Summary

$225B annually is lost in worldwide supply chains. This blog investigates what is missing to mitigate an important part of these losses.

Challenge

Market research estimates annual worldwide supply chain losses at $225B, spread across spoilage in transport of pharmaceutical products and food, damage during transport and storage, theft, and logistical inefficiencies.

Most supply chain monitoring solutions today cannot effectively mitigate these losses. They monitor events that cause losses, such as temperature excursions or physical impact. However, they fail to give insights in the circumstances leading up to the loss. Understanding these circumstances is paramount to installing measures that will mitigate future losses.

We can break down the missing elements to understand the loss generating circumstances:

  • Lack of end-to-end tracking: Many solutions monitor only a single mode or leg of the transportation, such as the temperature inside the reefer truck. This leave gaps where the goods are not monitored, such as during other transport modes, transshipment, or storage.
  • Too much unnecessary human interaction in the supply chain: Many monitoring solutions rely on human interaction to complete the monitoring process. One example are USB-based temperature loggers, which require manual uploading of the data at the destination. Another example are GPS trackers that assume delivery as soon as they sense proximity to the destination location, irrespective whether an unloading event has occurred or not, and still requiring the operators to manually confirm delivery. Industry experts agree that the human factor accounts for more than half of all losses, some quoting numbers as high as 90%. Introducing manual steps in the monitoring process only shifts the problem rather than getting rid of it. Only a truly touchless solution can guarantee loss mitigation.
  • Key events in the supply chain are not being monitored and analyzed: Most solutions are good at recording telemetry, such as temperature or shock. They fail to record key events that are of critical importance to the logistics service providers and their customers. These key events include departure of a package or pallet, delivery at the expected or at an unexpected destination, shipment separation and warehouse movements.

Solution

An effective loss mitigating solution must tackle all problems discussed above at once to recreate the circumstances leading up to a loss and pointing towards loss-mitigating measures.

The solution to providing end-to-end monitoring is to monitor the packages or the pallet rather than the vehicle, such as the reefer. Package-level monitoring also puts the 3PL, the manufacturer and the buyer in charge rather than the transporter. They stand to lose the most when losses are incurred.

To provide a touchless experience, all key events, such as the delivery of a shipment, need to be recorded without any human interaction and with an accuracy of 99.9% or higher. Only then will the solution rule out the human factor and instill sufficient faith in the technology to be relied on.

Telemetry data, such as temperature and shock, can detect losses such as spoilage and physical damage, but cannot mitigate the problem by themselves. Accurate information about where the goods are in the supply chain is essential to understand where, under which circumstances and why the problem occurred. As an example, when a temperature excursion occurs and to avoid future excursions, one needs to know if the excursion occurred during transport, during unloading or in storage at the warehouse. The same holds for damage from a shock: Shock during transport can occur from inappropriately tying up goods in the truck or from driving on degraded roads; shock during unloading results from inappropriate unloading practice; shock in the warehouse often stems from a forklift impact.

The key to gaining an unambiguous understanding of the where and the when is to interweave telemetry data with key events. Key events include departure, loading, unloading (at the intended or at an incorrect location), shipment separation, warehouse movements, and storage.

Only through correlation of the telemetry data with the key events can future losses effectively be mitigated.

Product in the Picture

The RL4 multi-sensor device is RedLore’s flagship multi-sensor device, aimed at package-level, end-to-end and touchless shipment monitoring. It is one of the industry’s most complete condition monitoring device, measuring temperature, humidity, fall, lateral, impact, vibration, tilt, eCO2, VOC, light level, sound level and magnetic field.

The RL4 also embeds the intelligence to detect the key events during a shipment and generates alert when pre-set conditions are breached.

Why RedLore

RedLore is specialized in advanced solutions for mitigating supply chain losses. The solution gives logistics providers and their customers direct control and insights by offering and end-to-end, touchless monitoring experience, that accurately tracks key events.

RedLore’s products embed patented Machine Leaning algorithms that not only generate alarms when telemetry data if off but also build insights into the circumstances leading up to the alarms. RedLore’s algorithms are distributed in nature, in that sensor devices combine their knowledge to generate insights which cannot be derived by a single device.