Barbara Babati 02.11.2017 8 min read

Can IoT revolutionize supply chain management?

Logistics is a cornerstone of the global economy. However, its inefficiencies are holding the industry back from further growth. Logistics is a fragmented industry with typically low margins and a lack of visibility into processes and the route and status of assets. To become more profitable and productive, logistics must embrace new revolutionary technologies.

Cisco and DHL estimated in a report released last year that $1.9 trillion dollars of economic value could be created using Internet of Things (IoT) devices and asset tracking solutions.

Can adaption to IoT make a difference in supply chain management and revolutionize its processes?


The Internet of Things


The clearest definition of IoT is that it is a network of connected physical objects that traditionally have not been connected to the internet. Originally, the Internet has been developed to connect computers to one another over the network. Now, it’s possible to use the Internet for connecting physical objects by placing them sensors or tags that are tiny and affordable computers themselves.

Connecting physical objects and devices means does not only mean that these will be able to communicate with one another over the network that is connecting them, but also provide invaluable behavioral data that can be turned into insights and straightforwardly into business value.

The collected data could be utilized in supply chain management. Data-driven decisions will improve the agility of operations, becoming more efficient, and to increase profit margins eve for complex supply chains.

1. Asset tracking

Real-time visibility is a priority in logistics now. Knowing the exact location and arrival time of the assets does not only provide business value in terms of better planning, optimization, and inventory accuracy, but it’s also something that is expected by the customers.

Besides better transparency, it also offers integrity control to ensure that the right assets arrive at the right time at the right place in the right quantity and quality for the right price. This is especially important in case of sensitive items, for example, medicines, microtechnology, or perishable items.

Additionally, tracking assets ensures protection, safety, and damage monitoring.

Executing asset tracking with IoT is possible by using sensors or tags that can seamlessly send data through a gateway.

2. Automate business processes to eliminate interventions

To achieve greater operational efficiency and streamline value chains, automation of business processes must take over to eliminate the need for human intervention. Industrial IoT needs to be self-organized, self-configured, self-healing, as well as scalable to large sizes while security must remain strong.

Devices that communicate with each other through a network of sensors will generate an enormous amount of both structured and unstructured data. It’s important to have a solution in place that is transforming the data into actionable information so it can be utilized for decision making.

3. Improve quality and predictability

Tracking assets allow us to know the status and location of the goods, providing greater predictability throughout the entire value chain. The predictability helps to streamline the supply chain and therefore it improves the quality of the operations. This has a straightforward effect on the customer experience also. With more accurate data on the shipments and shortened delivery times, the customer satisfaction is expected to increase.

With the available data, it’s easier to identify bottlenecks in the supply chain and create processes that are more efficient and give a competitive edge to the operations.

4. Better insights

All connected physical objects and devices will generate large volume, velocity, and variety of data for businesses that have an immense business value. More data means that businesses have more accurate insights on processes and therefore they can make better data-driven decisions.


Seamless data exchange is the key


IoT devices need to be able to share the data seamlessly. A cloud-based Integration Platform as a Service (iPaaS) is the right tool for enabling data sharing since IoT devices can have an APIs available.

As the number of IoT endpoints is increasing it will have two results:

1. The volume of data will substantially increase

2. There will be a need for a solution that can handle complex integrations

This is where an iPaaS comes into the picture.
It can collect all the data from the IoT endpoints, transform them, translate them, and distribute to the right stakeholders.

As expected, there will be 50 billion IoT devices connected by 2020 and at that point, there will be a need more complex integrations and API management. Our iPaaS can integrate these endpoints with any systems, apps within the organization, as well as with partners regardless of the data format.


Can IoT revolutionize supply chain management? Yes, it can. 

The IoT revolution has just started, but looking at the potential of the technology allows us to assume that it will have an enormous effect on logistics and SCM. With using IoT technologies, we will be able to optimize how people, systems, and assets work together. ¨

We are supposed to see benefits across the entire value chain, such as warehouse operations, freight forwarding, last-mile delivery, while we will be able to improve the security of the assets, improve customer experience, and introduce new, revolutionary business models.

However, implementation of IoT in supply chain management will require collaboration among different players, which requires trust and willingness to invest from all parties.


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