What is the impact of IoT in Supply Chain Management?

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Using the Internet of Things (IoT) has become a rule among businesses for a variety of reasons. In this article, we will delve deeper into the reasons why it is so by discussing the impact of IoT in supply chain management. First, the reasons as to why your business needs IoT in supply chain management operations are not far to seek but worthy of mentioning.

It improves:

  • Efficiency
  • Transparency
  • Traceability
  • &
  • Security

With the above, your business can reduce costs by enabling the monitoring of the status of goods, capturing relevant data that not only reduces the complexities of supply chain management but also solves supply chain problems.

Beneficial impacts

Asset Tracking

A primary function of supply chain management (SCM) is to interact and communicate with geographically spread out teams to keep a tab on the location of goods. Implementation of IoT facilitates this by enabling the identification, tracking, and locating the status of them in real time. The IoT does this with Radio-frequency identification (RFID) tags and sensors. It makes it possible for the manufacturers to track the products not only from the ‘floor to the store’ but further beyond. For instance, the data gathered from them can be integrated into your business system for generating business intelligence-related metrics. In transportation, it offers more accessible ways to track the vehicle movement in real-time which could reduce the transit time and increase the utilization of them.


In SCM, we always revert to Kanban because of its universal appeal and applicability for reducing wastage. Take, for instance, the case of food, which is perishable. The IoT devices are found to provide valuable help in the minimization of food waste. It is possible for the carriers carrying food items to share details with the owners about temperatures, humidity levels, etc. So that they can adjust these parameters according to the nature of the items carried. And thus achieve a reduction in wastage through an extension of the life cycle. In the pharmaceutical industry, it adds immense value as the integrity of the drugs, primarily the lifesaving drugs, could be maintained when they leave the warehouse and until they reach the destination.

Inventory Management

IoT helps in determining the vacant space available within your warehouse, leading to optimum use of the warehouse space. Also, these devices, by recording the movement of raw material, prevent either over-stocking or under-stocking of them. Not only that, but some of these devices are smart enough to send alerts about the expiry of a product, which allows for prompt action.

Workforce Safety

System failures get notified in real-time, which acts as a protective shield for the safety of the workforce. It is so for a reason it detects risky scenarios in real time, which alerts the management to avert mishaps by taking immediate action.

Downside of IoT

It is not as if IoT is blessed with only positives. There is a downside to it; a major one relates to its ability to weaken the faith in society. The flurry of data and information, that these smart devices can collect, creates alarming concerns about privacy, and also, a severe breach of security can take place, resulting in the compromising of data having hazardous consequences. Businesses can also perpetuate unethical acts, which can harm their reputation. It calls for not only regulatory action but also restraints on the parts of companies and institutions in a deliberate manner. This can be accomplished by winning back trust to contain acts that weaken the faith of society in businesses and even day-to-day walks of life.

The practical utility of this article

This article is of use to your business as it does its bit to highlight the positive applications of IoT devices. It performs the functions of a watchdog with almost a fail-safe system. With the usage of which you can achieve multiple purposes. Right from the tracking of assets to the management of the warehouse to keep the safety of the workforce. By designing an appropriate system that is customized to your business needs, you can move a step forward in the improvement of your businesses, increasing the revenues and making whatever you are involved in profitable. In short, IoT makes your business stay agile, and sustain agility with practices that matter to what you do.

Keywords: BUSINESS, IoT, MANAGEMENT, Supply Chain Management, DEVICE, WAREHOUSE, DATA, REDUCE, REASON, IoT in Supply Chain Management

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