Global Asset Monitoring: Weighing the Costs and Benefits
What’s the right price for securing a shipment? Like so many business questions, the answer starts with “it depends.” There’s not really one specific cost benchmark that will be relevant for every company with a global supply chain, because the value of different products, parts, and shipments is so variable.
New product prototypes containing sensitive technologies are worth far more than the sum cost of their parts, because of the intellectual property at stake. In the same vein, a tiny plastic part that costs a few cents to make could have a much higher value when you consider how the operation of an entire production line could be dependent on the timely arrival of that one small part.
When thinking about how much your organization should invest in asset monitoring or supply chain security, you need to consider these types of scenarios. You need to understand the value of your shipments, and the potential costs associated with delays or losses during transportation. It’s also important to understand how different cost structures affect your bottom line.
Example #1: Cost per Shipment vs. Cost per Month
Intelyt clients pay a monthly fee for their asset monitoring service, so there is no upfront capital cost, and clients are protected from the costs of having to replace technology when changes to networks, or hardware upgrades occur. As a result, clients can view their global asset monitoring costs as a per shipment operational expense for security.
Using round numbers for convenience, let’s say you spend $100 per month on a global asset monitoring service. If you only have one shipment, then it costs $100 to secure that shipment. But if you send 5 shipments, then you’re only spending $20 per shipment on security. This is why asset monitoring as a service can offer a cost-effective solution for companies with large volumes of shipments.
Example #2: Cost of Security vs. Cost Risk of Loss
The cost of monitoring and securing your assets needs to be weighed against the value of those items—and the potential costs of shipments being lost, delayed, or damaged.
If you’re shipping a new server to a data center, the equipment itself is fairly valuable, but a delay along the route is unlikely to affect the entire facility’s operations on a major scale. On the other hand, if you’re shipping spare parts for a military jet or a rescue helicopter, you may literally have human lives depending on the timely arrival of that shipment. Comprehensive monitoring of those parts during transportation is more valuable, because the risks associated with any disruption are greater.
How to Control Costs at Scale
Operating an asset monitoring solution at the scale you need requires more than just technology. The implementation and management of global asset monitoring involves a huge number of moving pieces and tasks. When you find the right tracking technology, it’s tempting to think the work is done—that there’s nothing to do now but slap the tags on your shipments and send them out. But have you thought about who is actually going to do this? Tracking devices need to be charged, added to shipments, and then recovered for the next use. This takes time and effort. Without the right infrastructure and support systems, these processes can interrupt or delay transportation operations.
So, how can you incorporate asset monitoring effectively when you have hundreds of shipments leaving your facilities every day? That is, how can you manage it all without adding personnel or costs? For many organizations, asset monitoring as a service offers the ideal solution.
Intelyt has created a solution that is optimized for the needs of companies with global supply chains. In addition to tracking location, our smart tags monitor environmental conditions such as temperature and humidity to provide complete protection for your assets. And our global communications network and support systems ensure that everything runs smoothly, so you get the full benefits of global asset monitoring with a minimal impact on your operating costs.
With Intelyt, you can reliably monitor the location and status of all of your high-value or high-volume shipments across more than 190 countries, regardless of which carrier is handling the assets. Our solution gives you independent insight so you can manage cost and risk.