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eSIM: Giving Manufacturers the Competitive Edge in Logistics Meeting the increased demand for supply chain resiliency and direct to customer fulfilment

White Paper

The path that products take from the warehouse to the customer – sometimes with a stop at a retail outlet – poses a number of challenges for the companies in charge of merchandising and transportation. The way shipping and logistics companies operate has evolved and smart tracking solutions - whether it’s smart logistics devices or tracking add-ons implemented by manufacturers - are now playing a pivotal role in the digitalization of logistics. As the industry faces unprecedented challenges, it is time for manufacturers to double-down and lead the sector to ever greater visibility and automation.

Traditional supply chains struggle with disruptions. The labour and goods shortages and

increase in direct to consumer fulfilment experienced today applies pressure that can

ultimately break a chain. A small increase in visibility can protect a critical supply. Increased

visibility inevitably leads to automation, which then results in cost savings for everyone in

the supply chain. Complete visibility manufactured in from the beginning, that follows items

from factory to customer, creates resilient supply chains of the future that can withstand

any disruption.

Digitalization of the transport and logistics industry has long been hindered by the high

number of stakeholders, different systems, geographic regions and modes of transports.

The eSIM technology will help to solve some of these problems.

Firstly, thanks to eSIM, manufacturers can take advantage of IoT connectivity that is

seamless, as it is embedded at the point of manufacture and can be deployed automatically

out-of-the-box in any geographical region.

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This, in combination with the nature of the eSIM form factor (smaller and more resistant

to damage than a traditional SIM) creates more opportunities for connectivity in the

logistics space. Connectivity could be embedded into the carrying container, pallet, crate,

transporting vehicle, to sensors in loading docks and fulfilment centres, or even in the

product itself. The opportunities to provide increased visibility are wide and fruitful. This

will enable more advanced tracking and analytics of their logistics operations to remove

the current inefficiencies and facilitate data across in the supply chain.

Secondly, the move to eSIM can itself simplify the supply chain for logistics manufacturers.

Usually each cellular-enabled IoT device requires a different SIM to ensure connectivity and

compatibility with regional mobile networks. The cost of producing and shipping numerous,

almost identical SKUs, and managing the mobile network operators (MNO) in each territory

worldwide can increase cost, limit scalability and add complexity for both manufacturers

and the end users.

Instead, an embedded SIM (eSIM) is soldered into the device and a management platform

facilitates the activation and assignment of network operators, without the physical SIM

card being touched.

The flexibility of the eSIM solution opens up new regional and global markets to

manufacturers, without forcing them to create and maintain additional localized product

lines. One device can be manufactured and sold to the world; creating new revenue

streams while lowering costs.

All of these factors will help manufacturers in the logistics industry to break through the

current silos and inefficiencies and facilitate more effective data sharing and insights across

their supply chain.

Read this whitepaper to find out more about:

The four steps towards embedded connectivity

How eSIM simplifies selling internationally

How embedded connectivity:

- Increases supply chain resilience

- Optimises last mile logistics

How Arm customer Sensize became logistics pioneers

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Part One: Four Steps to Embedded Connectivity

Arm believes that 1 trillion new IoT devices will be produced by the year 2035, and

a growing number of device manufacturers are helping this prediction become reality.

From discussions with enterprises the world over Arm understands that complexity can

be a barrier to larger IoT projects.

Manufacturers can eliminate much of this complexity by providing devices with embedded

connectivity that ‘just works’.

Whether you manufacture smart logistics devices (sensors, trackers, pallets etc) or any

product with an embedded an eSIM chip as a tracking and connectivity technology, the

following elements need to be addressed.

Elements required for embedded connectivity

1. Take an eSIM

At 5x6 millimeters, the eSIM is roughly half the size of the Nano (4FF) SIM card. Unlike

removable SIM cards, the eSIM is embedded during the manufacturing process – soldered

into a sealed enclosure. It is extremely difficult to tamper with or remove an eSIM without

causing significant damage to a device. An eSIM is also water resistant, an essential feature

for any ruggedized IoT applications and especially so for the logistics industry. As an

example, an end user may need a pallet shipped worldwide in incredible adverse conditions,

resulting in the device being inaccessible for weeks at a time.

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2. Add a bootstrap profile

Every eSIM is configured with a bootstrap profile. The bootstrap profile guarantees that

the device can obtain connectivity, regardless of its geographic location, and be used to

download local network profiles when a device is first turned on. It may also be used as

a fall-back profile if there are network issues in the location where the device has been

deployed. This is particularly useful for smart tracking devices that will require automatic

initial connectivity as they cross geographical regions.

3. Link a management platform

A software platform that manages eSIMs is key to scaling IoT logistics deployments.

The simplicity and automation provided by a connectivity management platform make

it possible to enroll, deploy, maintain and track thousands of devices remotely. This is

critical for logistics solutions, as the sheer number of devices which are deployed globally

continues to scale exponentially.

4. Choose a network

The ability to change network operator without physical interaction is a major benefit of

eSIM. A global network of MNOs is an important part of the eSIM ecosystem because

no one operator provides the coverage to support a global supply chain. A manufacturer

of smart logistics devices can provide the device with the bootstrap profile and let their

customers choose the network that best supports their needs post-deployment, or

remotely change operator as the needs of the deployment changes.

Now that the basics have been explained, let’s move on to why manufacturers should be

embedding connectivity into all their products.

Want to know more about remote SIM provisioning? For more information on eSIM and

how over-the-air SIM provisioning works please see Arm’s How Remote SIM Provisioning Works ebook.

Part Two: International Selling Simplified

If you produce smart logistics devices, eSIM technology can help you make international

selling more straight-forward. No one operator can provide truly global connectivity,

meaning logistics manufacturers that want to provide their product globally must

contract with more than one operator to secure operator-specific SIM cards. Without

eSIM, manufacturers must create and maintain separate product lines for each mobile

network operator to account for the different SIM cards required, despite the fact that the

underlying device itself is exactly the same. eSIM enables single-SKU manufacturing

for IoT devices.

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Overcome the typical hurdles in providing connected products

Cost of multiple product lines

Single product line

developed and stocked

by manufacturer

Operator lock-in

Freedom to choose

operator and change

operator in future

Difficulty of activating SIMs

Single management

platform across all

networks

Complex region-specific distribution models

One global product for

all markets, simplifying

distribution

A single-SKU manufacturing process is easier to manage and reduces the costs and

complexities of multiple product lines. Simultaneously managing large numbers of SKUs

creates costly inefficiencies in management, production runs, sales forecasting, inventory

management, and supply chain fragmentation. This can negatively impact engineering,

production, quality, finance, and operational departments. eSIM removes the need to

design, make, stock, ship, track, repair or replace multiple variations of what is effectively

the same device.

Global reach is key for a logistics manufacturer to win in the market. eSIM agility reduces

barriers to worldwide coverage for device manufacturers. Entering new geography

no longer requires a new product and new inventory. If the manufacturer decides

to target a new territory, existing products can be deployed in that region immediately.

Embedding a reprogrammable eSIM also means that one distribution model can apply

across many borders and use cases. Instead of contracting with region-specific distributors

or resellers, the manufacturer can supply a global distributor or major chain, ultimately

saving costs by limiting the distribution channels used and increasing average deal size.

MNOs also come with their own management platform. If the device is sold to ‘just work’,

the SIM must be activated prior to being sold. Activation of the operator-specific SIM

is limited to the platform provided by the operator, placing an administrative burden

to selling internationally.

As a shipment travels from port to depot to final destination, a smart tracking device

may power on, send location or environmental data, then power off again, connecting

to a range of networks in order to complete its task. A purpose built IoT platform for global

device connectivity excels over traditional MNO solutions by consolidating visibility and

management of devices, which are connected to multiple operators, into a single view.

At the same time, the choice of eSIM improves the buyer’s experience, rather than

limiting it. eSIM programmability gives the end user more flexibility and more choices

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for connectivity. Users have complete freedom to change the operational location

of the device at a later date, regardless of its intended location.

eSIMs can change operator or network as many times as is required. Operators’ offerings

change over time – 2G networks may be recalled, and 5G networks will become

widespread. eSIMs allow manufacturers to provide future-proofed devices, alleviating

customer concerns when investing in global IoT deployments.

Manufacturers operate more profitably while also increasing the opportunity to sell large

volumes of devices globally.

Part Three: Tracking your products - made easier

Adding a trackable embedded connectivity chip to previously unconnected products

enables manufacturers to harvest a constant stream of data before, during and after the

product is shipped. This provides end-to-end real time visibility of their supply chain, which

means that not only can they constantly monitor the status of products and take immediate

action to protect their integrity, but also optimize their supply chain and processes.

In a typical logistics deployment without eSIM, the manufacturer loses ‘sight’ of the

products as soon as it rolls out the door. As a result, it’s hard to harvest device performance

data and troubleshoot issues without sending an engineer to access the device —which

is expensive, time-consuming or even impossible if the device is completely inaccessible

aboard a shipping container. If the retailer or solution provider wants to add greater

visibility, they will look to add a tracking solution by retrofitting connectivity. By embedding

connectivity from the beginning, the manufacturer benefits from this demand, instead

of an aftermarket solution provider.

eSIM programmability gives the end user more flexibility and more choices for connectivity.

With a SIM card embedded into the device and connected to a management platform,

a flow of analytics data can be gathered in real-time. ‘Always on’ connected devices provide

new levels of insight into the journey of a product from factory to consumer.

Increasing connectivity at the last-mile for critical supply chains

The last mile before delivery is the place where visibility is most critical, yet communication

often breaks down. In healthcare, for example, deliveries to hospitals and nursing homes

are fraught with multiple requests for data on the same delivery. Nursing stations on

different floors within the same hospital will ask for information on the same medication

and medical supplies. The cause? A lack of connectivity within hospitals and a lack of

connectivity management between the different capabilities (cameras, GPS and scanning)

of the drivers’ connected device (such as cell phones or tablets). To make sure they have

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proof of delivery and the hospital has the data it needs, a delivery company may end up

providing the same data to 35 different people at one hospital, for example, on different

floors and units.

SJ Consulting forecasts1 that better connectivity across devices used by hospital staff

could alleviate many of these problems. SJC expects the use of real-time devices by

hospital personnel to expand and that their connectivity with suppliers’ devices will

improve. This will mean that hospital personnel (nurses, technicians, procurement staff

on different floors and different wings of the building) will have real-time visibility

of the location of their order.

IoT helping retailers adapt to increased demand

In the past, consumers would go to a store, buy products, and bring them home

themselves. Although that still happens, increasingly consumers are ordering online

for home delivery. Many retailers are having to adapt their fulfilment strategy to meet

the increased need to provide home delivery.

Retailers often depend on fulfilment houses to send the right products to the right

customers. 99.7 percent order fulfilment accuracy may sound good, but a huge volume

of orders means that even a 0.3 percent picking rate error leads to over 14 million errors

per year. High employee turnover further complicates the issue. SJC predicts2 that

fulfilment houses need to make their operations simple and efficient, automating where

possible and creating jobs where little to no training is required. They will invest in location

and navigation technology to help seasonal workers learn quickly, and to optimize their

picking efficiency and accuracy. Advances in asset tracking solutions will play an important

role in helping fulfilment houses increase their accuracy rates. For example, using IoT

applications such as sensors instead of barcodes would reduce the labor costs associated

with smart logistic tracking. Industry players are already investing millions of dollars to

replace barcodes with IoT sensors, including smart chips generated by 3D printers. With

over 40 million parcels and shipments moving every day globally, the potential volume

for IoT-based replacement is over 14 billion per year.

SJ Consulting Group3 expects this replacement to be well underway by 2021. In addition,

technology such as beacons may reduce the number of manual scans each package has

to go through. When shipped, the typical package is scanned 25 times, costing the carrier

$0.25-0.50 per package. By reducing the number of times a package is scanned, carriers

can lower their shipping costs and expedite shipments, while at the same time providing

real-time visibility into the shipment for the shipper and customer.

The sensors and tracking solutions created by logistics manufacturers can accelerate this

digitalization – ultimately improving the resilience of the supply chain and maximising the

numbers of shipments that can be processed. The flexibility of ease of an eSIM connected

solution can shorten manufacturing time and time to deployment.

1, 2, 3 - https://learn.arm.com/sjc-retail-logistics-report.html

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Part Four: Case Study

Sensize develops IoT-enabled nodes that are pioneering better visibility for reusable

packaging in the supply chain. The concept involves adding the latest tracking technology

to humble pallets, crates, and containers that are shipped in their millions by retailers,

fast-moving consumer goods (FMCG) and logistics companies. These nodes feature thermal

sensors to alert retailers to temperature excursions, accelerometers that record impact, and

timers to log periods of refrigeration, all of which helps depict the current state and location

of a consignment. The Cambridge-based start-up had already developed a proof of concept

with two of the UK’s largest grocery retailers and was about to win a major contract with

a global courier distributing to UK, Italy, Austria, Germany, China, and Russia.

Sensize had concerns over their existing connectivity provider’s network coverage and

their ability to support clients responsible for shipping 1.8 million consignments globally

every day. With operations in the US, Europe, and Asia, Sensize required a cost-effective

connectivity partner with global coverage to reflect the global distribution network.

The scale of the opportunity presented by this major contract also required a step-change

in Sensize’s process for onboarding and managing SIMs. Its global scope presented the

additional hassle of dealing with supplementary networks to guarantee coverage where

it was needed.

The Pelion Connectivity Management platform allowed the Sensize team, led by Director

Luke D’Arcy, to bulk activate batches of thousands of SIMs using a single command,

within minutes of receiving them. This streamlined approach to SIM activation and ongoing

management will prove particularly valuable as the number of tracked objects increases

to millions of units in the coming years.

If the aim is to improve supply chain resilience, then the reliability of the sensor itself

must be guaranteed. To this point, Mr. D’Arcy explains his confidence: “Arm allowed

us to incorporate a live cellular connection into our manufacturing test program. Every

device we make is put through its paces on a local Chinese cellular network at our factory

in Shenzhen. This way we can guarantee 100% reliability for our devices before we ship

them to customers for deployment.”

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All brand names or product names are the property of their respective holders. Neither the whole nor any part of the information contained in, or the product described in, this document may be adapted or reproduced in any material form except with the prior written permission of the copyright holder. The product described in this document is subject to continuous developments and improvements. All particulars of the product and its use contained in this document are given in good faith. All warranties implied or expressed, including but not limited to implied warranties of satisfactory quality or fitness for purpose are excluded. This document is intended only to provide information to the reader about the product. To the extent permitted by local laws Arm shall not be liable for any loss or damage arising from the use of any information in this document or any error or omission in such information.

© Arm Ltd. 2020

Conclusion and Next Steps: Choosing the Right Connectivity PartnerBy this point, you will be excited about one or more of the opportunities that eSIMs have

to offer. Your next step is selecting an IoT connectivity provider that can supply both the

eSIM and the network of mobile network operators required to provide global coverage.

Numerous offerings claim to offer effective connectivity management, but when

evaluating solutions for your business’ specific needs, focus on these three prerequisites.

Any inadequacy in these areas can hamper your IoT projects’ profitability or derail

them entirely.

Focus on flexibility, simplicity, and cost-efficiency when evaluating partners. Success

depends on leveraging flexible networks, easily managing device connectivity, and

embracing the cost-efficiency of a single vendor approach that offers access to MNOs

around the world.

Seek consolidation. Where connectivity management is concerned, your goal should

always be a “single pane of glass.” Give preference to solutions that consolidate data from

disparate sources and cost and carrier relationship data into actionable forms.

Look for a trusted partner ecosystem. When considering solutions and providers, don’t

just look at the technologies they are offering. Connectivity management can determine

your competitive success. You need a provider that combines superior technologies

with experience, an ecosystem of partnerships, and commitment to the success of your

business. Select a partner that you can trust for the long term.

To find out about how Arm Pelion Connectivity Management can support your eSIM

deployment, visit our website or request a consultation.