Deutsche Post DHL and Cisco are looking at how IoT will unlock extra value in the supply chain and logistics sectors

DHL and Cisco, which are collaborating on a joint Internet of Things initiative looking at how IoT can improve decision-making in warehouse operations, claim the technology could give A $1.9tn boost to supply chain and logistics operations.

The two companies, which recently inked a report on IoT in logistics, are looking at how IoT sensors strategically embedded in warehouse inventory, stock locations and vehicles and connected to cloud-based services via Wi-Fi can improve warehouse operations through the use of analytics.

“At Deutsche Post DHL Group we have a deeply held belief in the positive powers of global trade. Yet, as our Global Connectedness Index 2014 revealed, the overall level of global connectedness remains surprisingly limited,” said Ken Allen, chief executive officer of DHL Express and Board Sponsor Technology.

“There is huge potential for countries to further increase their connectedness and prosper through trade, integration and technology. We believe the Internet of Things will be a primary enabler of this global transformation,” Allen added.

The companies said there is potential for IoT to expand beyond the warehouse and into supply chain,logistics operations and freight transportation, and could have a “game changing” impact on ‘last mile’ delivery for consumers. Cisco reckons that value to sit in the region of $8tn worldwide over the next decade.

But Markus Kückelhaus, vice president Innovation & Trend Research, DHL Customer Solutions & Innovation said there’s still much to do before that value can be realised.

“The Internet of Things is the connection of almost anything – from parcels to people – via sensor technology to the web and both Cisco and DHL believe this will revolutionize business processes across the entire value chain including supply chain and logistics,” Kückelhaus  said. “We’ll need to understand how all components in the value chain converge and this will require a comprehensive collaboration, participation and the willingness to invest to create a thriving IoT eco system for sustainable business processes.

Chris Dedicoat, president, EMEAR for Cisco said: “Digitization and the expansion of the Internet of Things is a catalyst for growth, which is driving new economic models and enabling organizations to remain competitive and embrace the pace of change happening globally. This report clearly demonstrates that digitization and the IoT will deliver long term efficiencies and growth opportunities across a wide range of industries.”