Leveraging IoT for Performance Enhancement of Logistics: Case of a Multinational Company

The implementation of the Internet of Things (IoT) in logistics has the ability to transform the whole logistics industry by improving business models, operational efficiency, traceability, security, and customer experience. The manual logistics process causing a lot of late deliveries, wrong deliveries, and line stoppages in a multinational automotive company. That led to the pursuit of this research work to convert the manual call-off process to a fully system-controlled process. The main objective of this research was to implement system-controlled warehouse call-offs and scheduling processes to reduce line stoppages caused by late and incorrect delivery of parts to the line, as well as hot call-offs, and to improve the overall efficiency of line supply routes. The introduction of IoT in the warehouse comes with a takted process, meaning that each step of the line supply process is timed. The process introduces scanners to support process confirmation and link every process step to System Applications and Products in Data Processing (SAP) to allow for traceability. The interconnected devices and system in this study connect line-side reality (using Rapid Frequency Identification (RFID), optic sensors, and the Integrated Production System Logistics (IPSL) bill of material information) with the SAP demand and part requirements. The IoT implementation results show a great improvement in the overall logistics of line supply processes. A decrease in line stoppages is witnessed, with a reduction of 69%, and line-side confirmation makes tracing easier, thereby enhancing process transparency. The addition of scanners provides line supply employees transparency with respect to where parts are going, further reducing the probability of wrong deliveries. Waste reduction is also a result of this research, as the takted processes allow for time saving on the round-trip time, which is reduced by 32%. Conclusively, this research adds to the expanding corpus of research on the application of IoT in logistics and offers useful advice to policymakers and logistics managers who wish to integrate IoT technologies into their operations.