What the Relation Between IoT and Logistics

The Internet of Things (IoT) may not sound unfamiliar to those in the IT field. But what exactly is IoT? IoT is a technology that connects objects and allows data to be transferred over a network. How is IoT related to logistics operations? Without realizing it, many logistics activities are already supported by IoT, such as shipment tracking, RFID tags, SECOM, AGVs, etc. At Cakraindo, we have adopted several IoT-supported technologies. Some of them include the following:

1. TMS and WMS

In facts, TMS and WMS are not IoT technologies on their own, but they benefit significantly from IoT integration to boost their efficiency, accuracy, and overall performance in logistics operations.

A WMS helps manage warehouse operations, from inventory control to order fulfillment. When combined with IoT devices like RFID tags, sensors, and automated robots, WMS can improve real-time tracking of goods, automate picking processes, and enhance warehouse layout efficiency. IoT integration allows WMS to:

  • ● Track inventory levels in real-time through smart sensors
  • ● Monitor environmental conditions for temperature-sensitive goods
  • ● Coordinate automated systems like robots and smart conveyors

 

A TMS handles planning, execution, and optimization of the transportation of goods. IoT integration enables real-time monitoring of fleet vehicles, optimizing routes, reducing fuel consumption, and predicting maintenance needs. By using IoT data, a TMS can:

  • ● Provide real-time tracking of shipments via GPS
  • ● Monitor vehicle performance and driver behavior for safety and efficiency
  • ● Predict optimal delivery routes based on traffic and weather data

 

2. SECOM

SECOM is a leading Japanese company renowned for its security solutions, providing a wide range of services aimed at protecting individuals, businesses, and public institutions. Its core offerings include advanced security systems such as alarm monitoring, surveillance, and on-site security personnel. SECOM also delivers emergency response services, ensuring swift action during break-ins, fires, or other urgent situations. In addition, the company has broadened its scope to include cybersecurity, helping businesses defend against digital threats, and offers healthcare services like medical alert systems and remote monitoring for elderly care. SECOM plays a vital role in disaster preparedness by supplying systems that enhance management and response to natural emergencies, ultimately ensuring safety and security during critical times. At Cakraindo itself, we use it in the warehouse for the following uses:

  • ● Facilitating access level control
  • ● Eliminating opportunities for irregularities
  • ● Incident analysis
  • ● Accurate Evidence

 

In a logistics company, the Internet of Things (IoT) is crucial for improving the efficiency of Warehouse Management Systems (WMS), Transportation Management Systems (TMS), and security protocols. IoT-enabled devices, including sensors and GPS trackers, deliver real-time insights into inventory levels, vehicle locations, and handling conditions. This information enhances WMS by refining stock control and tracking, while TMS benefits from improved route planning, predictive maintenance, and fleet management. In terms of security, IoT bolsters monitoring through surveillance, access control, and alerts, safeguarding both goods and infrastructure. By adopting IoT, logistics companies can achieve greater operational efficiency, reduce costs, and strengthen security throughout the supply chain.

Regulatory Changes and Compliance Challenges

As we move into 2024, the global logistics industry confronts unparalleled challenges, primarily driven by evolving regulatory changes and compliance requirements. The dynamic landscape of global trade, alongside efforts toward environmental sustainability and technological advancements, is prompting the introduction of new regulations across various regions, significantly impacting the operations of logistics providers. The swift pace of these developments, combined with the intricate nature of global trade networks, has posed considerable challenges for logistics companies, necessitating rapid adaptation to avoid operational disruptions.

1. The Impact of Regulatory Changes on Global Logistics

In 2024, global logistics is being transformed by regulatory changes focusing on environmental sustainability, worker safety, and data security. Stricter guidelines, such as those reducing carbon emissions and promoting greener supply chains, are being adopted in the EU, North America, and Asia.

Japan’s Green Growth Strategy for 2050 Carbon Neutrality was a policy pushes industries, including transportation and logistics, to achieve carbon neutrality by 2050. As a result, logistics providers in Japan are investing in electric and hydrogen-powered vehicles and adopting smart logistics solutions to reduce emissions. These regulations often require significant capital investments in infrastructure, alternative fuels, and more energy-efficient vehicles, which can strain logistics providers, especially small and medium-sized enterprises (SMEs).

2. Compliance Challenges in an Evolving Regulatory Environment

Compliance has always been a critical concern in logistics, but the growing complexity of regulations in 2024 amplifies these challenges. Key areas where logistics providers face compliance difficulties include:

a. Environmental Compliance

New environmental regulations mandate logistics companies to report carbon footprints, adopt sustainable practices, and invest in renewable energy. This creates a compliance burden, especially for smaller companies that may find it difficult to meet standards due to high costs, while larger firms can invest in technologies like electric vehicles.

b. Customs and Trade Regulations

In the post-COVID era, customs procedures have tightened, introducing new trade documentation and product traceability requirements. Geopolitical conflicts and trade sanctions add complexity to cross-border shipments, requiring logistics companies to manage complicated customs declarations and compliance, raising the risk of delays and fines.

c. Data Security and Privacy Regulations

As logistics companies turn to digital platforms for managing supply chains, data security and privacy concerns grow. Regulations such as GDPR in the EU and CCPA in the U.S. enforce strict data protection standards. Non-compliance can lead to significant penalties and reputational harm, prompting logistics firms to invest in secure technology solutions.

3. Technology as Both a Challenge and Solution

New technologies like AI, blockchain, and IoT in logistics can solve logistical challenges but also create regulatory complexity. Many regions lack clear guidelines on data management, cybersecurity, and customer privacy protection related to these technologies.

4. Conclusion

In 2024, global logistics providers face critical regulatory changes and compliance challenges, including environmental mandates, trade regulations, and data privacy laws. To thrive, companies must adopt proactive compliance strategies, utilize technology, and invest in sustainability, aligning with regulatory demands for long-term success.

How to Conduct a Warehouse Audit

A warehouse audit is a methodical evaluation of a warehouse’s operations aimed at ensuring efficiency, accuracy, and compliance with relevant standards. Regular audits help identify potential areas for improvement, maintain operational excellence, and reduce costs. Below is a detailed guide on how to effectively conduct a warehouse audit.

1. Define the Audit Scope

Prior to initiating an audit, it is crucial to clearly define the operational areas to be evaluated. Common focal points include:

  • Inventory Management: Accuracy, stock levels, and organization.
  • Safety Standards: Compliance with health and safety regulations.
  • Operational Efficiency: Review of processes such as picking, packing, and shipping.
  • Warehouse Layout: Space optimization and effective flow of goods.
  • Technology: The effectiveness of Warehouse Management Systems (WMS) and automation tools.
  • Equipment and Maintenance: Checking forklifts, pallet jacks, and other machinery for functionality and safety.
  • Employee Training and Compliance: Verifying that staff are adequately trained on warehouse procedures, safety protocols, and equipment operation.

Establishing specific objectives ensures the audit remains focused and provides a framework for evaluating key performance indicators (KPIs).

2. Prepare an Audit Checklist

Develop a comprehensive checklist based on the scope of the audit. This will serve as a reference throughout the process. The checklist may contain questions or criteria such as:

  • Are safety protocols rigorously followed?
  • Does the physical inventory match the records in the WMS?
  • Is the warehouse layout optimized for efficient operations?
  • Are all employees properly trained in safety and operational procedures?
  • Has the equipment been serviced regularly and in good working order?

The checklist should be thorough, covering essential elements from inventory counts to equipment maintenance and staff efficiency.

3. Data Collection and Review

Collect relevant data to support the audit process, including:

  • Inventory Records: Cross-check stock levels with physical counts to verify accuracy.
  • Order Fulfilment Rates: Analyze the speed and accuracy of order processing.
  • Safety Logs: Review records of incidents, safety training, and equipment maintenance.
  • Employee Productivity: Evaluate worker performance based on KPIs such as picking accuracy and packing speed.

By analyzing this data, discrepancies and inefficiencies can be identified, and safety concerns can be addressed.

4. Conduct a Physical Inspection

A thorough, on-site inspection is essential for gaining a clear understanding of the warehouse environment. During this walkthrough, evaluate:

  • Storage Conditions: Ensure that goods are properly stored, clearly signage and logically organized.
  • Safety Hazards: Identify potential hazards such as blocked aisles, malfunctioning equipment, or inadequate use of protective gear.
  • Operational Workflows: Observe workflows in picking, packing, and shipping processes to detect bottlenecks or inefficiencies.

Engage with warehouse staff during the inspection to gain insights into daily challenges and operations.

5. Review Compliance with Safety and Regulatory Standards

Ensure the warehouse adheres to local safety regulations, such as those set by the Occupational Safety and Health Administration (OSHA) in the U.S., or other relevant standards. Key areas include:

  • Employee Training Records: Verify that staff are properly trained in safety protocols.
  • Equipment Checks: Confirm that machinery, including forklifts, is well-maintained and in good working order.
  • Personal Protective Equipment (PPE): Ensure that all required PPE is available and consistently used by staff.

6. Identify Areas for Improvement

Based on audit findings, identify areas requiring corrective action. Common issues include:

  • Inventory Discrepancies: Variances between physical stock and WMS records.
  • Process Inefficiencies: Ineffective picking routes or suboptimal packing procedures.
  • Safety Issues: Gaps in safety protocols or hazardous conditions.

Rank these issues by urgency and impact to determine the priority of corrective actions.

7. Develop an Action Plan

Formulate a detailed action plan to address the identified issues. The plan should include:

  • Specific Actions: Clearly defined steps to resolve each problem.
  • Responsibility: Assign teams or individuals responsible for implementing the changes.
  • Timelines: Set deadlines for completing each action.
  • KPIs: Determine how success will be measured, such as a reduction in picking errors or enhanced safety compliance.

8. Follow-Up and Continuous Improvement

After implementing the action plan, conduct regular follow-up audits or reviews to monitor progress. Continuous improvement is essential to maintaining an efficient, compliant, and safe warehouse. Regular audits ensure that emerging issues are promptly identified and resolved, while tracking the ongoing performance of improvements.

Conclusion

A warehouse audit is a vital tool for enhancing operational efficiency, ensuring safety compliance, and maintaining accurate inventory management. By adopting a structured approach to auditing, logistics managers can identify inefficiencies, optimize processes, and significantly improve warehouse performance. Regular audits, supported by a detailed action plan, can transform warehouse operations into a well-optimized, cost-effective, and safe working environment.

2024: Container Shortages Become a Worldwide Emergency

In 2024, the global logistics industry will face a critical situation as container shortages become a global emergency. The scarcity of accessible shipping containers, along with continued geopolitical tensions, environmental problems, and growing demand for commodities, has resulted in a serious bottleneck in the global supply chain. This dilemma has far-reaching consequences for industries ranging from manufacturing to retail, with businesses rushing to find answers.

Causes of the Container Shortage Crisis

Supply Chain Disruptions: The container scarcity began with the COVID-19 epidemic, which seriously impacted global supply networks. In 2024, these disruptions have been exacerbated by increased demand for goods as economies recover and consumer spending rises. Ports remain congested, which causes delays in returning containers to circulation, worsening the scarcity.

Imbalanced Trade Flows: One of the key causes of the container scarcity is an imbalance in trade flows. A large number of containers are trapped in areas such as North America and Europe, where imports dominate exports. This imbalance means that containers are not being returned to important Asian industrial hubs on time, resulting in further shortages.

Environmental and Infrastructure Challenges: Droughts and other disasters have affected vital maritime routes, such as the Panama Canal, slowing down the flow of cargo. The situation is being made worse by infrastructural limitations in key ports, including equipment problems and labour shortages.

Geopolitical Tensions: Prolonged geopolitical disputes, such as trade disputes between the United States and China, as well as unrest in vital shipping channels like the Suez Canal, are resulting in further container ship delays and rerouting. Longer transportation durations are the outcome, which raises the need for containers.

Impact on Global Trade

The shortage of containers affects international trade in general. As businesses fight for dwindling container space, shipping rates have surged. Prices have gone up as a result, especially in sectors where just-in-time supply chains are prone to delays, like consumer products, electronics, and automobiles. Stock shortages are affecting retailers, and manufacturers are stopping production because they cannot get certain raw materials.

Impact of the Palestine-Israel Conflict on Global Logistics

The ongoing conflict between Israel and Palestine has had profound repercussions on global logistics and supply chains. With increased hostilities in the region, the Eastern Mediterranean has become a volatile area for shipping. Key ports such as Ashdod and Haifa in Israel have faced temporary closures and heightened security, causing significant delays and rerouting of shipments. This has disrupted the flow of goods, increased transit times, and elevated shipping costs due to higher insurance premiums and operational challenges.

Disruption of Shipping Routes

The conflict has led to rerouting vessels away from traditional routes near Israel and Palestine, resulting in congestion in alternative routes, such as the Suez Canal. This has caused delays and uncertainty in the supply chain, particularly for industries relying on timely deliveries. Moreover, some shipping companies have suspended services to and from the region, further straining global trade.
Case Example: During the August 2024 conflict between Israel and Palestine, a major disruption occurred in shipping routes through the Eastern Mediterranean, particularly impacting vessels passing near Israel’s ports of Ashdod and Haifa. Several shipping lines were forced to reroute their vessels to avoid potential risks, leading to significant delays. For instance, container ships en route from Asia to Europe that typically passed through the Suez Canal were diverted around the Cape of Good Hope, adding extra transit time and increasing fuel costs significantly.

Supply Chain Delays and Increased Costs

Shipping through the Eastern Mediterranean has become more expensive due to increased war-risk insurance premiums. These costs are passed on to consumers, affecting the prices of goods globally. Additionally, fuel costs have risen as ships take longer, less direct routes to avoid conflict zones.

  1. Increased Transit Times:
  • Rerouting: Ships may need to take longer routes to avoid conflict zones. If a typical route is extended by 20%, for instance, this could add 2-3 days to shipping times depending on the distance.
  • Port Delays: Increased security checks at ports near the conflict zone can also add several hours to days in delays.
  1. Increased Costs:
  • Insurance Premiums: War risk surcharges can increase by up to 50-100%, depending on the perceived risk.
  • Fuel Costs: Longer routes increase fuel consumption, raising costs by an estimated 10-20% depending on the detour length.
  • Security Measures: Hiring additional security for cargo could increase operational costs by up to 10%.
  1. Opportunity Costs:
  • Inventory Holding Costs: Delays mean longer storage times, increasing inventory costs by 1-2% per week.
  • Loss of Market Share: Extended delays can lead to lost sales, especially for time-sensitive goods, potentially costing businesses 5-10% in lost revenue.

Impact on Regional and Global Supply Chains

The disruption in logistics has impacted various industries, particularly those dependent on just-in-time manufacturing and delivery. The uncertainty in supply chains has led to shortages of critical goods, such as raw materials and components, affecting production timelines. The situation has also highlighted the vulnerability of global supply chains to regional conflicts, prompting businesses to reconsider their logistics strategies and seek more resilient supply chain solutions.

As the conflict continues, the logistics industry faces ongoing challenges. Companies may need to invest in more flexible and adaptive logistics solutions to mitigate risks associated with geopolitical instability. Additionally, the conflict underscores the importance of diversifying supply chains and exploring alternative shipping routes to reduce dependency on any single region.

In conclusion, the Israel-Palestine conflict has underscored the fragile nature of global logistics in the face of geopolitical turmoil. The impact on shipping routes, costs, and supply chains will likely continue to be felt for the foreseeable future, prompting a reevaluation of logistics strategies on a global scale.

Customs and export control in Indonesia

Indonesia enforces customs and export control regulations through a combination of national laws to oversee and supervise the flow of goods in and out of the country. These measures play a crucial role in upholding international trade standards, safeguarding national security, and preserving the nation’s economic stability. The Directorate General of Customs and Excise (DGCE) in Indonesia, operating under the Ministry of Finance, takes charge of overseeing and regulating the movement of goods across the national borders. Its responsibilities include enforcing customs laws, collecting duties and taxes, implementing trade regulations, and ensuring adherence to import and export controls.

Furthermore, the DGCE collaborates with various governmental bodies like the Ministry of Trade, the Ministry of Industry, and the National Agency of Drug and Food Control (BPOM) to oversee and supervise specific commodities, especially those under prohibitions and restrictions (Lartas). These entities are also responsible for granting permits, licenses, and certifications essential for the lawful transportation of goods through Indonesian borders.

1. Customs Control in Indonesia

Directorate General of Customs and Excise (DGCE): The primary authority responsible for customs control in Indonesia, overseeing the enforcement of customs laws, duty and tax collection, and trade regulation implementation.

Import and Export Procedures: Businesses are required to adhere to customs protocols, including goods declaration, duty payment, and submission of necessary documentation like invoices, packing lists, and certificates of origin.

Customs Valuation and Classification: Goods are categorized using Harmonized System (HS) codes and valued based on international standards to determine applicable duties and taxes.

Inspections: Customs inspections are carried out to prevent smuggling, enforce restrictions, and ensure compliance with health, safety, and environmental regulations.

2. Export Control in Indonesia

Prohibitions and Restrictions (Lartas): Indonesia enforces Lartas to manage the export of certain goods. Items falling under Lartas may necessitate special licenses or permits, while some may be completely prohibited from export. These measures are in place to safeguard national security, the environment, and cultural heritage.

Export Licensing: Specific goods require an export license, particularly those that are sensitive or of strategic importance. These licenses are issued by the Ministry of Trade and other relevant authorities.

Strategic Goods: Indonesia regulates the export of strategic goods, such as military equipment, dual-use items, and technology with both civilian and military applications. Exporters of these goods must adhere to stringent regulations and may need specific permits.

Customs Clearance: Prior to export, goods must pass through customs, where documentation is examined, and goods may undergo inspection to ensure compliance with export controls.

Trade Sanctions and Embargoes: Indonesia follows international trade sanctions and embargoes imposed by organizations like the United Nations, meaning certain goods cannot be exported to specific countries or entities.

3. Key Challenges

Compliance: To avoid penalties, companies need to navigate intricate regulations and meet all customs and export control requirements.

Documentation: Smooth customs clearance and export processing rely on precise and comprehensive documentation.

International Standards: Staying updated on local and international trade regulations is essential for businesses, as non-compliance can lead to delays or financial penalties.

 

Historical Development of Logistics

Logistics has undergone profound transformations over time, continually adapting to societal shifts and technological advancements.

  • Antiquity: The origins of logistics trace back to ancient civilizations such as Mesopotamia, Egypt, China, and Rome. Early logistics focused on developing transportation and storage systems to support armies, cities, and trade. This era saw the use of carts, ships, and pack animals, alongside the establishment of key routes and warehouses.
  • Middle Ages: During this period, guilds and trade routes were crucial in facilitating the exchange of goods. Storage and distribution practices began to take shape in marketplaces, laying the groundwork for more organized logistics systems.
  • Industrial Revolution: The 18th century marked a significant turning point in logistics with the advent of machinery, railways, and steamships. These innovations revolutionized transportation systems, enabling the faster and more efficient movement of goods.
  • 20th Century: Logistics became a more formalized discipline, driven by mass production, globalization, and technological innovations like the telephone, radio, and later, the internet. This era introduced new management methods such as just-in-time and supply chain management, fundamentally altering logistics practices.
  • Digital Era: The rise of digital technology and the information age brought about radical changes in logistics. Innovations like warehouse and transport management software, barcodes, RFID technology, and real-time tracking systems transformed how goods were managed and moved.
  • Logistics 4.0: The modern logistics landscape, known as Logistics 4.0, is characterized by digitalization, artificial intelligence (AI), the Internet of Things (IoT), and robotic process automation (RPA). This era is marked by advancements such as route optimization, autonomous vehicles, and automated warehouses.
  • Logistics 5.0: In line with Industry 5.0, a concept introduced by the European Commission, the logistics industry is now focusing on additional values crucial for its future, including human well-being, sustainability, and resilience. This stage also emphasizes the importance of resilience strategies to protect the sector from disruptions, such as those experienced during the coronavirus pandemic.

The evolution of logistics reflects humanity’s continuous adaptation to changing needs and technological advancements, transitioning from basic transportation systems in ancient times to the sophisticated, technology-driven networks of today. Each stage—marked by innovations in mechanization, globalization, digitalization, and sustainability—has progressively enhanced the efficiency, complexity, and resilience of logistics, underscoring its critical role in global trade and economic development.

8 Years of Dedication at Cakraindo Leads to International Recognition

Jakarta, July 25, 2024 – PT. Cakraindo Mitra Internasional proudly announces that two of its exceptional drivers, Taufiqul Ulum and Agus Wibowo, have advanced to compete in the prestigious Extra Mile Challenge (EMC) 2024.

After an extensive selection process that began in May, both drivers emerged victorious from a pool of 100 participants during the EMC 2024 qualification rounds. Their outstanding performance in various tests during the final round in July has earned them significant recognition.

Among the eight finalists, Taufiqul Ulum distinguished himself and will now represent Indonesia in the international stage of the competition in Japan. This achievement is a testament to his dedication, skill, and perseverance over his eight-year tenure at PT. Cakraindo Mitra Internasional.

CEO of PT. Cakraindo Mitra Internasional stated, “We are incredibly proud of Taufiqul and Agus for their remarkable achievements. Their success is a reflection of the high standards and commitment to excellence that we uphold at Cakraindo. We are excited to support Taufiqul as he competes in Japan and brings further honor to our company and country.”

The Extra Mile Challenge is a highly competitive event that tests the skills, knowledge, and professionalism of drivers from around the world. Advancing to the international stage is a significant accomplishment and a proud moment for PT. Cakraindo Mitra Internasional.

We extend our heartfelt congratulations to Taufiqul Ulum and Agus Wibowo and wish them continued success in their future endeavors.

For more information, please contact:

PT. Cakraindo Mitra Internasional
marketing@cakraindo.com
(+62) 851 8686 8871

Ensuring Secure Shipments

Cakraindo Introduces Innovations to Prevent Cargo Loss

[Jakarta, April 18, 2024] PT. Cakraindo Mitra Internasional, a leading name in logistics and shipment solutions, is proud to announce its latest initiative aimed at guaranteeing secure shipments and eliminating the risk of cargo loss or missing items.

In an industry where reliability and security are paramount, PT. Cakraindo Mitra Internasional has consistently strived to set new standards. With the introduction of cutting-edge technologies and meticulous attention to detail, the company is reaffirming its commitment to customer satisfaction and peace of mind.

The measures implemented by PT. Cakraindo Mitra Internasional encompass a comprehensive approach to shipment security:

  • Advanced Tracking Systems: PT. Cakraindo Mitra Internasional has invested in state-of-the-art tracking systems, providing real-time monitoring of every step of the shipment process which supported by TMS. From departure to arrival, customers can have full visibility into the location and condition of their cargo.
  • Robust Security Protocols: Stringent security protocols have been put in place at every stage of handling and transportation. This includes rigorous screening procedures, secure packaging, and secure storage facilities to minimize the risk of tampering or theft.
  • 24/7 Monitoring and Support: Cakraindo Mitra Internasional’s dedicated team of professionals is available round-the-clock to monitor shipments and address any concerns or emergencies promptly. Customers can rest assured knowing that their cargo is in capable hands at all times.

With these latest advancements, PT. Cakraindo Mitra Internasional remains at the forefront of the logistics industry, setting new benchmarks for reliability, security, and customer satisfaction.

For more information and customer complaint about PT. Cakraindo Mitra Internasional and its range of logistics solutions, contact us [click here].

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