IoT in Supply Chain: Benefits, Challenges, and Real-World Examples

Dealing with suppliers, customers, logistics, and inventory isn’t easy. The global supply chain management market expands at 9.4% each year as businesses try to keep up with this growth by adopting innovations. And in this case, IoT in supply chain management is taking center stage.

IoT supply chain management is transforming how companies monitor and control their supply chains, improving visibility, reducing costs, and enhancing operational efficiency. The Internet of Things (IoT) is a solution capable of automating supply chain processes, offering better visibility and control, optimizing inventory, and enabling predictive maintenance. When implemented through the right tools, like WebbyLab’s 2Smart Standalone platform, custom IoT software can make everything run smoothly. Want to leverage this tech for your operations? Read our expert post.

In this article, WebbyLab will explain the role of IoT in supply chain management, covering the benefits, challenges, and real-world examples that demonstrate this technology’s tangible impact. Count on our four-year experience in the Internet of Things to drive your business into supply chain excellence.

Using 2Smart Standalone to monitor IoT devices within the supply chain.

The State of IoT in Supply Chain Management

The Internet of Things is really catching on to the supply chain industry. The use of IoT in logistics has grown exponentially, providing companies with the ability to monitor deliveries in real-time and track inventory more accurately, making operations more efficient. Future Market Insights predicts that by 2033, the market for this tech in the sector will surge from $12.4 billion in 2023 to $41.8 billion. The same study outlines the following factors of such rapid growth:

• The increased demand for supply chain transparency and traceability.
• The desire to enhance operational efficiency and lower expenses.
• The opportunity for real-time, remote monitoring and tracking of products throughout the supply chain.

• The goal to streamline inventory management and reduce stockouts.
• The prospect of minimizing risks associated with product damage or spoilage.
• The need for real-time data to make informed decisions and keep up with quality standards.
• The opportunity to simplify logistics and select more efficient transportation routes.

Tightly connected to logistics, the supply chain industry is fueling the latter’s growth through the adoption of IoT. IoT devices are being installed in the logistics systems to track deliveries and exchange information in real time. Consequently, the global spending on IoT solutions in logistics is poised to soar from $39.6 billion in 2022 to $114.7 billion by 2032.

The Role of IoT in Supply Chain and Logistics

Imagine you’re running the supply chain where your staff knows where your goods are, what condition they’re in, and where they are heading — all of this in real time. That happens when you merge the Internet of Things and supply chain processes. By integrating IoT and supply chain management systems, businesses can automate processes like inventory management, shipment tracking, and predictive maintenance. Here’s how it works:

1. The IoT supply chain starts with the manufacturer or producer, who requires process automation, remote monitoring, and production optimization.
2. The IoT sensors placed throughout the supply chain collect real-time data on the location, condition, and movement of goods.
3. The gathered data moves through a communication network to the centralized IoT supply management platform.
4. Then, there’s data aggregation, where incoming information from various sensors is compiled into a single dataset.
5. The organized data is then cataloged into a structured repository of information.
6. After that, the data is analyzed and used to optimize various supply chain aspects, including warehouse management, logistics, or demand forecasting.

The process of IoT data collection throughout the supply chain.

Here’s a list, though not exhaustive, of operations that IoT supply chain logistics can optimize:

• Tracking and monitoring assets
• Managing inventory
• Predicting maintenance needs
• Enhancing visibility in the supply chain
• Monitoring temperature and environmental conditions
• Observing and managing the condition of goods
• Optimizing routes
• Automating warehouse processes
• Managing suppliers and vendors
• Using analytics for supply chain improvement
• Managing risks and resilience
• Forecasting demand
• Ensuring compliance and regulatory reporting
• Managing the cold chain
• Enhancing customer experience and transparency

With IoT-based supply chain management, businesses can monitor every aspect of their supply chains, from asset tracking to route optimization and demand forecasting. Owing to the straightforward IoT supply chain management process, supply chain operators can check where the products are in real time, whether in a warehouse or waiting on a store shelf. They can also monitor the temperature, lighting, humidity, and other parameters to maintain specific storage conditions. Finally, they can estimate arrival times more accurately and trigger post-delivery administrative tasks like payment or quality control.

Benefits of IoT in Supply Chain

Leveraging IoT in supply chain management is highly promising, given the plethora of advantages this tech brings. Let’s look at some of them:

Enhanced Visibility and Tracking

The Internet of Things is the eyes and the ears of the entire supply chain. The Internet of Things in supply chain management offers real-time tracking and automated data collection, which are essential for optimizing processes and improving the decision-making process. It helps monitor the product’s location, movement, and condition, as well as inventory levels and internal policy compliance. This end-to-end tracking contributes to a smooth flow of operations.

Improved Efficiency and Productivity

Using IoT in supply chain means dealing with a lot of data that can be analyzed to introduce operational improvements. Beyond that, supply chain operators benefit from the automation of certain processes, like inventory management, shipment tracking, predictive maintenance, and more.

Optimized Inventory Management

The Internet of Things lets supply chain operators monitor inventory levels in real time. It helps them handle their goods more precisely, preventing overstocking or stockouts and ensuring they always have the right products available at the right time.

Enhanced Demand Forecasting

IoT is how businesses gather and study real-time data, ultimately making more informed predictions about future demand. As a result, supply chain operators adjust their production and distribution strategies following the needs of consumers.

Reduced Costs and Risks

The impact of IoT on supply chain management is profound, as it allows businesses to predict issues, streamline inventory management, and reduce operational risks. Cost efficiency is another benefit of leveraging IoT in supply chain management. The Internet of Things lets businesses optimize delivery routes, predict maintenance needs, avoid overstocking, dodge product damage or spoilage, and reduce manual labor — factors that make the supply chain more sustainable and less risky.

Most Used IoT Devices in Supply Chain Management

Integrating the Internet of Things in supply chain processes involves using specific devices. Here are the most common ones:

• RFID tags and readers. Radio-frequency identification tags and readers that use electromagnetic fields identify and track products throughout the supply chain automatically and wirelessly.
• GPS trackers. These devices leverage the global positioning system and let supply chain operators receive the precise location data for shipments in transit.
• Sensors. These tiny devices help gather data on various parameters like temperature, humidity, pressure, vibration, movement, and so on.
• Actuators. Actuators trigger specific actions following the data received from sensors. For example, they can automatically adjust warehouse temperature when conditions become excessively hot or cold.
• Smart shelves. These shelves leverage IoT technology to monitor inventory levels in real time.
• Robotic pickers. These devices, equipped with sensors and actuators, automate the picking and packing processes in warehouses.
• Wearables. The latest wearable IoT trends, like smart glasses and wristbands, allow supply chain workers to access inventory and shipping data hands-free.
• Drones. These devices are used for aerial surveillance and delivery.

Challenges of IoT in Supply Chain

While leveraging IoT in supply chain is highly beneficial, it poses certain difficulties. Let’s look at these potential hurdles in greater detail:

Data Security and Privacy

Devices and sensors collect a lot of IoT logistics and supply chain data, which has to be thoroughly protected. Creating a secure and compliant IoT architecture is no small feat. Therefore, businesses may require an expert team capable of introducing robust security measures.

Integration and Interoperability

The IoT devices and sensors used throughout the supply chain often come from manufacturers. This poses a challenge in integration and interoperability. Yet, leveraging universal communication protocols might help create a cohesive supply chain system.

Scalability and Complexity

As supply chain operations expand, the IoT system’s scalability becomes a concern. Scaling up to meet the growing demands requires careful planning in order to deal with the complexity of adding more devices and data sources.

Lack of Standards and Regulations

Another challenge that supply chain operators may face is the absence of standardized protocols and regulations for IoT devices. It’s essential to follow the relevant industry regulations and collaborate with a legal team to ensure the system’s compliance.

Real-World Examples of Using IoT in Supply Chain and Logistics

It’s always best to learn from the real-world leaders who implemented the Internet of Things into their supply chains. Take inspiration from the following IoT in supply chain examples:

• Walmart. Walmart uses IoT to monitor temperature, energy use, and other environmental conditions during the storage of fresh produce. They automatically adjust their HVAC systems to ensure the highest quality standards for the stored food.
• Amazon. In 2022, Amazon has invested $1 billion into warehouse robotics. The company decided to leverage this tech to reduce manual labor and offer faster delivery times.
• Maersk. This shipping company uses IoT to track containers in real-time. Being responsible for 18% of global container trade, Maersk has invested in the Internet of Things to improve visibility, safety, and cost efficiency in its sea freight operations.
• Smart parking in Amsterdam. The city of Amsterdam has introduced an IoT-based smart parking system that allows drivers to track parking space occupancy.

Webbylab Experience in IoT-Based Supply Chain Management

WebbyLab has a profound background in IoT development and consulting, spanning over four years. During this time, our team has completed over ten projects and created three IoT products of our own. Our expertise allows us to deliver a range of services that can streamline your IoT supply chain management:

• Providing consultancy services for the implementation of IoT solutions.
• Expertly selecting the necessary hardware to address specific tasks.
• Building integrations with hardware or creating custom software tailored for supply chain analytics and tracking solutions.
• Developing analytical software or recommending ready-made tools.

We’re also proud to introduce our own product, 2Smart Standalone — a versatile platform for monitoring and automation. It can serve as a solution for accelerated launches or act as a proof of concept before jumping into the development of customized solutions. 

Additionally, our platform seamlessly integrates with devices and gateways from Teltonika, offering ready-made solutions for the supply chain industry. For example, their EYE Sensor can connect to 2Smart Standalone and track air temperature, humidity, and other parameters to ensure the safety of products during transportation. Besides that, WebbyLab can develop Teltonika or other manufacturer-based solutions, as well as customized ones for specific supply chain links or entire supply chains with diverse hardware needs.

 Using Teltonika devices and the 2Smart platform for supply chain automation.

At WebbyLab, we’re committed to understanding our clients’ businesses thoroughly. We go above and beyond, even in areas outside our typical scope, to deliver a fully operational product. To witness this dedication firsthand, explore our top IoT case studies.

Optimize Your Supply Chain with WebbyLab

The Internet of Things is a transformative force behind the supply chain industry. It offers unprecedented visibility and efficiency, benefiting everyone involved in the supply chain processes. Supply chain management using IoT helps businesses monitor inventory, track shipments, and ensure the right products are in the right place at the right time, minimizing waste and inefficiencies.

If you aim to integrate IoT in supply chain management, count on WebbyLab as your trusted partner. With our profound background and successful IoT solutions, we’re here to help. All you need to do is just reach out to our team for a consultation.