’s needs
  • You get a Proof of Concept first
  • You get a Minimal Viable Product (MVP) version before implementation of the whole system
  • Your software partner can develop them further over time
  • You decide on architecture and security levels
The biggest minuses
  • No support
  • Not secured
  • Requires the most work to be done (analyse, develop, customise, test, implement, integrate etc.)
  • You don’t decide on the basic features
  • You don’t decide on the architecture
  • You pay for different security levels
  • Limited in terms of features and development possibilities
  • Onboarding process (sometimes companies need to bend in terms of their internal processes to use a product)
  • Support depends on your agreement
  • Highest price
Pricing models No pricing models Licensed It depends on the agreement
Major advantage Fee-free solutions Relatively good quality to a price There is no randomness while creating custom shipment tracking software. From the very first kick-off meeting until the last tests, work is done in accordance with the client’s requirements

Tracking devices

With tracking devices, you can transform your logistics into a controlled, highly efficient operation. You can receive information in a real-time on your shipment’s location, temperature and other important factors as well as gather information after a certain point of shipment.

Cisco predicts a 1.9 trillion USD growth until 2025 for the logistics industry, thanks to the implementation of IoT and enabling real-time tracking.

Data loggers vs IoT devices

There are two basic types of tracking devices that distinguish the operation time: data loggers and IoT devices.

Simple data loggers, known and used in the industry for many decades now, collect data on the inner disc during the packing, storage and shipment, but the data can be transferred and processed further only on certain checkpoints or after the whole shipping process is over. This means that simple data loggers don’t work in real-time, and data can only be analysed retrospectively.

IoT devices with sensors work differently. They are connected to your software via the Internet to track location and/or environment of the shipment in a real-time. This means that you do not have to have the device in your hands to read data. IoT devices create faster, more reliable networks with which you can monitor what is happening in real-time with your shipment and/or what happened during the delivery.

How do they work?

Tracking devices armed in the geolocation system (which can be based on i.e., GPS, GSM triangulation, WPS (Wi-Fi Positioning System) record the exact position of a tracked object on land, in the air or on the water at specific time intervals. Collected data can be stored within the device or transferred to a location in a database centre, cloud or an Internet-enabled computer.

Also, more advanced IoT devices communicate with the central system on an ongoing basis and in response to certain pre-defined events, so the system can alert the user monitoring shipment about problems if necessary.

They make measurements at specific intervals and send them in real-time.

But what does it mean?

The intervals short enough to call the whole procedure as real-time tracking, vary from implementation to implementation.

For tracking of some assets e.g., empty containers, it might be enough to get information on their location once a day, but on the other hand, when you are moving a batch of temperature sensitive vaccines, you might want to know if the temperature has changed every 10 minutes, to react right away and prevent waste if any undesirable tendency appears.

Shipment condition monitoring

Whenever a pallet is dropped from a crane, a refrigerated truck is opened, or perishable goods are hit by the sun, the cargo experiences an impact. Sensors built into some tracking devices can monitor these shocks and the tracking systems can alert you when something goes wrong.

The sensors collect data upon the following parameters:

  • Position
  • Utilisation
  • Shock, vibration
  • Tilt, motion
  • Light intensity
  • Temperature (including dew point)
  • Humidity

Benefits of using IoT tracking devices

Numerous advantages are coming out of real-time location and conditions tracking. A business will not only acquire data but can also use them to:

  • calculate or even predict the time needed to reach certain destinations (and compare & optimise the routes),
  • get notified about potential problems as soon as they occur and take actions fast to prevent the delays,
  • inform the recipient of the shipment in advance about delays and measures taken,
  • prevent theft,
  • diagnose or predict harmful conditions during transportation and prevent damage that may result from them,
  • compare and evaluate logistics partners,
  • calculate the losses due to the delay in delivery,
  • understand better the problems that have occurred to better plan the processes
  • and much more.

Such automation brings savings by preventing your cargo from theft attempts or inconvenient environment. Instead of manual reporting, you get a piece of digital information transmitted live to your logistics systems.

In addition, with such devices, you can track the location of your shipments in a real-time and be independent from information from 3PL systems, which is usually not showing precise location but some checkpoints, that might be even outdated (some 3PLs do not even provide an option to get shipment information).

Limitations of using IoT tracking devices

At this time, you probably ask yourself – why don’t we all already use these IoT devices for tracking?

Well – there are several reasons for that.

First – each IoT tracking device is quite costly. Simpler one-use trackers that are useful on routes that take maximum a couple of days cost at least several USD per unit. And more durable or multiuse trackers can cost up to several hundred USD each, and may require regular maintenance, charging and organising the process of reverse logistics.

Also, even a good tracker does not guarantee real-time data transfer everywhere – coverage and availability of communication infrastructure is a challenge not only at sea, but even in many rural areas in countries with generally a well-developed infrastructure.

Finally – sometimes it is simply pointless to invest in IoT. If you know that the vessel with your container has 3 days delay in the middle of Indian Ocean, you can usually just acknowledge it and do nothing more about it. In this case using special trackers is just an unnecessary expense. Especially that, in this case, you could use other, 3rd party data, to learn about it.

Chapter VII

Achieving supply chain visibility with IoT. Theory and practice

According to the Bluetooth Special Interest Group, 48 billion devices will have internet access by 2021. The majority of those devices will no longer be computers or smartphones but automobiles, machines, personal possessions, and appliances that communicate with each other, usually wirelessly. That number represents a ten-fold increase in connected devices over today’s levels

The logistics industry is constantly evolving thanks to technology. Internet of Things has made its way into containers, trucks, production lines and shipments for good.

IoT devices continually transmit million bytes of data to control product and delivery statuses and improve visibility in supply chains.

Important! We should distinguish IoT from IIoT – Industrial Internet of Things.

The aim of IIoT is to monitor the supply chain, while increasing the effectiveness of manufacturing or management system. IIoT devices have more sensitive sensors, including more location-aware technologies while IoT is most common for consumer usage. The quality of analytical processes taking place inside IoT platforms also differs. Due to the amount of data generated, IIoT will be associated with Big Data, cloud computing, Machine Learning and Artificial Intelligence. For the sake of simplicity, we will use the term IoT.

How logistics achieve visibility with IoT?

Attached to machines, trucks, containers, and packages, the IoT devices help obtain unprecedented insights into logistics operations and help spot and solve many problems within the whole supply chain.

Supply chain visibility gained new possibilities with IoT. Internet of Things in logistics makes it possible to:

  • monitor the physical location of goods and assets (jump to: IoT challenges),
  • monitor the environment in which the goods are transported or stored,
  • manage traffic,
  • alarm when the fleet or production equipment requires attention (maintenance, violations),
  • help to optimise processes, e.g., shipping goods.

How is this done?

  1. Sensors collect relevant data (e.g., recognise the location, diagnose movement/no movement, measure the temperature inside the refrigerated vans).
  2. The devices send data (usually wirelessly, via 3G, LTE, 5G, …) to the IoT cloud platform.
  3. The platform processes and integrates data obtained from many IoT devices. It can additionally integrate it with data from different systems.
  4. The data is analysed and displayed upon the user’s request in the application.
  5. The data is spread across the network of other IoT devices to increase the visibility of information in the supply chain.

IoT platforms are responsible for collecting, processing, securing and integrating data from various sources.

In order to show actionable information in real-time (upon the user’s request), the platform may also automatically analyse the data.

IoT challenges

Bringing connectivity everywhere presents a significant challenge for the logistics industry.

Consider problems of coverage in many geographical locations, signal interferences and the impact of the mode of transportation on the performance of IoT devices, and it should not surprise you that your supply chain visibility may be… incomplete.

1. Tracking on sea

Containers transported on ships and equipped with intelligent tracking devices are still not that popular. Location on the world map is pretty difficult to obtain directly from the trackers, because of the limited cellular signal coverage on sea.

Furthermore, the temperature inside of a container, humidity, shock, noise and the presence of lots of large metal objects around the trackers influence the devices’ operation and distort the signal.

In this case tracking the vessel’s position on sea by using data from the official AIS satellite systems makes definitely more sense.

And the devices in the containers are more useful for gathering data on your load conditions, which can be retrieved after the container is unloaded on the shore.

The devices mounted in containers are also still useful for tracking the assets’ location and utilisation on land, including checking if they were loaded on a vessel and unloaded in the port of your choice, and nowhere else.

2. Tracking in air

Using IoT devices for tracking air-shipments can also be challenging. Based on signal coverage during the flight, the obtained data on location or shipment conditions can be sent with a significant delay, if at all.

But in this case the biggest challenge is compliance with airlines guidelines. Because IoT tracking units contain batteries, the devices might not be allowed on board.

And an airline may require that they are turned off or placed in airplane mode during the flight. It varies from airline to airline, so you should check it before you decide to use an IoT tracking device.

As with the case with the vessels on the sea, during the flight you can track your shipments by tracking the planes’ location in dedicated systems.

3. Battery life

Another challenge is battery life. Different devices have different battery types that can discharge during the process of transportation.

Based on the battery capacity and frequency of gathering and sending data, the devices can operate from several hours to several years. Remember that before you pick the right device and settings for your shipment.

We compared popular IoT tracking devices from Kizy Tracking, Cellocator, TrustedGlobal, Logmore and LightBug to see which is the best. Here you can read the blog post about their physical parameters and here you can download the report Independent tests of location tracking devices. 

4. Data transfer delays on land

Not everywhere in the world the Internet bandwidth allows for a fast transfer of massive data volumes.

5G (NR) networks, the successors of 4G (LTE), are already operating in many countries, but the southern hemisphere of the Earth, and also rural or lightly populated areas around the world, are not at this well-connected.

Hence, there will be delays in data transmission.

Improve your supply chain visibility with IoT

Despite challenges of visibility in specific cases, there are many areas where IoT covers informational needs.

Emerging logistics business models and ideas are the motor for technology changes – and vice versa. Tracking and tracing the shipments and cargo is the fundamental feature, but there are plenty more use cases.

Food and temperature control

A trucker with 200 kg of ice cream in the cold room truck enters the city centre. Unfortunately, on the last mile to his destination point there is a problem with a road which is under construction. The driver needs to find another way to get to the shop or else the temperature-sensitive cargo will melt away.

  • IoT sensors monitor in real-time what is the temperature in the cold room and send alerts when there are no optimal conditions for ice cream

Medicaments and vehicle accidents

The ordered batch of drugs is transported to the hospital. On the way, however, the driver had to brake harshly and finally hit the railings by the road.

  • During the transit, a vehicle’s location was monitored with GPS, thus you know the exact place of an accident. Sensors attached to drug packages note if there is any open and exposed to light. Thanks to RFID tags it is easy to distinguish those packages.

Drugs and inventory control

For some patients taking their drugs regularly is essential. A medical centre that does not have an optimal drug inventory level puts patients at health risk.

  • The warehouses in hospitals are easier to maintain with IoT. Based on the business rules orders for manufacturing drugs can by planned ahead and placed without time hazard.

Outlook

Nowadays, many companies want to become flexible and make strategic decisions based on reliable information, not gut feelings and individual experience. It becomes possible when basing on data acquired in real-time or from the past. To improve supply chain visibility, you can use barcodes, RFID, NFC and IoT devices, data integrations, software solutions and other technologies. The trick is to recognise your goal and customise a solution to your needs.

Visibility is being considered one of the top priorities across industries to achieve success. It is certain that supply chain visibility will grow in prominence over the coming years.

By providing valuable information, supply chain visibility pushes forward the concept of using advanced analytics to improve business strategies. And in the future, those advanced analytics will transform into predictive analytics, and also lay the basis for automation of processes within the supply chain.

Related reports and eBooks

location tracking devices tests report

Location tracking devices tests

Detailed report about five trackers for logistics: Kizy, Logmore, Trusted, Cellocator and LightBug

tracking technologies ebook

Tracking technologies in 4.0 era

In-depth ebook on the future of tracking technologies for assets, shipments and fleets

new business models in logistics ebook

Emerging business models in logistics

New business models, challenges and opportunities for the upcoming years in the T&L industry covered in a free ebook

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