IoT in Supply Chain Management: Benefits and Use Cases

Yurii Laba
Written by Yurii Laba
15 September 2023
8 min read
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Get to know how IoT revolutionizes supply chain management practices. Explore benefits, adoption challenges, and use cases.

Back in 2021, the size of IoT in the Global Logistics Market was worth $37.41 billion. It’s projected to grow at a CAGR of 14.0% reaching a value of USD 93.85 billion by 2028. IoT has begun to reshape business operations in various domains. Among others, it concerns Supply Chain Management (SCM).

Using IoT in SCM promises a fundamental shift towards a more connected, efficient, and transparent global trade environment. Read this post to discover how to utilize IoT in SCM, explore IoT in supply chain case studies, and review the benefits and challenges related to the adoption of IoT.

How to use IoT in supply chain management

IoT revolutionizes the way companies track, analyze, and optimize their supply chain operations, from inventory and warehouse management, transportation, predictive maintenance, and asset tracking to demand forecasting, waste management, and more.

Read also: Predictive Maintenance Domain Overview

What is an example of IoT in the supply chain? Examples of IoT devices that may be used in supply chain management include:

  • Radio Frequency Identification (RFID) tags
  • Global Positioning System (GPS) trackers
  • Temperature and humidity sensors
  • Smart shelves, pallets, and containers
  • Telematics
  • Near-field communication (NFC) devices

Take a look at the detailed infographic below. It shows how IoT-driven solutions connected to networks ensure continuous data flow and enable real-time supply chain visibility.

The use of IoT in supply chain management

Now, let’s review in detail how IoT is used in supply chain management.

Location-tracking

IoT solutions for supply chain, such as the above-mentioned GPS trackers and RFID tags, can be attached to products or shipments to enable real-time and periodical location tracking.

Location-tracking devices transmit data on the whereabouts of shipments, ensuring transparency throughout the supply chain. They facilitate on-the-go route adjustment and enhance customer trust in shippers.

Storage condition monitoring

Monitoring storage conditions is essential, especially for easily perishable or sensitive goods and products.

Factors that are often monitored are:

  • Temperature
  • Vibration
  • Pressure
  • Humidity
  • Light exposure
  • Gas composition

IoT sensors can be placed in storage facilities or transport vehicles for 24/7 monitoring and sending alerts about any deviations from optimal condition levels.

Forecast the movement and the arrival of the product

IoT-based supply chain management systems can be enhanced with predictive analytics capabilities. By analyzing data from sensors on vehicles, roads, and weather patterns, companies can forecast the arrival time.

This feature enables companies to make timely preparations at receiving points, optimizing operations and reducing downtime. It also helps with better resource allocation, customer communication, and inventory management.

For additional information on IoT data analytics, read other other blog post.

Improve contingency planning

Through their continuous data collection and feedback, IoT devices provide an in-depth view of every operation within the supply chain. It helps businesses identify potential bottlenecks, failures, or external threats much earlier, and:

  • Devise alternative routes or strategies
  • Prepare backup suppliers or distribution methods
  • Optimize resources, ensuring minimal disruption to operations

IoT benefits the consistency and stability of supply chain operations on a large scale.

Enhance transport safety and maintenance

Transportation is a critical link in any supply chain, and ensuring the safety and maintenance of transport vehicles is paramount.

IoT supply chain solutions play a notable role in this through means of:

  • Vehicle health monitoring
  • Driver behavior and safety tracking
  • Collision avoiding

IoT enhances labor safety and equipment performance in supply chain operations.

Warehouse automation

Management of the warehouse and all the assets stored in it can present labor safety and property damage risks. When it comes to warehouse automation, IoT in SCM can offer:

  • Inventory management
  • Safety monitoring
  • Automated sorting and routing
  • Energy use monitoring
  • Labor monitoring

It’s safe to claim that IoT for supply chain management can streamline and automate warehouse operations making them more efficient and error-free.

Enhance loading and unloading operations

Loading and unloading processes are known to be rather labor and time-intensive and hazardous to human workers.

Regarding such operations, IoT and supply chain management paired together enable for:

  • Weight and volumetric load monitoring
  • Dock monitoring
  • Automated loading and unloading
  • Sending preventive alerts

With IoT, loading and unloading can be streamlined and human involvement in them can be minimized.

Should you need a trusted partner for integrating IoT solutions in your digital environment, reach out to AI and ML engineers from Intelliarts.

The use cases of IoT in supply chain management

Let’s review real-life IoT in supply chain case study implementation by Intelliarts, a software development company, and Prylada, a provider of a complex IoT solution.

Optimeas case study

The challenge was to store massive amounts of data collected from IIoT and edge devices in a more centralized way. It should also enable aggregating, processing, and visualizing of data in a convenient and efficient manner.

The solution was full-cycle development, testing, DevOps, and deployment of the SaaS software enabling what was requested by the customer. It included a big data processing pipeline that allowed to transform the IoT data into actionable insights and then to data-driven decisions. The work contributed to building ML models for the customer later on and providing better products and services to end-users.

Learn more about the case of processing and analyzing extensive IoT data for Optimeas.

Solution for smart warehouse monitoring

What is Prylada IoT solution

The challenge is to enable the monitoring of assets and goods in different storage locations and obtaining data insights. This should enhance the safety of stored goods, minimize emergencies, and optimize storage space use. Additionally, it should address issues of insufficient stock visibility, order processing delays, inventory damages, etc.

To enable 24/7 automated monitoring for air temperature and humidity, load distribution, lighting level, and eight other parameters, the Prylada team offers to add Prylada to existing Warehouse Management System (WMS) and Enterprise Resource Planning (ERP) solutions. This way Prylada devices (Gateways) connect directly to sensors, which enables to aggregate data, conduct remote configurations of equipment, and orchestrate data insights.

Discover additional details about the smart warehouse monitoring solution by Prylada on their website.

Amazon robotic warehousing

The challenge was to increase safety at the workplace, as Amazon workers had hurt at twice the rate of other warehouses. Besides, the world’s largest retailer handles large volumes of products, which makes supply chain operations complex. So, there also was the need to enhance the efficiency of warehouse operations.

The solution was the extensive use of robots and IoT devices inside warehouses. It enabled to automate tasks such as stocking, packaging, real-time inventory tracking, predictive analytics, and more.

Learn more about Amazon’s smart robot warehouses from the video:

Big appliance manufacturer case study

The challenge was to help eliminate repeated and unexpected equipment failures on the production line of a manufacturer. The company records data for all tests and measurements made for each part along the production process. Yet, they require a solution that would enable them to detect bottlenecks in production equipment performance.

The solution was an ML model created by Intelliarts upon the Extreme Gradient Boosting classifier algorithm. Based on the database of 14.3 GB of data received from monitoring IoT devices, the solution was trained to predict which parts of the equipment are the most likely to fail. The resulting ML model showed over 90% accuracy in equipment failure prediction, which helped our client to reduce the maintenance cost by 5%.

The experience of Intelliarts with IoT is vast, so you can trust us with the development of an IoT in SCM solution or any related matter.

Benefits of the Internet of Things in supply chain

Adoption of IoT is one of the essential ways of digital transformation, the value of which is hard to overestimate. Let’s review how does IoT benefit the supply chain:

  • Higher speed. IoT allows real-time data collection and sharing. It speeds up decision-making processes in supply chain management leading to reduced delays and wait times.
  • Higher accuracy. With automated data collection, human errors in recording or tracking inventory are minimized. In the meanwhile, access to precise data ensures optimal resource allocation.
  • Improved flexibility. IoT offers adaptive capabilities in adjusting to changing demands or disruptions. This ensures a smooth flow of goods.
  • Better segmentation. IoT provides detailed data insights, enabling businesses to segment their supply chain processes more efficiently. It helps in targeting specific market demands.
  • Increased efficiency. Automating processes through the usage of IoT in supply chain and logistics not only cuts costs but also ensures that resources are used to their maximum potential.
  • Enhanced predictability. IoT can help to forecast trends by providing data for analysis. With a better understanding of patterns, businesses can prepare for future demands.
  • Better sustainability and reduced adverse environmental impact. IoT devices can monitor and optimize energy usage and wastage in the supply chain, leading to more sustainable operations and reducing carbon footprints.

The benefits of IoT in supply chain management are significant. They can bring concrete value, reflected in financial performance, for businesses from various domains.

If you intend to get the most out of your IoT project, don’t hesitate to reach out to engineers from Intelliarts.

Issues with adopting IoT in supply chain management

Issues with the adoption of IoT in supply chain management

Now, let’s get to know the potential challenges with the adoption of IoT-driven solutions in supply chain management:

  1. Security concerns. IoT devices can be vulnerable to hacking, risking data breaches and operational disruptions in the supply chain.
  2. Integration complexity. Harmonizing legacy systems with new IoT solutions might require significant time, resources, and expertise.
  3. Data overload. Handling vast amounts of data from IoT devices can overwhelm existing systems, necessitating better data management solutions.
  4. Dependency on connectivity. A consistent internet connection is crucial for IoT. Any connectivity issues can disrupt supply chain operations.
  5. Scalability issues. As businesses grow, ensuring that IoT solutions scale effectively to accommodate increased loads can be challenging.
  6. Interoperability challenges. Different IoT devices and systems might not easily communicate or integrate with one another, requiring additional solutions or adaptations.

The Intelliarts team has substantial experience creating software solutions for IoT and can help you avoid pitfalls in the project.

Additionally, you may discover more about the role of data pipelines, vital for any development project, including ones, related to IoT, from our other post.

Conclusion

Every example of IoT in supply chain implementation and how does IoT benefit the supply chain. The promise of IoT is not just in the devices but in the transformative power of a fully connected, data-driven supply chain.

Consider Intelliarts as your trusted provider of the Internet of Things and supply chain software solutions. With over 24 years on the market delivering successful projects, we can help you get the most out of your investment in IoT in SCM. We also provide AI consulting services to help you leverage the power of artificial intelligence for your business. Reach out to us with your idea and let’s discuss it.

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FAQ

1. What is the future of IoT and supply chain?

Integration of IoT in supply chains will enhance real-time tracking, efficiency, and automation, revolutionizing logistics and distribution.

2. What are the risks of using IoT in supply chain management?

Security vulnerabilities in IoT-based supply chain management systems can expose sensitive data, risking integrity and compliance.

3. What is the cost of implementing an IoT solution for the supply chain?

Development and implementation costs vary widely, from $10,000 for small implementations to hundreds of thousands for extensive, enterprise-level solutions. Contact Intelliarts for a project cost estimation.

4. How can the Internet of Things and supply chain improve sustainability?

By optimizing resource use and reducing waste, the IoT and supply chain union can enhance sustainability.

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