Location tracking and asset management have been among the earliest sector to see widespread adoption of first machine-to-machine (M2M) communications and now Internet of Things (IoT) applications. The reasons behind this are the relative maturity of these markets and the clear need to track and manage assets in deployment. For example, there’s a clear business case for tracking the location of a high value asset such as an item of heavy equipment.
With dollar values in the hundreds of thousands and a well-established leasing business model tracking an excavator is both a logical and productive activity for an asset owner to engage in. However, the nature of the industries these types of assets are deployed in means that global coverage is required and often this is in areas where cellular coverage is patchy or non-existent. At this end of the market, satellite communications have been routinely used to track asset locations. However, the market is now maturing to do more with that connectivity than simply present a flashing location icon on a map.
Now, the data connection can be used to monitor the performance of the excavator, log the hours that it has been used or enable predictive maintenance. Importantly, the connectivity enables new business models for the excavator industry. Instead of using IoT to monitor the excavator, the owner or manufacturer can harness IoT to enable servitization. Where once, a mining company might lease excavators on a monthly basis, they can now pay per scoop of a bucket or per hour of operation. Such new models enable greater flexibility for customer organisations and allow device owners and makers to ensure maximised uptime because they can get a clear picture of how the equipment is being used and when it will need maintenance or replacement parts.
This has high value benefits to equipment operators because downtime in a mining operation has a far greater cost per hour than the cost of leasing an excavator. The business case here is easy to identify but only more recently have increasing volumes of lower value assets become possible to be location tracked and asset managed.
The decreasing cost of electronics in the form of sensors and connectivity in the forms of satellite, cellular and low power wide area networks (LPWAN) is opening up new markets at the same time as more efficient systems and software are coming to market that enable more to be done with data collected from sensors integrated into assets. This has resulted in the technology being applied to shipping containers, road haulage and other vehicle tracking. However, the reduced costs involved, especially in relation to LPWAN networks, although cellular capacity will also cost cents per month for some applications, are enabling tracking of assets of relatively low value. Cows and bicycles are routinely cited as trackable assets by the vendor community.
This will see larger volumes of assets tracked and managed than ever before. “Overall, we expect annual shipments of asset tracking IoT devices to grow from 22 million to 70 million by 2022,” said Joe Madden, the principal analyst at research firm Mobile Experts LLC. “What’s more, about half of these devices will send data through a cloud-based service provider, driving service revenue growth from US$2.2bn in 2016 to US$7.5bn in 2022.”
The report emphasises that LPWAN connectivity adoption is taking off, encompassing the various different LPWA technologies. In 2017, the report says, approximately ten million narrowband-IoT (NB-IoT) equipped bicycles were deployed in China this and LoRa devices will be found on pallets, trucks, fork lift trucks and other key assets. Hospitals that use Wi-Fi to track major assets will have new options for tracking medicines, organs and other highly critical items. In addition, cattle ranchers can increase yield by 10-20% by preventing theft, injury or other problems with their herd.
Madden’s expectations are borne out by a study by ABI Research which projects the market will reach 500 million tracked things by 2023. The firm says low-cost, battery-powered tracker devices that are integrated with connectivity, cloud storage and software platforms will provide seamless visibility of assets to multiple stakeholders across a supply chain.
“Simple low-cost LPWA-enabled asset tracking solutions will transform the supply chain and logistics industry the way smart meters are transforming the energy and water distribution industry,” said Adarsh Krishnan, a principal analyst at ABI Research, who added that logistics companies have been early adopters of asset tracking solutions driven by life sciences and healthcare customers because of strict regulations and the need to mitigate supply chain risks, especially in the transportation of sensitive and high-value biomedical assets.
Intermodal refrigerators containers – used in cold chain applications – have already witnessed connectivity adoption and Krishnan expects connectivity adoption in dry containers, which accounts for nearly 90% of total container fleet in the world, to follow. In addition, asset tracking solutions will have the most impact on tool and heavy equipment rental companies with over 45% penetration of rental inventory by 2023.
Posted by: IoT Now Magazine - October 22, 2018
Categories: Automotive IoT News Transport & Telematics