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 Operator Difficulty of Complex region-specific

product lines lock-in activating SIMs distribution models

Single product line Freedom to choose Single management One global product for
developed and stocked operator and change platform across all all markets, simplifying
by manufacturer operator in future networks 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 7
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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Conclusion and Next Steps: Choosing the
Right Connectivity Partner
By 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.

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