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Supply chains belong in the cloud

June 6th, 2014 by - 2,416 views

Transportation experts already use bar codes and radio transmitters to keep track of outbound and inbound materials. However, third-party logistics providers may need to employ cloud computing to keep pace with a clientele that primarily consists of nationwide retailers.

A commercial truck transports goods on an interstate highway.

A commercial truck transports goods on an interstate highway.

Merchandisers have realized that aggregating data from numerous sources and then transcribing it into actionable information is a process that will allow them to remain competitive. A portion of that intelligence is collected from hundreds of thousands of daily eCommerce orders, which is then transferred to supply chain professionals in charge of shipping each item to customers across the country.

Leveraging surveillance 
The aforementioned process enables logistics experts to accurately predict future consumer demand and initiate deliveries the instant an order is made. Distributing that huge amount of tangible capital from region to region requires comprehensive, real-time oversight to optimize efficiency and stay one step ahead of criminals interested in stealing freight. This high level of surveillance is provided via Internet-connected devices installed on each asset (trucks, forklifts, pallets, individual packages, etc.).

According to Tech Radar, a report conducted by Gartner suggested that the number of mechanisms capable of communicating with the Web will reach 26 billion by 2020, 25.1 billion more than the amount that existed in 2009. The firm noted that although this growth presents a great opportunity for companies to obtain a wide variety of information, it also will pressure on-premise data centers trying to adequately handle an expanding amount of data at a faster pace. Aside from the amount of intelligence that’s projected to become available, the sophistication of such devices must be put into perspective, noted Gartner’s Managing Vice President Michael Burkett.

“Some IoT [Internet of Things] devices are more mature, such as commercial telematics now used in trucking fleets to improve logistics efficiency,” said Burkett, as quoted by Tech Radar. “Some such as smart fabrics that use sensors within clothing and industrial fabrics to monitor human health or manufacturing process are just emerging.”

Applying them to logistics 
The fact that distributors are already using IoT is definitely a step in the right direction, but many are still stuck with on-premise technology that’s preventing them from using more Internet-connected devices. Moving to cloud hosting will enable logistics companies to make the most of their data collection efforts and provide them with an environment capable of supporting complex analytics programs.

Suzanne Heyn, a contributor to Inbound Logistics, claimed that applying machine-to-machine (M2M) communications and Web-based transactions to distribution also makes for a more secure, robust supply chain. Pfizer, a pharmaceutical company headquartered in New York City, puts a lot of stake into protecting its assets while they’re in transit. Director of Global Conveyance Security Bradley Elrod told Heyn that the enterprise uses a mixture of real-time tracking devices and mechanisms producing point-to-point information.

Elrod acknowledged that such technology isn’t applied to every shipment. Deciding which cargo gets the most tracking attention is largely based on what’s being transported. For example, there’s less risk involved with delivering a shipment of allergy medicine than with freight containing Oxycodone or other prescription drugs that criminals covet and that costs more to manufacture than Sudafed or Allegra.

Unfortunately, gangsters and seasoned hoodlums also keep up with the times and could potentially identify a tracking system and simply disconnect it. Heyn noted that there’s a solution to this problem. Organizations like New Jersey-based M2M producer Orbcomm have created a system that notifies cloud server administrators whenever a trucking container’s transmitter has been compromised and notifying the company that owns the vehicle the minute the damage occurs.

By adapting to the new business environment and moving to a cloud-based technology solution, logistics businesses will be able to remain competitive on the road as well.

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