Written by: Greta Froise (CPIM, CSCP), Managing Consultant, Bizzco

Like it or not, we are living in a connected world which is not only changing the way that we live and work, but also the world around us.

The ‘Fourth’ Industrial Revolution has begun on a global level, promising a radical change in the supply chain technologies that are necessary to support the inventory management and distribution processes of probably all industries that are driven by a customer demand for increasingly faster delivery.

Until quite recently, the Internet has been made up entirely of computers that are connected to one another over a series of networks. Today, however, this is no longer the case. Instead, it encompasses a wide range of technologies that include wireless local networks (e.g. RFID, Wi-Fi, Bluetooth and others), mesh networks, and wide area connections (e.g. 3G, LTE, 5G), as well as wired connections.

We have entered a unique period in the life of the Internet – a sophisticated network of objects, embedded with electronic systems that enable them to collect and exchange data. This massive assortment of data collections and inter-connections is known as the Internet of Things (‘IoT’) and is the driver of this Fourth Industrial Revolution. The ‘IoT’ is transforming the world around us.

Opportunity and innovation is exploding in every sector of society, with the inter-connectivity of billions of everyday devices and technology being built into almost everything we do and have, e.g. vehicles, buildings, fridges, TV sets, security systems, even pallets, shoes, clothing, watches, eyewear, credit cards and many other elements. They are integrated with sensors, actuators, wireless Internet network capabilities, computer programs, and electronics in such a way that allows these objects to collect and exchange data.

Clearly, as we move from 15 billion or so connected devices to some 50 billion by 2020, we are on the way to what will certainly be an exciting journey. The promise of the ‘IoT’, contrary to popular belief, is not just about your alarm clock or your house knowing when you go out. It’s about:

  • Connecting things that we do not associate with information technology
  • Creating a huge treasure trove of data (called ‘Big Data’)
  • Enabling, in the case of inventory management, the creation of smart warehouses

The ‘IoT’ will have a major impact on areas such as:

  • Warehousing
  • Logistics
  • Safety and security
  • Workforce skills
  • Operational efficiency
  •  Customer experience

Creating Supply Chain Operational Efficiencies

Customer expectations are at an all-time high. Businesses today must create supply chain-based operational efficiencies if they want to maintain strong customer service.

As a way of seamlessly joining the physical and digital worlds, optimizing supply chain operations and improving the customer experience throughout the value chain, these businesses are turning to the innovations related to the Internet of Things (IoT).

Business is experimenting with ways to use the intelligent, connected devices to reshape experiences, offer new services and enter new markets by creating digital ecosystems. Look at the continually expanding ranges of APP’s that are available on Smart Phone Technology.

An area that stands to benefit greatly from the IoT movement is the supply chain and some of the operational efficiencies that the IoT can foster include:

Inventory Tracking

Using radio frequency identification (RFID) and barcoding technologies, supply chain entities can establish more precise inventory tracking across an enterprise- not only inventory levels and merchandise availability, but also alerting planners and buyers on replenishment needs.


Electronically managed item movement can drive replenishment efforts. Tagged merchandise that moves out of the store can result in replenishment systems being immediately notified, and replenishment orders being created based on item movement and customer demand.

Many businesses today operate in an increasingly omni-channel world, i.e. ship-to-store and buy online, pick up in-store (BOPIS) services, and IoT can become further optimized by company personnel now having insight into:

  • Where the inventory resides within the value chain,
  • When specific product items will be delivered to certain locations
  • Perhaps even specific delivery days


This issue is tightly connected to replenishment initiatives. Using web-based smart tags, supply chains can more accurately adjust pricing in real time.

IoT technology is being used to establish patterns and achieve better speed, accuracy, and efficiency across the supply chain.

As products and materials enter or leave a distribution centre, detailed information on each transaction is applied to an integrated system to form a comprehensive IoT platform. Every time a product is shipped or received, the IoT systems make data available without the need for human interaction.

All information gathered through an IoT-equipped supply chain is combined by software that provides a range of reporting, or issue alerts and notifications to selected groups of users across the supply chain.

Software, incorporating the IoT options, can:

  • Monitor the status of assets, products, and people in real time throughout the value chain
  • Measure how assets are performing
  • Effect change in what they are currently doing (and what they will do next)
  • Automate business processes to eliminate manual interventions
  • Improve quality and predictability, and lower costs
  • Optimize how people, systems, and assets work together, and coordinate their activities
  • Apply analytics to the entire value chain to identify wider improvement opportunities and best practices

The integrated supply chain

Soon, it will be possible to integrate the delivery vehicle into real-time logistics data across the entire supply chain – from the supply of parts and materials to the manufacturer, through to their warehouses and distributors, on to the retailer and finally to the end customer.

For example, once the customer sends an order on to a manufacturer, a report on the availability of the goods and timing of shipment will be sent back, enabling the manufacturer to optimize its production schedule.


By better understanding the implications of ‘IoT’ in logistics, not only logistics operators and their business customers can benefit from far-reaching payoffs, but also the end consumers, because those benefits promise to extend across the entire logistics supply chain, including warehousing operations, movement of freight, customer delivery, and reverse logistics.

The ‘IoT’ will have a major impact on areas such as customer experience, safety and security, workforce skills and operational efficiency, and new business models.