PostNord: How IoT innovation is inspiring business model change
Image: PostNord/Mads Armgaard
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PostNord: How IoT innovation is inspiring business model change

Jim Mortleman – March 2017
The Dano-Swedish postal group is re-inventing its service portfolio by tapping into the hyper-connected world.

Traditional postal service operators have been confronting business model disruption for most of the past two decades. As the use of email and internet messaging has become ubiquitous, the volume of physical mail has dropped dramatically. But at PostNord, the Internet of Things (IoT) is enabling the state-owned postal service of Sweden and Denmark to not only rise to that challenge but to become a pioneer in new delivery services.

In this environment, “if you don’t change, you die,” says PostNord’s senior manager for IoT and digital transformation Helen Holst. “Digital technology is forcing change on our industry at an ever-faster pace. And although mail volumes are diminishing, we see lots of new opportunities emerging in ecommerce and logistics, many of them enabled by the IoT.”
Connected fleet

Holst says a fundamental approach has been to focus on using IoT technology to deliver operational efficiencies. “Start with what you know,” she advises. “Try to find business cases that generate savings. These will help you fund the next steps of your digital transformation.” For PostNord, that has meant turning its fleet of delivery vehicles into a network of hyper-connected nodes.

“Routing and scheduling are at the core of our business and by incorporating IoT technology into our fleet we’ve been able to optimize driver routes, lowering transportation costs, mileage and pollution levels,” Holst explains. “We began with connected telematics, which allowed us to prevent failures and fix issues in vehicles before they became expensive to deal with. The technology also can be used to make sure trucks are accelerating and breaking at the optimal point, ensuring we don’t use any more fuel than is necessary.”

She notes that the technology has also improved security and reduced losses from theft. “We know exactly where a vehicle is and if its doors have been opened when they shouldn’t have been, in which case we can take appropriate action like alerting drivers or setting off alarms.” And by remotely monitoring the environment inside vehicles, including temperature, PostNord is able to ensure goods such as medicine and fresh foods do not spoil before they reach their destination, notifying drivers instantly of any unexpected change in conditions.

For PostNord, such applications of IoT are viewed as just the first wave. From those have sprung a raft of new opportunities to improve the agility of its workforce and, increasingly, introduce innovative new services for customers. “We have put a lot of focus over the past year on developing mobile apps and tools for our drivers so they can be more responsive. We’re increasingly moving towards the use of dynamic routing to speed up deliveries and provide more accurate tracking and delivery information to customers, by combining vehicle location data with traffic information and other metadata,“ she says.
Activating ecosystems

However, Holst believes many of the most exciting opportunities have emerged when the company has looked at the new possibilities of teaming up with partners and customers in connected ecosystems. “That’s where you can discover the truly disruptive business models for the future,” she says.

Among the initiatives PostNord has been piloting is one to deliver groceries directly to a customer’s kitchen. When notified that their goods are out for delivery, a customer sends a temporary electronic access key to the driver that can be used to open a smart lock fitted to their front door. After the PostNord operator has unpacked the goods, and transferred perishables to the refrigerator, they send the customer an image showing the fulfilled order and lock the front door as they leave. Although trust and home insurance concerns have restricted the roll-out of the pilot (which is being run with Swedish supermarket group ICA and smart lock company Glue), Holst predicts “we’ll see a lot more of this kind of thing in future.”

Meanwhile, the company in Denmark has run another pilot with Volkswagen that allows car buyers to collect a vehicle they have ordered online from a local PostNord Parcel Locker, adapted to house a small car.

With the company exploring an array of other future opportunities involving technologies as diverse as 3D printers, autonomous vehicles and big data analytics, Holst thinks postal operators that are successfully applying such technology and process innovation are on the cusp of a digitally inspired renaissance. “The new ethos at PostNord is to connect everything from sorting machines, drivers and vehicles to partners, consumers, businesses and households, tapping into that ecosystem to provide ever-more innovative and compelling value-added services.”

• PostNord’s Helen Holst was speaking at IoT Tech Expo in London 
First published March 2017
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