Building Smarter Supply Chains with IoT

Building Smarter Supply Chains with IoT

Naveen Joshi 30/08/2019 4

The implementation of IoT in supply chain management will help organizations streamline multiple business procedures such as asset tracking, marketing, and maintenance.

Managing supply chains is a crucial business function for industries such as retail, manufacturing, logistics, and e-commerce. But, supply chain management can get increasingly complicated due to rising consumer demands, unpredictable market trends, and unexpected delays. Also, many processes involved in supply chain management are generally carried out manually, making them time-consuming and tedious. Hence, business leaders are looking for solutions to make supply chain management more scalable, connected, and reliable.

The advent of industry 4.0 has given rise to the implementation of modern technologies like AI and IoT in different industries such as healthcare, telecom, and pharmaceuticals. Similarly, businesses can implement IoT in supply chain management to enhance inventory management, improve logistics and transportation, and increase revenue. Also, IoT can help businesses tackle the issue of mismatch between supply and consumer demand. With the help of IoT, business leaders can redesign their supply chain management workflows to deliver robust and efficient solutions to existing challenges. Due to these benefits, IoT is expected to generate an estimated $4 trillion to $11 trillion in economic value by the year 2025.

Utilizing IoT in Supply Chain Management

The implementation of IoT in supply chain management will help businesses in the following manner:

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Customer Insights

IoT sensors can be installed in various products to understand how each customer uses them. With this technology, businesses can analyze the usage patterns of different customer demographics and use the acquired data while developing new products. For instance, a smart bulb can help manufacturers understand a consumer’s behavior patterns by providing insights such as time intervals when the bulb is on, preferred colors, and energy consumption. With the help of these insights, businesses can create better products that cater to a customer’s requirements. Hence, IoT can help organizations in creating personalized products for their customers.

Goods Monitoring

Food products such as fruits, vegatables, and meat need to be stored under specific levels of temperature and moisture to prevent them from perishing. Using IoT sensors, businesses can track different environmental conditions such as temperature and humidity. Businesses can also decide a threshold value for such products. In case the threshold value is crossed, IoT sensors can notify concerned parties in the warehouse. For instance, IoT sensors can notify business leaders and concerned personnel in the warehouse when the temperature of a product is rising up and getting close to the threshold. Also, IoT sensors can alert businesses when a product is damaged and needs to be replaced. For example, when a box of glass bottles filled with soft drinks has been damaged, sensors will detect that the bottles are leaking and notify the manufacturers. In this manner, the utilization of IoT in supply chain management will allow businesses to deliver high-quality products.

Product Lifecycle Management

Product lifecycle management is one of the core tasks of supply chain management. Every batch of products goes through multiple stakeholders such as vendors, manufacturers, B2B partners, super-stockists, wholesalers, and retailers. Businesses have to ensure that products stay in appropriate conditions across various stakeholders. IoT sensors can be used to track products through various units of the supply chain to address issues like under-stocking and over-stocking. IoT technology can also help in identifying vendors that are geographically suitable for the business. Also, IoT can be utilized to enhance reverse logistics by detecting quality issues in different product batches.

Inventory Management

Businesses may own multiple warehouses for storing goods and tracking these warehouses can be increasingly complicated, especially in the case of third-party warehouses. Hence, monitoring stock levels in real-time can be almost impossible. In some cases, goods may even be left unreported in a loading dock or get stolen. Therefore, business leaders require a feasible solution for inventory management.

Businesses can install IoT sensors in their inventory to receive real-time updates about their stock levels. The information sent by IoT sensors can help business leaders analyze the demand for different products. Using this technology, business leaders can recognize industry trends to manage their inventory effectively. Also, IoT sensors can notify business leaders when products leave the warehouse without any scheduled delivery. In this manner, IoT can act as a deterrent for theft.

Asset Tracking

Generally, organizations use bar codes and tracking numbers for managing and tracking products in the supply chain. Organizations carry out asset tracking to ensure efficiency in their supply chains. In asset tracking, IoT can prove to be more beneficial compared to conventional methods. Using IoT sensors, organizations can track the location of their assets in real-time. These sensors can also provide detailed information about the assets such as status updates, time spent in transit, and time spent on the shelves. With this data, business leaders can identify inefficiencies in their supply chain and identify the cause of such inefficiencies. In this manner, business leaders can utilize the obtained information to enhance their quality control practices.

Connected Fleet

Supply chains consist of multiple fleet components such as containers, ships, and trucks that are used for delivery purposes. By connecting these components using IoT, organizations can have greater control over their delivery vehicles. With the help of IoT sensors, businesses can identify if their deliveries will be delayed due to traffic jams, environmental calamities, or bureaucratic red-tape. By identifying issues such as traffic, businesses can plan quicker routes and other transit modes. Additionally, IoT can enable delivery partners to strategize for multileg shipments that are cost-effective and efficient. Hence, utilizing IoT in supply chain management can help businesses deliver products to customers without any delays.


In supply chains, delivery vehicles may break down, vendor ERPs may become ineffective, communication issues may occur, and necessary equipment may malfunction. These issues can lead to unexpected downtime, affecting the efficiency of the entire supply chain. Businesses also have to repair or replace malfunctioned equipment, which can be expensive. The utilization of IoT in supply chain management can enable businesses to carry out preventive maintenance of all their equipment and delivery vehicles. IoT sensors collect real-time data from various vehicles, machines, products, retail shelves, and shop floors. Using such crucial data, businesses can generate analytics to monitor several KPIs of different supply chain equipment. Business leaders can set up specific threshold values for different KPIs. When the specific values aren’t met, IoT systems can help business leaders gather more detailed data and identify the core issues. Hence, business leaders can fix these issues before any major equipment failures.

Effective Marketing

IoT helps businesses achieve a greater level of transparency in their supply chains. Such transparency can be used to develop marketing campaigns. For instance, businesses may have several socially conscious customers. These customers are interested in brands that use socially conscious marketing. Businesses can show such customers how each product goes through the supply chain and which processes are used in producing and delivering the final product. Using this technology, organizations can develop marketing campaigns that showcase their socially conscious business practices. This allows organizations to build stronger relationships with their customers and market different products in innovative ways.

The utilization of IoT in supply chain management will help businesses achieve more control and visibility over various business workflows. With this technology, business leaders can develop innovative business models that can make supply chains more efficient as compared to traditional models. However, businesses need to develop an IoT data management and analysis strategy to ensure optimal utilization of the technology. Along with different applications, business leaders can also analyze different trends that are presented by the collected data to harness the acquired data to its maximum potential.

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  • Gordon Cuthbert

    We are at a significant inflection point for the supply chains industry

  • Jayden Murray

    Opportunities for disruption are unprecedented.

  • Ross Connor

    The biggest challenge for IoT becomes how best to leverage the stacking of new innovative technologies to become a disruptor vs. being disrupted.

  • Paul Nicholson

    IoT delivers exceptional customer experience by empowering supply chain professionals

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Naveen Joshi

Tech Expert

Naveen is the Founder and CEO of Allerin, a software solutions provider that delivers innovative and agile solutions that enable to automate, inspire and impress. He is a seasoned professional with more than 20 years of experience, with extensive experience in customizing open source products for cost optimizations of large scale IT deployment. He is currently working on Internet of Things solutions with Big Data Analytics. Naveen completed his programming qualifications in various Indian institutes.

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