How to Improve Your Supply Chain with IoT-based Inventory Management?

How to Improve Your Supply Chain with IoT-based Inventory Management?

How to Improve Your Supply Chain with the Help of IoT-based Inventory Management?

Inventory is the main asset of a logistics company. The lack of goods and inability to deliver them on time provoke customer dissatisfaction. If the inventory is in excess, an organization spends money on renting additional premises. That’s why companies with complex supply chains need to find a balance between surplus and shortage. You can achieve it with the help of IoT-based inventory management software. In this article, we’ll discuss the potential and advantages of IoT platforms for logistics.  

What is an IoT-based inventory management system? 

An IoT-based inventory management system is software that provides information about the status of goods in a warehouse. IoT sensors are attached to boxes with products. Devices collect the following information: 

  • location of the box in the warehouse;
  • storage conditions (temperature, humidity, light conditions); 
  • quantity of goods (for example, by weight); 
  • time of the boxes’ arrival;
  • inventory movement in the warehouse.

A unique identification number (UID) is assigned to each product. By reading the tag, a warehouse worker receives information about the batch number, expiry date, shipment details, etc. These data are sent to the cloud for processing. The cloud determines the location of the inventory and updates the information in real time as the product changes position.  

As logistics systems become more complex, carriers need to be able to collect a huge amount of information from different sources. They must ensure convenient on-time delivery, and the goods must be in proper condition. At different stages of the supply chain, IoT sensors help to collect information valuable for analytics, from production to last-mile delivery. The Internet of things is one of the technologies that improve logistics software development. 

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Disadvantages of outdated inventory management software 

When a business uses an outdated inventory management platform, the following problems may arise: 

    • The manager does not have accurate data on the stock reserve. If a worker enters the wrong number of items, the manager will end up with a shortage or overstocking. In case of a shortage, the warehouse will not be able to ship the product which is currently out of stock. A surplus means that you have to decide where to store unplanned products. 
  • Manual operations are slower. It is difficult, time-consuming, and tiresome to count and track goods manually. People make mistakes that cost businesses a lot of money. Without special tools, it is difficult to predict what products will be popular next season. It is not easy to foresee demand and adapt to the needs of consumers. 
  • It is inconvenient to make an inventory. To recount the inventory in the warehouse, a manager must stop working operations. It is necessary to freeze the shelves and racks to review the products’ expiry dates and storage conditions. It creates an additional barrier to the timely delivery of goods. 

IoT devices and sensors are changing the working model of a warehouse. Connected sensors become the “eyes and ears” of managers who control logistics processes. Let’s see what it means. 

5 ways how IoT-based inventory management modernizes the supply chain

Excel spreadsheets, manual inventory, and “blind” shipping have been replaced by IoT-based inventory management systems. Together with connected sensors, such software  automates warehouse operations and allows you to perform these actions:

  • To collect valuable information for analytics.

To reasonably manage your inventory, you need to understand what happens to the product at each stage of the supply chain. The more IoT devices warehouse workers use, the more cargo data they collect. For example, a manager analyzes the statistics on shipments in different seasons provided by a connected device. S/he understands what products were ordered more often at a certain time and how much needs to be laid in stock to prepare for the new season.  

  • To make the supply chain transparent. 

IoT sensors attached to a product accompany it on the way from the manufacturer to the customer. The devices transmit important information to a logistician for assessing the condition and location of the goods. Easy traceability allows you to quickly find the goods in the warehouse without scanning each box. The boxes are shipped without delay. Thanks to the IoT, the logistician knows where the cargo is located at a specific time, whether it is damaged or whether it will arrive at its destination on time. 

  • To save money.

Digital monitoring tools help warehouse workers to complete operations faster, without spending much time on manual work. A storekeeper doesn’t need to scan the shelves to find the right box. The specialist receives a task, instantly determines the location of the container with the help of the IoT, and completes the operation. 

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Connected sensors provide real-time information on the product status. There is no need to manually check the goods. Standard procedures such as sorting or stockpiling are automated. The faster the staff copes with the tasks, the more money the warehouse will save. 

  • To resolve conflicts.

If the cargo has disappeared on the route, how to determine who has stolen or lost it? IoT sensors help to locate the lost cargo. The customer sees at what stage of delivery the goods were lost and who is responsible for that. Such evidence will help to resolve the litigation and find the culprit who will compensate for the loss. 

  • To comply with storage conditions.

If there are perishable items in the warehouse, it is important to constantly monitor the temperature, humidity, illumination, and other parameters. It is necessary to monitor the expiry date of the goods and send them to the customer before they end up in spoilage. An IoT-based inventory management system helps to control the quality of products and avoid expirations. 


Connected devices make invisible logistics processes visible. They help to efficiently organize the supply chain and make it productive and transparent. The IoT automates warehouse operations allowing warehouse workers to complete their tasks quicker. 

IoT-based inventory management is a good step for the development of a logistics company. It is easy to introduce it by implementing special software integrated with connected devices. For that purpose, you should contact a logistics software development company. Such an IT partner will set up the warehouse processes so that your organization gets the maximum profit from the upgraded system.