Blog Post

IoT in Supply Chain Management

Supply chain management is changing massively with the Internet Of Things- let’s explore how!

Sanjay Kidecha,

IoT is a path-breaking technology adopted by many industries today. Retail, transportation, healthcare, logistics, aviation, supply chain management, and many more industries are acknowledging the manifold benefits of IoT solutions and technology. 

The Internet of Things shows its fullest potential in supply chain management among these industries. Many businesses are using the Internet of Things in supply chain management to keep track of their goods, stay organized, and remain competitive. How seamless it would be if the businesses could regularly manage their goods and keep track of their shipments with GPS! This is where the Internet of Things comes to transform supply chain management for businesses. 

Before we move ahead with how IoT impacts supply chain management, let’s briefly understand what IoT exactly is. 

So, what is IoT? 

The Internet of Things is the network of physical objects or “things” embedded with sensors, software, and other tools and technologies for the purpose of exchanging data with other devices and systems on the internet.

Basically, when the data is transferred or exchanged between two devices on the internet, without any human interaction, it is done through the Internet of Things. If we talk about the impacts of IoT on businesses, it provides businesses with a real-time glance at how their systems are working. Moreover, it provides them insights into the performance of supply chain and logistics operations. 

Why use IoT in Supply Chain Management? 

Why use IoT in Supply Chain Management? 

It is well-known that IoT has become a must-have technology for the supply chain management. But why is it so? Now, as we know what IoT is, we will explore why businesses use this technology for their supply chain management. 

Let’s dig into the reasons for using IoT in SCM. 

Track the location of goods at any time

IoT has simplified tracking the location of goods for supply chain businesses. IoT devices provide the real-time location of goods with the help of GPS during transportation. Moreover, IoT devices and sensors can be attached to storage containers or the products themselves. 

Track the movement and arrival of products 

IoT enables businesses and managers to track the movement of goods and predict how goods will move in the supply chain. With real-time tracking, companies monitor the goods during shipment, predict the delivery and even manage the risks associated with the delays. 

Monitor storage conditions 

Integrating IoT in supply chain management is an ever-growing trend. Many goods need to be stored in the warehouses during transportation. IoT enables monitoring the storage conditions, including temperature, humidity, exposure to the atmosphere, etc., to ensure the quality of these goods. 

Helps in inventory management 

Gone are the days when inventory management was done manually. Today, many businesses use IoT as this technology helps businesses with better and fast visibility over their inventory. Furthermore, it also simplifies inventory management for the managers. 

IoT in Supply Chain Management

How does IoT enable the smooth functioning of different sectors of Supply Chain Management? 

Supply Chain Management is a heterogeneous field, and there are a lot of operations to manage and look after. Internet of Things is used across various aspects of supply chain management such as communication, logistics, storage, shipping, and more. IoT makes sure all these aspects are functioning smoothly. 

Now, let’s explore how IoT is used across these sectors and maintains operational efficiency across the supply chain. 

Asset management 

IoT streamlines asset monitoring for the supply chain management. IoT has taken over the traditional inventory management devices and replaced manual asset management with tech devices like sensors, RFID tags, and others. Managers can rely on these tech tools to track each item and get insights, such as parcel contents, storage, etc. 


IoT improves the overall efficiency among all the parties involved in the supply chain. IoT makes it very simple for the managers to track drivers to track if everything is going on smoothly internally. The managers can also communicate with end clients and keep them updated about real-time location, climate conditions, and production. 


IoT has become a sustainability enhancer in recent years. IoT guides companies to comply with environmental regulations in a connected supply chain. With different IoT sensors and asset tracking tools, the managers can track if sustainable methods are adopted during transportation and shipment. 


IoT technology helps in automating warehouse operations for large logistics companies. It also facilitates warehouse condition monitoring and control using inventory drones and other technologies. 

What are the Benefits of using IoT in Supply Chain Management? 

What are the Benefits of using IoT in Supply Chain Management? 

A proper application of IoT technology can enhance supply chain efficiency and performance. Now, let’s have a closer look at some of the advantages of IoT in supply chain management. 

Higher speed- IoT gives access to smart route planning tools to increase overall supply chain speed and ensures faster decision making, mitigating risks, and avoiding delays. 

Fewer errors– IoT reduces the chances of human errors in the supply chain cycle with the help of sensors and other tracking systems. 

Better segmentation– IoT enables business managers to understand their target audience and market segment. 

Better fleet management- IoT gives real-time insights into the fleet’s operations and enables companies to provide real-time tracking to their end customers.  

More accurate-  A cloud-based IoT maintains top-level transparency between all the parties involved in the supply chain cycle. 

Last-mile deliveries- IoT devices give detailed information about the goods and inventory so that companies can optimize last-mile deliveries. 

What are some of the limitations of IoT for logistics and supply chains?

What are some of the limitations of IoT for logistics and supply chains? 

The role of IoT in supply chain management is exemplary, but it has its share of challenges. So, we will address some of the common challenges of IoT for the supply chain. 

Security threats 

As the number of connected devices through IoT technology is increasing, supply chain management becomes prone to security threats, hacking, attacks, and data leaks. 

Data storage challenges 

One of the key advantages of the Internet of Things is that it enables storing a large amount of data. However, managing and processing all this data might become challenging for the managers. 

Connectivity errors 

IoT relies on a stable internet connection in order to work seamlessly. However, during the shipment, there might be network fluctuations, and the device might not be connected to the internet. This results in disruption in the smooth functioning of the supply chain. 

Brands that made it to top using IoT for their supply chain. 

Many brands have set great examples of how connecting IoT and the supply chain can do wonders. So, given below are some examples of brands using IoT to the best of its potential. 


Amazon has to be in this list without any doubt. Ever since the company integrated fleets of connected robots for warehouse management in 2012, it has excelled in using IoT in the supply chain. Amazon implements IoT in its warehouses and uses its workforce for other productive tasks like packing and wrapping. 


The company uses a connected cloud-based system to track the shipment of car parts from different cities and countries. By using IoT in supply chain management, they easily track the deliveries to international suppliers. 


Decathlon is a well-known sports retailer using IoT technology like radio frequency identification for its checkout systems in more than 400 stores globally. The tracking technology makes sure that the products are delivered to the end customers on time with minimum delays.  


Nissan uses robots and machine-learning techniques at its plants to manage the supply chain efficiently. It also deploys IoT technology in its plants in Sunderland and UK. 


The role of IoT in supply chain management has been pioneering till now. It facilitates tracking, monitoring goods, maintains transparency and effective communication, and a lot more. Thus, integrating IoT into SCM transforms both small and large businesses alike. 

If you wish to integrate IoT in your supply chain, hiring a skilled IoT app development company will be quite helpful. Lastly, to ensure seamless implementation of IoT into your supply chain, get in touch with us.

Sanjay Kidecha

Sanjay Kidecha is the Chief Finance Officer at Kody Technolab and a Fintech geek. With one foot in finance and the other in tech, Sanjay likes to write on emerging Fintech trends, ideas, and how-to guides to keep industry leaders updated with the ever-changing world of fintech!

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