IoT & The Supply Chain: Looking Forward

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Technology is growing at a rapid pace. The days of payphones, floppy disks, and dial-up internet are all but forgotten, replaced by smartphones, flash drives, and Wi-Fi. With this growth comes change that is revolutionizing the way that companies interact with their consumers and suppliers. A rising catalyst of this change is the Internet of Things (IoT). Although IoT technology is still in its infancy, it has potential to play a much more important role in the future of the supply chain. Even now, applications are being developed to capture data from “things” equipped with sensors, barcode labels, GPS antennae, and other devices, move that data across the internet, and use it to improve supply chain operations. IoT technology has the capacity to improve how inventory, transportation, and warehouse operations are managed, and in addition, help make replenishment decisions, refine delivery routes, and generate better demand forecasts1.


While the IoT has great potential to improve the supply chain, this growing technology also comes with its own set of inherent risks due to its “rookie” status in supply chain management. According to MHI’s 2017 annual survey on next generation supply chains, 80 percent of respondents believe that the digital supply chain will be the predominant model within the next five years2. Others estimate that IoT technology is about 10 years from maturity. With these outlooks in mind, companies need to be informed and ready for whatever potentially awaits their IoT-driven supply chain management systems in the future. A primary concern is how to analyze and use the flood of data that comes in from the IoT. Companies need to plan in advance how they will store and use the collected data in order to benchmark and improve operational metrics. There is plenty of potential within the wealth of information provided by the IoT, but it is only valuable when companies know where to look within that database. One benefit from this organized data would be the ability for companies to use it for predictive analysis3. This allows for scenario-based contingency plans in the event that there are any delays or disruptions in the supply chain. Having these plans in place would allow 3PLs and supply chain partners to better support shippers as they analyze the relevant data and continue to develop more effective responses.


The growing trend with IoT is its expanding integration into more devices, machines, and vehicles as the technology enables the digital supply chain to become more aware and able to better solve inefficiencies. As a result, real-time monitoring continues to become more efficient as the amount and sophistication of sensors and IoT infrastructure improves. Sensors on trucks and trailers are becoming more abundant and with that, smarter and more capable of monitoring different conditions4. For example, IoT is now being used in loss prevention and can record damage to goods in real-time at the exact location because of these sensors. In addition, IoT-driven supply chain systems are helping warehouses find the “right” SKU or the “right” shelf, even in the event of a breakdown or unexpected situation, and automatically re-order products when inventories reach certain levels5.

The list of “things” that can be integrated into an IoT-based system is vast and constantly growing, so the key objective for shippers should be focused on managing, monitoring, and capturing value from these smart devices, then making sense out of all the data. By doing this, companies will be able to determine what data is critical for their consumers and suppliers, and what is not-so-critical6. Ultimately, focusing on the “critical” data and then applying it to the supply chain management system will be what allows IoT technology to create value for companies and their consumers in the long run.


  1. http://www.inboundlogistics.com/cms/article/supply-chain-management-its-iot-time/
  2. http://www.logisticsmgmt.com/article/the_evolution_of_the_digital_supply_chain
  3. http://www.inboundlogistics.com/cms/article/top-5-things-to-know-about-iot/
  4. http://www.logisticsmgmt.com/article/the_evolution_of_the_digital_supply_chain
  5. http://www.logisticsmgmt.com/article/2017_technology_roundtable_are_we_closer_to_intelligent_logistics
  6. http://www.scdigest.com/ontarget/17-08-14-1.php?cid=12859&ctype=content