Question

A. The Internet has a huge influence on Logistics; define the Internet of things (IoT), its benefits and use an example of IoT and how it is used in Logistics.


B. Discuss the four types of benefits that can be gained from the use of Electronic procurement or E-Procurement.

Answer 1

Answer A.

Meaning and Definition of IoT - In the broadest sense, the term IoT encompasses everything connected to the internet, but it is increasingly being used to define objects that "talk" to each other. "Simply, the Internet of Things is made up of devices – from simple sensors to smartphones and wearables – connected together.

By combining these connected devices with automated systems, it is possible to "gather information, analyse it and create an action" to help someone with a particular task, or learn from a process. In reality, this ranges from smart mirrors to beacons in shops and beyond.

"It's about networks, it's about devices, and it's about data," Caroline Gorski, the head of IoT at Digital Catapult explains. IoT allows devices on closed private internet connections to communicate with others and "the Internet of Things brings those networks together. It gives the opportunity for devices to communicate not only within close silos but across different networking types and creates a much more connected world."

Benefits -

Communication

IoT encourages the communication between devices, also famously known as Machine-to-Machine (M2M) communication. Because of this, the physical devices are able to stay connected and hence the total transparency is available with lesser inefficiencies and greater quality.

Automation and Control

Due to physical objects getting connected and controlled digitally and centrally with wireless infrastructure, there is a large amount of automation and control in the workings. Without human intervention, the machines are able to communicate with each other leading to faster and timely output.

Information

It is obvious that having more information helps making better decisions. Whether it is mundane decisions as needing to know what to buy at the grocery store or if your company has enough widgets and supplies, knowledge is power and more knowledge is better.

Monitor

The second most obvious advantage of IoT is monitoring. Knowing the exact quantity of supplies or the air quality in your home, can further provide more information that could not have previously been collected easily. For instance, knowing that you are low on milk or printer ink could save you another trip to the store in the near future. Furthermore, monitoring the expiration of products can and will improve safety.

Time

As hinted in the previous examples, the amount of time saved because of IoT could be quite large. And in today’s modern life, we all could use more time.

Money

The biggest advantage of IoT is saving money. If the price of the tagging and monitoring equipment is less than the amount of money saved, then the Internet of Things will be very widely adopted. IoT fundamentally proves to be very helpful to people in their daily routines by making the appliances communicate to each other in an effective manner thereby saving and conserving energy and cost. Allowing the data to be communicated and shared between devices and then translating it into our required way, it makes our systems efficient.

Example of IoT -

Pretty much any physical object can be transformed into an IoT device if it can be connected to the internet to be controlled or communicate information.

A lightbulb that can be switched on using a smartphone app is an IoT device, as is a motion sensor or a smart thermostat in your office or a connected streetlight. An IoT device could be as fluffy as a child's toy or as serious as a driverless truck. Some larger objects may themselves be filled with many smaller IoT components, such as a jet engine that's now filled with thousands of sensors collecting and transmitting data back to make sure it is operating efficiently. At an even bigger scale, smart cities projects are filling entire regions with sensors to help us understand and control the environment.

How it is used in Logistics -

The Internet of Things (IoT) is revolutionizing the logistics industry. By connecting nearly everything from parcels to people, the IoT is enabling supply chain and logistics companies to track and trace freight in real time, make data-driven decisions that improve operational efficiency, perform predictive maintenance on assets and infrastructure, and much more. In fact, industry experts estimate the IoT will drive more than $1.9 trillion in value within supply chain and logistics by 2020.

Take for example the Hamburg Port Authority (HPA) in Germany. HPA is the largest port in Germany and the 14th largest in the world. Ten-thousand ships enter it each year, and 83 rail transport companies operate at the port. More than 132 million tons of freight travel through HPA annually and use is growing fast—the port processed 8.9 million TEU in 2016, and expects that figure to double by 2025. Yet, because the port is located near downtown Hamburg, it cannot expand beyond its current footprint. As a result, HPA needed to become more efficient within its existing boundaries. Using IoT technologies and sensors, HPA was able to create a more intelligent and automated harbor operation to improve traffic flow and move freight in and out more quickly.

IoT is making supply chain management less challenging and more efficient, providing companies an opportunity to expand beyond bounds. In fact, logistics is one of the primary sectors to embrace IoT with such an open heart. And why shouldn’t it? With the ability to improve operational efficiency and enhance revenue opportunities, IoT has the power to revolutionize the supply chain sector within the next few years.

As data-driven technology, IoT in logistics allows extraction of data from every entity part of the loop. For logistics and supply chain companies, availability of a larger set of real-time data and the ability to analyze it can improve the strategic decision-making capabilities.

Answer B - Four types of benefits that can be gained from the use of Electronic procurement or E-Procurement.

1 Reduced Costs

E-procurement saves you money by preventing duplicate spending, leveraging volume buying, and saving you costs associated with paper-based systems (for example, the cost of stamps to mail your paperwork).

2 Transparent Spending

Electronically conducting your procurement makes it easier to write and analyze reports on your procurement systems, meaning you can ensure that your procurement procedures conform to your policies.

3 Increased Productivity

Once you’ve learned the system, e-procurement is less time-consuming than traditional procurement. Having your records stored electronically makes it easier to submit reusable tenders. Meanwhile, use of templates means paperwork can be filled out more quickly.

4 Eliminating Paperwork

Tired of finding new space to store all that paperwork? With e-procurement, everything can be saved and stored electronically. This not only saves you from needing more room, it also makes the process of finding older tenders more simple.