Smart Supply Chains. Using IoT (Internet of Things) technology to mitigate risk, reduce cost and improve resilience in supply chains

While businesses are still stumbling through the post-pandemic supply chain crisis, continued economic hardship and political instability have only posed more serious challenges to the continuity, integrity, and resilience of the global supply chain.

With booming demand amid labour shortagescontinued external shocks, and the sheer level of complexity, it becomes ever more important for businesses to build better forecasting systems to mitigate risk and to improve resilience in their supply chains.

Procurement and supply chain professionals are struggling to steady the ship due to:

  • Data mismanagement
  • Lack of asset transparency
  • Inefficient stock handling
  • Ineffective supply chain risk management
  • Ineffective transportation/logistic management [i]

Internet of Things (IoT) solutions help companies to overcome these challenges by deriving faster and more accurate information while keeping human input to a minimum. IoT innovations and instalments are a key enabler for digital supply chains, helping businesses to drive improved efficiency, transparency, and sustainability.

Enabling supply chains graphicMicrosoft 2017-Bringing the power of IoT to supply chain management  

What is the Internet of Things (IoT)?

IoT is a ‘network of physical devices embedded with electronics, software, sensors, actuators, and connectivity that enables the devices to connect and exchange data using cloud computing.  This creates opportunities for more direct integration of the physical world into computer-based systems,’ [ii] resulting in optimised process control, increased efficiency, and higher degree of automation.

IOT chartZetes-IoT in Supply Chain 

An IoT platform consists of a ’set of components that allows developers to spread out the applications, remotely collect data, secure connectivity, and execute sensor management. An IoT platform manages the connectivity of the devices and allows developers to build new mobile software applications.’ [iii] This connectivity enables data collection, exchange, and analysis, [iv] potentially facilitating improvements in productive efficiencyand capacity.

IOT platform graphic
Labs-IoT Platforms and how Apple AirTags fit in


The 5 ways IoT is revolutionising Supply Chain Management

  1. Inventory forecasting

‘The collection of data intelligence, with pattern analysis over time, enables accurate forecasting and intervention, should faulty operations occur. [ii]This equips inventory planners, production and procurement managers with better information and forecasting accuracy when making executive decisions on buying, manufacturing, and selling products.

For instance, ACE Hardware, a hardware retailer uses IoT solutions to track product orders and shipping status. IoT sensors ‘enable real-time Point of sale analysis which enables ACE to replenish inventory systems more quickly and reduce inventory holding costs.’ [v]

  1. Shipment and Asset tracking 

IoT systems such as RFID (Radio Frequency Identification) and global SIMs provide timely access to supply chain managers to locate the shipment or asset, enabling them to use real-time data to identify, locate and determine the status of an order or existing asset. Instead of logging the data manually or using traditional inventory devices, managers can now use software for automated data gathering and get a real-time update of the status of all assets.[ii]

For instance, for shipments, FedEx ‘uses cloud platforms that are fed data from the fleet, along with traffic models, weather reports, and other sources, to plot the most efficient routes for items being distributed through their network.’ii This cloud application improves the accuracy of decision-making, the precision of delivery forecasts and the speed of risk mitigation.

An example for asset tracking is Deutsche Post DHL Group, a leading logistics company, and Sigfox, a leading IoT service provider, partnered for an IoT process optimisation project for the supply chain of DHL’s German parcel network. The IoT trackers enabled digitalised administration and location of the roll cages used to transport parcels. This has not only increased the transparency of DHL’s supply chain but also contributed to improved customer service quality and operational cost saving. [vi]

  1. Maintenance & Repair

IoT-driven solutions can collect data such as temperature, humidity, and machine malfunctions. This can be used by cloud computing applications to monitor real-time operations and visibility. Photographic instruments can scan machine components, such as blades, to send alerts for predictive maintenance. [ii] Production facilities that integrate sensor networks into machinery can therefore increase up-times, reduce operational costs, and improve the overall quality of service.

For instance, GE Digital collaborates with FogHorn, a leading developer of edge computing AI software for IoT who developed a solution using its complex event processor to transform raw, streaming machine data combined with RFID into actionable parts and process quality characteristics. By analysing the large amount of RIFD sensor data produced during the production cycle, GE detects early defects and can develop smart, not scheduled maintenance. This helped GE to significantly improve yield in manufacturing operations. [vii]

  1. Quality Control

Additionally, IoT-driven solutions can also help product managers to monitor and control the quality of raw materials and productions. IoT scanners can scan raw materials for traits such as paint colour or fabric composition, to confirm quality and accuracy before they are used for a finished product. [ii]

For instance, Daihen Corporation, an industrial electronics and power company automates the quality control of its industrial transformers by using outsourced IoT solutions to ingest and aggregate multi-protocol streaming data collected from diverse assets and use the real-time analytics based on the cleansed data to determine [viii] inspection pass/fail and to meet the high industrial quality standard for electric transformers. This effectively reduced production time and labour costs in maintaining product quality.

  1. Storage/condition monitoring

Environmental sensors allow supply chain managers to track shipping conditions and proactively respond to accommodate changes. IoT solutions can gather data on the temperature inside vehicles, pressure, humidity, and other factors that could compromise the product’s integrity and trigger automatic condition adjustment. [ix]

For instance, software development vendors such as ScienceSoft uses Amazon’s AWS Cloud as a server. Data gathered from sensors are then transmitted to the cloud via GRPS. This IoT solution enables cargo temperature and humidity monitoring, which are then brought into customers’ existing vehicle management systems. [x]


The Benefits of implementing IoT:

Improved Transparency  

Incorporating IoT solutions into supply chain management is a good way for retailers to learn more about their products, customers, and demand and build relevant strategies. Data collected throughout the product cycle can help them to better understand the market and segment products with the target audience in mind. [ix]

Improved Efficiency

Smart route-planning tools and IoT tracking technologies increase the overall supply chain speed exponentially ix by shortening the feedback circle, reducing decision-making time, and proactively mitigating delay risks.

Companies with a cloud-based IoT system in place can address issues faster by giving access to and sharing the relevant data to all parties involved in the supply chain lifecycle. This data helps different stakeholders at different stages of the supply chain to shape strategies and scenarios according to their own roles and needs. This effectively minimises the impact of human error in data collection and improves the overall accuracy over time.

Risk mitigation

IoT solutions can leverage the impact of technology and machine intelligence to go beyond the constraint of human capacity and to identify unforeseen problems or saving points in the supply chain, such as resource leaks, inefficiencies, and machine failure. These connected systems then provide accurate and real-time tracking information and alert notification to different stages of the supply chain. This not only enables IoT as a steppingstone for full-on warehouse automation with little to no human supervision ix but increases business agility and adaptability to the uncertain global market.

Cost Reduction

By improving businesses’ ability to mitigate risks, IoT solutions can reduce the cost of unplanned downtime and save production time from scheduled maintenance by monitoring a variety of data and sending instant alerts with notifications if something goes wrong. Moreover, the historical data collected from IoT sensors can be used by analytic tools to predict future behaviour, leading to less unplanned disruption, increased production efficiency and capacity.

Improved Sustainability 

In a smart supply chain, IoT sensors can enhance corporate sustainability by updating managers with relevant information on how energy and resources are used within their supply chain and product cycle. By providing better information and raising awareness, IoT solutions enable executives to implement green strategies at various stages and integrate initiatives at scale, such as actively choosing renewables, electric vehicles, and energy-efficient spaces. [ix]


Ready to start your IoT project and enhance your supply chain management?  

Setting off your IoT project can be intimidating. Although IoT applications are adopted by multifaceted industries, businesses often face significant challenges due to:

  • Skill gap—requires expertise to design the solution and implement intensive training
  • Increased data storage challenges—requires data governance policies and data scientists to derive the right conclusions from IoT-based insights and collected data
  • Security threats—data processing and storage vulnerabilities can result in outside attacks and leaks, tanking the company’s reputation and increasing the cost of failure [ix]

Simple steps to get you started on building your IoT project

  • Set a clear business objective—identify your opportunities and pain points
  • Take a personalised[xi], company-wide approach[xii]—there is no one-size-fits-all solution
  • Seek external strategic and technical expertise—do not reinvent the wheel
  • Collaborate with your partners—establish vertical communication & agreement throughout your supply chain for IoT instalment

Procura can navigate you through different stages of your IoT project by helping you in:

  • Define–Understanding what your end goal is by working alongside you in defining your business requirements and outlining your technical challenges
  • Source–Identifying the best combination of technology, platforms, devices, and networking capabilities to bring it all together
  • Data Analytics-Leveraging the most forefront cognitive technologies in deriving supply chain efficiency
  • Transform—Implementing and deploying your personalised solution as many times as your plan outlined, making device management a crucial part of the process



[i] Plant Automation Technology 2021 – How Will IoT Impact Supply Chain Management In 2021?

[ii] CGN 2018 – IOT & Its Impact on Supply Chain Management

[iii] HCL Technologies 2021- What are IoT Platforms

[iv] Codovia 2019-What is IoT? And How can be applied in our real life?

[v] IoT One 2021-Hardware Retailer Uses Data Warehouse to Track Inventory

[vi] Sigfox 2021-Deutsche Post DHL, ALPS Electric Europe GMBH and Sigfox Launch Innovative Tracking Solution For Roll Cages

[vii] Foghorn 2018-GE Detects Early Defects and Improves Capacitor Production Yield with Edge Intelligence

[viii] Foghorn2018-Daihen Automates Production of Industrial Transformers, Improves Materials Quality Monitoring and Collaboration

[ix]Digiteum 2021- Impact of Internet of Things(IoT) on Supply Chain Management

[x] ScienceSoft 2021-Development of a Truck Temperature Monitoring Solution

[xi] Ubidots 2021- Supply Chain Management: How IoT is Boosting the Practice?

[xii] Beecham Research 2020 — Why IoT Projects Fail


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