Digitalization in logistics - How IoT is changing an industry

Logistics is one of the largest and most dynamic industries and therefore also one of the industries that benefits most from digitalization through IoT solutions. But in which areas are IoT solutions used and which solutions are available? Find out in this article.

Logistics, i.e. the planning, coordination and control of the flow of products, raw materials and information, is indispensable for the economy. In Germany alone, the logistics industry turned over around 279 billion euros in 2020 (source: Statista - Sales of the logistics industry in Germany), making it one of the three largest industries in Germany. Hardly any other industry holds more potential for the use of intelligent solutions, because countless process data are generated along a supply chain. In other words, there are countless opportunities to network processes and optimize operations.

But why is the digitization of logistics so important?

The logistics industry has been on a growth course for years, with Corona playing a major role in the industry's 26.5% growth in 2020. Further growth is also expected in the coming years thanks to e-commerce. The increased volume requires companies to work ever more efficiently. This in turn requires transparent processes, because efficiency depends heavily on the clarity and networking of a supply chain. There are numerous advantages that networked supply chains bring with them:

• Cost savings: The avoidance of unnecessary transport, optimization of delivery routes and better capacity utilization ensure cost savings. In addition, inventories can be optimized and the associated costs reduced.
• Increased speed: One of the most significant advantages of digital logistics is speed, which can be significantly increased through full networking. Digital solutions collect data, evaluate it and deliver optimized results for storage or transport.
• Reduction of error-proneness: Digitization replaces paper and analog planning charts. This reduces sources of error and processes can be called up digitally at any time.
• Environmental protection: Digital assistants report optimal routes as well as suggestions for improving the driver's driving style.

What are the options?

IoT systems can add value to logistics processes in a wide variety of places. In the area of freight, for example, goods are networked with trackers or beacons. This prevents loss or damage to the goods and provides transparency along the entire supply chain. Trackers can provide great added value, especially in the area of food logistics. The continuous recording of temperature and humidity by means of sensors fulfills fully automated documentation requirements for temperature-controlled transports. At the same time, the trackers ensure the safety of the food.

The IoT also makes everyday life easier in transport vehicles. Here, data on the status of vehicles can be used to maintain them in advance (predictive maintenance). This saves costs and, above all, time-consuming breakdowns.

Not least in the area of order picking, IoT systems speed up processes. Here, for example, pick-by-light systems ensure higher speeds by providing visual signals to indicate the correct compartment to the pickers. More comprehensive systems also indicate the correct number of items.

The possibilities are many and the ever-increasing volume of goods to be processed requires the logistics company to work ever more efficiently, because outdated technologies and processes are no longer competitive.