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Thanks to geofencing, Audi saves a lot of money. So why don’t you?

18 May 2018
Control Tower

Because of mobile devices, geofencing has become a well-known technique in some applications. But did you know that this function is becoming indispensible in logistics, too.

The name geofencing might not ring a bell with you, even though chances are you are using it anyway. Thanks to the presence of GPS in smartphones, geofencing has become almost universally applicable. Take a look at the smart Nest-thermostat, for instance: geofencing lets it know when you’re home and when you aren’t, just in time to adjust the heating to the right temperature.

Philips’ Hue lamps can be used in the same way. Thanks to GPS data, the Hue app on your phone knows when you’re nearing home and automatically turns on the Hue lights, without you having to do anything manually. Those are two typical applications for the consumer at home, but the exact same technology is also applicable in a supply chain.

So how can you use geofencing to save costs and time? There are a surprising number of user scenarios for a transport management system (TMS) that works with GPS data and relies on geofencing. But let’s start at the beginning: what exactly is geofencing?

Geofence outlines a virtual area

Geofencing is made possible thanks to a link with GPS data emitted, say, from the mobile device of a courier. That’s how, at any given time, a TMS knows precisely where a transport is situated. But when does something like that need to be triggered? That’s where geofences come into play. Basically, you’re creating a geofence when you virtually outline a certain area, for example around an address in an industrial zone. The moment a transport enters or leaves this outlined area, it is signalled to the TMS. That, in turn opens the doors to a number of interesting applications.
 

Manual tasks happen automatically

When did the delivery happen exactly? It’s a simple question, but to find the answer you too often have to rely on a piece of paper that was filled out by the driver and typed into a spreadsheet by an administrative aid. Not very practical, sensitive to errors, possibly just incorrect and definitely not available in real-time.

Geofencing is a solution to all of these shortcomings. The moment a delivery has taken place, the information is available in the TMS in a jiffy, thanks to the driver’s mobile device or the onboard computer signalling when a certain location is in sight. That’s how you know the exact moment when a shipment arrives, instead of relying on an estimated time that’s being filled out in retrospect.
 

More efficient loading and unloading

By setting up your geofence to a slightly wider range, you can speed up the process of loading and unloading at a destination. For example, a client receives a message when the transport is within a certain distance, so he can prepare the reception of the goods. This way, you avoid any unnecessary loss of time when unloading. Maybe that client can even message the driver with the location of the right loading dock. 

In a different scenario, geofencing helps you to steer the flow of deliveries in the right direction and employ workers more efficiently. If, for example, a first transport, let’s call it A, is delayed by a traffic problem, but a later transport, B, is ahead of schedule, reception will know at all times. Reception can then decide to give priority to B. That way, you reduce the inactive time of your personnel. There are a lot more scenarios in which geofencing helps to make the process of loading and unloading run more smoothly. With a just-in-time-production schedule, geofencing is practically unavoidable.
 

Signalling problems on the road

Not only can your geofence outline a destination, you can also enter a route. When a transport deviates from its itinerary, it crosses the geofence which then sends out a signal to the TMS. That’s especially practical for the transport of valuable goods, think of security measures alone. But it’s also useful to define if the most efficient route is the one that’s being used, either live or in retrospect.
 

Less waiting hours

The goal is to reduce time loss at unloading as much as possible. A transport that needs to wait a couple of hours before it can unload, costs money. As soon as the agreed-upon loading time is exceeded, the bill for lost waiting hours or hold-up starts piling up zeroes. Because geofencing gives you the possibility to announce deliveries before they are actually at the front door, it’s easier to adjust logistics to production, even ad hoc.
 

Audi knows why

The practical benefits of geofencing are of course not only purely theoretical. In the field, the technique is already begin used in a range of different ways. An enlightened example of this is Audi. In 2014, their Ingolstadt factory, a part of the VAG group, was awarded for their most innovative use of geofencing in regards to the deliveries of suppliers. The logistic solution was elected over fifty others in the Volkswagen group, probably because it was as simple as it was effective.

At the base of it is the Quick Check-In app, which was developed by Audi for their suppliers’ drivers. This app has different applications which use geofencing. Among other things, it informs the IT systems at the factory in Bayern that a truck is approaching. This happens a first time when the vehicle passes a virtual threshold, approximately 30 kilometres from the factory gate. After that, two more notifications follow at 20 and 3 kilometres distance. The geofence warnings make it possible to adjust the delivery of the parts with the line of assembly. The clearance process happens while the truck is still on its way and the load is immediately brought to the right loading dock, ready to be used in production.

Quick Check-In has raised the efficiency in Ingolstadt drastically, using nothing more than a simple app that communicates with the IT system already in place. You can find a detailed overview of the Audi project here
 

Take-away

Geofencing is a highly useful function to have. More specifically, it proves that a light TMS, providing real-time information through a link with the cloud and mobile devices, creates a range of new opportunities, all of which have to do with efficiency as well as cost reduction.