The IoT Supply Chain of the Future

There are many reasons why supply chain management could be affected in the coming years; political unrest, wars, Brexit, and even environmental concerns such as rising fuel costs, the conversion to low-sulphur fuel, and unpredictable weather conditions. All of these will impact the shipping of goods globally, and the inherent costs associated.

And we mustn’t forget about the consumer. The consumer of today has very exacting standards when it comes to how, where, and when they receive goods. Largely driven by companies that have disrupted the retail sector, the distribution side of things has had to shake things up to provide that all-important customer focus—it isn’t just about shipping a box from one place to another, quickly and cheaply.


If we agree the supply chain needs massive improvement to meet the challenges of tomorrow, we need to look at the common factor that unites all supply chains: data (the reliance on and the production of). The ability to analyse, interpret, and exploit data gathered from the supply chain will allow organizations to keep up with any level of disruption. The so-called “digital transformation” is partly fueled by the abundance of sensors that can now fetch data from parts of the business and the supply chain that were difficult to reach previously. Throw in the readily available analytics software, and businesses are now empowered to iron out any inefficiencies in the supply chain.


IoT is essentially everything that sits between the sensor and the destination for its data. The real power of IoT relies on data and assets having a digital footprint which can be shared in real time between the different links in the supply chain. This enables an overall improvement of the end-to-end process. While it’s no bad thing implementing your own local IoT solution, more benefit can be achieved by all nodes in the chain working together. To date, many systems, such as navigation, warehousing, and condition monitoring, operate in silos and, as such, the scope of the benefits that can be achieved is limited. Sharing data and insights throughout the chain in real time can enable an adaptive supply chain. This will, in turn, bring value to the end customer and enable the supply chain to react quickly to disruption.

The start of any IoT journey begins with the process of discovery. In this phase, an organization will begin to capture data from across the supply chain to seek out any weak or inefficient spots. Data is collected from simple IoT devices that are designed to capture information about the condition and location of goods and/or assets. What do you do with this captured data? Well, it needs to be interpreted and changed into action, whereby the supply chain begins to make decisions and changes using the analyzed data. Whilst all of this will initially be done manually, once sufficient data has been analyzed, the process can be automated—that is to say, locating tasks and processes that can be triggered by IoT data in real time.

Organizations can now start on the innovation phase of their IoT journey. Once you move away from fixing problems, you then go on to looking at creating value. Data being collected throughout the chain is now analyzed and fed back in order that the processes and the network can be continually improved. Another use for data analysis at this stage is to uncover potential new business models, or even revenue streams. The value of data rises ever more as partnerships are formed in this new ecosystem; also, the potential for new business opportunities increases further but lowers the cost at each node in the supply chain.

So, the supply chain of the future faces new sources of disruption—but it’s not all bad news. The process of digital transformation, along with IoT, affords a great amount of power and understanding to the supply chain. And there are also many, as yet undiscovered, ways of doing business, along with potentially new revenue streams that the uptake of these technologies affords. It’s a good time for all those working within the supply chain. Embrace the change!

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