Introduction

The logistics and transportation industry is faced with immense challenges as the global economy becomes increasingly complex and interconnected. Despite the fact that the supply chain ecosystem is diversifying dramatically, the industry has relied on the same limited RFID/Bluetooth/cellular technology to track assets – through multiple stages – before reaching (or not!) their final destination. The main issues with these technologies are that: the tags only provide limited information; expensive site-specific infrastructure is usually required; the network management and connectivity costs along with insufficient battery life make the business cases unfeasible. Considering all of this, it becomes apparent that traditional tracking technologies are not fit for purpose. A more innovative solution is required to relieve the pain points of supply chains that are only as strong as their weakest links. By leveraging the power of IoT, VT smart logistics tracking is enabling a leaner, more agile supply chain.

The Eggs-iting chicken coop, connected by Sigfox, creates a virtuous circle

The Challenge

The logistics industry needs real-time visibility of all assets at every point throughout their journeys. For example, the inability to monitor and track returnable transport units (RTUs) within the supply chain results in significant annual asset replacement costs due to loss and also theft. Another avoidable leak in the operational cost base of transportation businesses is caused by inefficient management of the flow of assets in the field and delays in turnaround times. The barriers to aleviating the headaches associated with traditional tracking technologies are generally associated with mobility, reliability, scale and cost.

The Solution

With the advance of revolutionary Internet of Things (IoT) technology, the logistics and transportation industry finally has the solution it needs to overcome the obstacles within the supply chain. Now businesses can monitor and track their assets with control tower visibility everywhere, even outside their own supply chain. Sigfox, the global communications service provider for IoT, has eliminated the barriers associated with traditional tracking technologies: price, battery life and coverage; by providing low cost, low power connectivity over a single global network.

VTag is an IoT tracking device that has been designed specifically to empower the logistics and transportation industry by harnessing the capacity of the Sigfox Low-Power Wide-Area Network. It provides a solution to the loss and inefficiencies due to the inability to manage, view and control supply chain assets.

VTag is a low-power, battery-operated tracker that is easily and securely attached to any asset. VTags are versatile and can be transferred from one asset to another as required.

Unlike most first-generation smart devices, VTag doesn’t rely on Wi-Fi or 4G. The device is plug and play. It connects with the Sigfox low-power network which is live and nationwide meaning there is no need for network set up, pairing or the deployment of infrastructure. The solution removes all the traditional inconveniences associated with gateways, readers, sim cards and beacons as the Sigfox network is already established and communicating with millions of devices across the world right now. Simply attach and track! The device uses GPS for outdoor tracking and Wi-Fi scanning and/or BLE scanning for indoor tracking. VTag works in any country worldwide which has Sigfox coverage.

Data from the tracker includes location, battery status, signal levels, motion and tampering status. The method and frequency of data is configurable and optimised to suit the type of asset being tracked. We always aim to match the battery life of the device with the operational life of the asset. Attach and track for the life of the asset!

Data is visualised on a web application which has been designed for control tower visibility over high volumes of supply chain assets. By linking the asset location with points of interest such as depots or customer locations, logistics managers can monitor how long their assets have been in a location to reduce leakage and improve turnaround times.

Each device operates for 7-15 years on a single set of batteries without recharge. Battery life is a function of battery type/size, data transmission frequency and type of location tracking technology used (GPS/WiFi/Bluetooth).

Example of a Real Life Scenario

 

A large FMCG distributor employs 300,000 roll cages in their supply chain network every day to deliver goods from their distribution centres to over 1,000 retail stores. Each cage is valued at €100 translating to a total asset value of €30,000,000.

The distributor has no visibility over their cages once they leave the centres and this results is serious financial and operational challenges.

 

  • Annual Financial Loss due to Asset Theft

Once the cages are delivered to the retail store they are unloaded and remain at the store until they are collected by the distributor.  This can take up to 4 weeks. The cage is invisible and outside the control of the distributor during this period. This lack of control when the cages are at 3rd party locations results in 20% loss annually due to commercial theft. Once stolen and outside of the distributors network, the assets are usually never recovered. 20% leakage on 300,000 cages equates to year on year replacement costs of €6,000,000.

 

  • Annual Capital Over-expenditure due to Inefficient Turnaround Times

As there is no visibility of the cages the distributor cannot monitor or control their location. They depend on drivers to recover them as and when they come across them. At any one time, the majority of the distributor’s cages may lie redundant at 3rd party locations for extended periods, unavailable for use by the distributor. Because of this, the number of cages procured for their fleet is often surplus to requirements. Businesses are constantly throwing good money after bad in an attempt to meet the demands of their network. On average, the cages spend 14 days idle at 3rd party sites and 7 days at distribution centres waiting to be used. This inefficiency equates to over-stocking of cages by 50% at a cost of €15,000,000.

 

  • Unnecessary Annual Operational Expenditure due to Inefficient Handling

The mismanagement of such a large fleet of assets caused by limited visibility creates a surge in operational handling costs. Trucks are deployed daily to go on blind runs to recover cages from sites they are suspected to be at. Drivers are required to manually scan cage barcodes at the drop-off location in a futile attempt at cage management. Finance teams endeavour to recoup some of the costs by billing customers for unreturned cages. At peak times, distributors are forced to buy or lease cages at short notice to meet demand, paying a premium for the service.  Valuable time and resources are wasted trying to ensure sufficient assets are available for use in the network each day. Over the 5-year lifespan of the cage, these costs can add up to at least the value of the cage itself. In some cases, they are multiples of the cage value, depending on the specific circumstances involved. Annual operational inefficiency costs equate to 300,000 x €100 / 5 years = €6,000,000

 

To summarise:

 

Annual Cost of the Cage Problem

 

Fleet Size: 300,000

Loss/Theft: €6,000,000

Immobilised Capital: €15,00,000

Inefficient Handling: €6,000,000

Total Cost: €27,000,000

 

Cost of the Cage Problem over the 5-Year Lifespan of the Cage:

 

Fleet Size: 300,000

Loss/Theft: €30,000,000

Immobilised Capital: €15,000,000

Inefficient Handling: €30,000,000

Total Cost over 5 Years: €75,000,000

 

Thanks to our VTag solution, customers can expect a ROI in less than 12 months.

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