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IoT Solutions for Cold Supply Chains Offer Strongest ROI for High-value Goods

Lux Research

Enterprises moving expensive products such as vaccines or commodities with high loss rates can save by investing in next-generation Internet of Things (IoT)
sensor platforms, says Lux Research

BOSTON, MA – August 25, 2016 – Real-time monitoring solutions and Internet of Things (IoT) technologies can identify more problems in cold chains than incumbent systems, but a strong business case exists only for high-value products like vaccines or clinical samples, and commodities that suffer high loss rates, according to Lux Research.

Today’s real-time monitoring systems and connected platforms offer new opportunities to integrate and deploy multiple sensors, and track varied parameters, making logistics safer and more efficient. Newer platforms tap advances in cellular and satellite connectivity to link warehouses and distribution centers, and host data on the cloud to enable anytime availability and analytics.

“There is no one-size-fits-all solution in the cold chain monitoring space and companies can implement different solutions on a case-by-case basis, depending on the value of the cargo and loss rates,” said Tiffany Huang, Lux Research Associate and lead author of the report titled, “Keeping It Fresh: Improving Cold Chain Outcomes with Sensor Platforms.”

Lux Research analysts developed payback models for real-time monitoring systems in five different use cases. Among their findings:

  • Benefits for vaccines, biological reagents. Continuous multi-attribute monitors, which include temperature, humidity, door, location, and light sensors, have a payback for vaccines at loss rates over 0.15%, and for biological reagents at loss rates over 0.045%. Typical loss rates hit 1% to 2% in developed countries, making a strong case for using these high-tech solutions.

  • Real-time monitoring works for ice cream. Ice cream is a rare case where temperature issues at retail level create a need for real-time systems, rather than transit phases, where loss rates of 0.5% to 1.5% don’t justify the cost. In one case, an ice cream store installed a multi-attribute monitor costing $800 and averted losses that ran up to $80,000 a month.

  • Semiconductor materials are another opportunity. Makers of computer chips should consider using temperature indicators when shipping valuable adhesives if the loss rate is below 0.4%; temperature data loggers when it is below 18%; continuous temperature monitors if the loss is below 33%; and multi-attribute monitors that include temperature, door status, location, cargo and electrical monitoring when the loss rate is higher.

The report, titled “Keeping It Fresh: Improving Cold Chain Outcomes with Sensor Platforms,” is part of the Lux Research Sensors Intelligence, the Industrial Internet of Things Intelligence, and the Food and Nutrition Intelligence services.