Transforming supply chains: how asset tracking can help you keep up

Over 1.7 million packages go missing in the U.S. every day, according to a study by the New York Times. This is not an isolated issue. Research suggests that 10% to 40% of supply chain assets are lost each year globally through misplacement, theft or breakage. How can smart asset tracking play a significant role in addressing this problem?

Supply chains have been transformed beyond recognition over the last year. Forecasts from eMarketer suggest that global ecommerce sales will increase to 16% of all sales in 2020. This is an increase of 19%, driven by the rapid shift in buyer behavior due to social distancing and lockdowns.

Curbside pickup, BOPIS (Buy Online, Pickup in Store), shipments to neighbors, smart lockers, as well as direct to consumer (D2C) deliveries by manufacturers have become commonplace. Even perishable goods are in high demand with the advancement of more robust cold chains solutions (also known as fresh chains) for categories ranging from pharmaceuticals to meal delivery services.

This is creating demand for smart asset tracking, enabled by the Internet of Things (IoT) and GPS (Global Positioning System) solutions, to help reduce the loss of goods through misplacement and theft and to identify where in the chain damage occurs.

Where is asset tracking today?

According to the latest World Bank Logistics Performance Index (LPI), which measures all major countries' logistics capabilities, "track and trace" is one of the six strength indicators that make countries attractive and practical to source goods from.

New digital advances like the convergence of the Internet of Things with artificial intelligence (AI) and blockchain mean you can now communicate multiple characteristics of an asset. These include the position, status and quantifiable data like temperature, speed and provenance.

Orange Business worked with research firm Longitude to study these trends. According to the report, Real-time intelligence and the future of supply chains, only 45% of companies today use real-time data insights for better decision-making. This figure is forecast to double within the next two years. In fact, 80% of the multinationals surveyed believe it is vital to empower employees and supply chain partners with data insights. Companies could be getting much more out of connectivity and real-time data across their supply chains.

Asset tracking

Orange customers forging ahead

Orange customers have developed many exciting asset management use cases by installing sensors and communication devices. The benefits range from accurate asset tracking to improved inventory management and reductions in shrink (the loss of goods through misplacement, theft or damage) to positively impact the balance sheet.

For example, a world-leading soft drink company deployed smart tracking to enhance its vending machine management. The customer saw up to 30% of its vending machines go missing each year, at a cost of around €700 per unit. The Orange track-and-trace solution, comprising LoRa connectivity coupled with GPS, helped identify when refrigerators were on the move. It led to €1.5 million saved per year by preventing losses and thefts.

Construction company McConnell Dowell deployed a customized IoT platform to track materials, like concrete panels, from the manufacturer to the construction site and into their exact positions within a building or structure. Just-in-time supplies are vital in the construction industry to deliver projects on budget and within tight deadlines.

Many third-party logistics service providers are developing specialist services to meet this need. Often materials can’t be stored on space-constrained sites, so supply chain visibility is critical. It's very expensive to have a construction site at a standstill because you're lacking the correct supplies. So it's well worth the extra logistics costs to have it delivered the same day.

The smart asset tracking solution enables the company to collect, report and visualize real-time information over a private network and has digitized manual, paper-based tasks in the process. The platform gathers together data from multiple devices and sensors and measures asset utilization. The data is then sent over a LoRaWAN back to the company for analysis. This is delivering many benefits, including greater operational efficiency, time savings and cost reductions.

Four components of an asset tracking system

The four central elements of an asset tracking system are:

  1. Tracker: The sensor itself is affixed to the asset to enable it to be monitored and tracked. The tracker sends the asset's location data to a central management center.
  2. Platform: The central management center will typically be equipped with a platform that the company can use for device management.
  3. ERP: Asset tracking should integrate with your enterprise resource planning (ERP) and/or warehouse/inventory management system. It helps you manage maintenance, repair and operations (MRO) more effectively.
  4. Connectivity: The right connectivity is key to effective asset tracking. LoRaWAN connectivity is a logical choice for asset tracking as devices typically have very long battery life, making them ideal for multiple long journeys like the weeks or months in global shipping. According to ABI Research, 82% of original equipment manufacturers (OEMs) in the asset tracking space have now made cellular LPWAN their connectivity of choice.

Devices themselves must be capable of withstanding the rigors of global shipping, so they should be tested and certified for shock, vibration and extreme temperatures. Furthermore, effective asset tracking solutions need to function smoothly across countries and continents without roaming problems or incurring additional connectivity costs: global connectivity is key.

Orange conducted research with 320 multinationals in 18 countries about their supply chain challenges. According to the Real-time intelligence and the future of supply chains report, 64% of firms are reviewing their onshore, offshore and nearshore manufacturing mix as a result of the pandemic, in addition to disruptions from extreme weather events, trade wars and geopolitical changes. Many firms are pursuing a China+2 strategy – sourcing goods from several geo-diversified locations to mitigate risk.

Orange Business is seeing increased interest in smart asset tracking and logistics in a world where consumers expect to receive goods within reducing time windows. At the same time, sensors can track the road, air and sea miles that goods travel to enable the carbon footprint of supply chains to be tracked and shared in a transparent way. Asset tracking, combined with blockchain technology, can also help ensure consumers are more confident about the provenance of their goods and ensure they come from sustainable and ethical sources.

Asset tracking in supply chains can help tackle complex and expensive challenges that were practically impossible to do manually. It helps eliminate inefficient practices and optimize resources and delivers all kinds of new, positive outcomes.

Find out how you can optimize your global supply chain by using real-time data to create a more agile and responsive ecosystem.