Logistiek, the Netherlands: Cognizant’s Global Head of Innovation, Manufacturing and Logistics Says Connected Infrastructure and IoT are Changing Logistics

“eCommerce customers are increasingly demanding more from their logistics partners who, in turn are looking at the most effective ways to meet these expectations,” says Prasad Satyavolu. “Perhaps unsurprisingly, one of the biggest enablers in the successful transition from legacy EDI systems to real-time eCommerce is the much talked-about Internet of Things (IoT) enabling the proposed connected infrastructure.” Excerpts:

“These disruptive technologies, which include social, cloud, analytics and mobile (SMAC) capabilities coupled with sensors, can help in collecting data easily and help in forecasting and planning agile logistics with real-time analytics and mobile integration. However, companies will need to invest in and wisely implement these technologies in order to make the most of them. So what kinds of challenges do companies and suppliers need to be aware of when first considering such changes?

The rapid proliferation of these technologies is impacting logistics in every area, and, as a result, the way goods are transported is affected. As an example, consider the implications for ocean liners and manufacturers alike due to the growing emphasis to manufacture and produce entire products in the location of sale.  This is a result of European companies setting up new manufacturing facilities in the US or Mexico to cater to North American demand. Consequently, ocean liners will have to adapt the way they operate. Instead of transporting the finished product such as cars to the country where they will be sold, only parts, CKD (Completely Knocked Down) or SKD (Semi Knocked Down) kits or spare parts will be shipped and the products will be assembled locally. The economics of such strategies are rooted in changes in labour costs as well as local demand sensitivity to taxation rules.

By using cloud-based technology to access relevant data and sensors to determine the location of specific goods and when they will arrive, it is possible to track drivers and communicate with them in real-time, gauge conditions and provide the driver with real-time updates. The driver, in turn, can change the route, if necessary, potentially saving fuel at the same time.

SMAC and sensor technologies will make it possible for companies to gain competitive advantage and new levels of profitability by dramatically lowering costs through enhanced efficiency, reduced inventories and lower transportation expense. With increasingly collaborative platforms and services connecting suppliers, customers and transportation companies, legacy applications for order management and procurement will get phased out.

Modernizing and fully embracing the digital, real-time age is key in the next couple of years. Logistics companies need to make use of these technologies to save time, make faster deliveries and ensure satisfied customers.”

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