Integrating IoT into logistics enhances real-time visibility into your supply chain assets for optimal inventory management and improved fleet tracking. It can help your business support sustainability efforts and build a more resilient supply chain.
The days of simply “trusting your gut” are over. The most successful businesses have become masters of efficiency, relying on real-time data to achieve measurable improvements in their critical operations and consistently meet customer expectations.
To follow suit, you’ll need to leverage the Internet of Things (IoT). The following is a close look at everything you need to know about IoT in logistics in order to implement dynamic solutions and achieve end-to-end supply chain visibility.
IoT in logistics refers to the use of internet-connected devices and sensors to collect and share data.
Also referred to as edge devices, these tools are located near sources of data like routers, gateways, or data sensors. This placement reduces delays and sends the data much more quickly to central systems. The devices enable you to monitor your business operations and systems while maintaining optimal supply chain security and continuity.
Each device assists with tracking relevant business metrics (such as inventory levels or the location of a shipment) so you can make informed decisions that promote efficiency.
Many people consider IoT devices—drones, security cameras, and smartphones—to also be edge devices, as they gather and process data locally.
Integrating a lot of AI devices into your supply chain can look daunting, but it can unlock many benefits:
One of the most significant advantages of IoT in logistics is its ability to create a truly connected supply chain. Traditionally, businesses have a limited view of any link in the supply chain beyond their own organization. Edge devices facilitate end-to-end visibility into the flow of goods and raw materials. By tracing products and resources across the entire supply chain, you can identify areas for improvement or corrective action while maximizing efficiency.
Today’s customers increasingly support businesses that prioritize sustainability and resource conservation, demanding both accountability and transparency. IoT in logistics can help you meet these expectations by identifying sources of waste and optimizing resource usage throughout the supply chain.
For instance, smart sensors on delivery trucks can monitor fuel consumption and driving habits, helping reduce emissions by promoting more efficient routes and driving behaviors.
Here are some other real-world examples of how businesses are using IoT for sustainability.
Siemens: Siemens has made significant strides in sustainability through its focus on energy-efficient solutions, smart grids, and clean energy technologies. Their "DEGREE" framework sets ambitious sustainability targets, focusing on decarbonization, circularity, and resource efficiency in manufacturing. They also develop IoT-enabled industrial equipment that helps companies reduce energy consumption and minimize waste.
Schneider Electric: As a global leader in energy management and automation, Schneider Electric is recognized for its sustainability initiatives. Their EcoStruxure platform uses IoT, AI, and analytics to optimize energy usage in industrial environments, helping businesses reduce their carbon footprints. They’ve committed to being carbon-neutral by 2025 and have launched various programs to help clients improve their energy efficiency and sustainability.
IBM: IBM has a long-standing commitment to sustainability through its development of green technologies and initiatives like the IBM Green Horizon project. They use AI and IoT technologies to help companies manage energy use, track carbon emissions, and reduce their environmental impact. Their Sustainability Accelerator helps companies integrate these tools into their operations to meet sustainability goals.
Unilever: Although known as a consumer brand, Unilever works extensively with B2B suppliers and has made supply chain sustainability a core focus. Their Sustainable Living Plan prioritizes reducing carbon emissions, improving water efficiency, and using sustainable sourcing across their global supply chain, including in B2B partnerships.
HP: HP has been active in sustainability through its focus on closed-loop recycling and sustainable sourcing. Their HP Amplify Impact program encourages partners to adopt sustainable practices, and they use IoT-based solutions to help manage energy efficiency in manufacturing and logistics.
Patagonia Provisions: Although Patagonia is a well-known consumer brand, they’ve expanded into B2B with Patagonia Provisions, offering sustainable food products to other businesses. They emphasize sourcing accountability, regenerative agriculture, and low-impact production methods.
Real-time tracking capabilities facilitate enhanced compliance and governance, especially in tightly regulated sectors that require a continuous chain of product custody, such as the pharmaceutical and food and beverage industries.
For example, RFID tags on pharmaceuticals enable companies to track medications from production to delivery, facilitating compliance with safety regulations and preventing counterfeit drugs from entering the supply chain.
In the food industry, temperature sensors in transport containers monitor perishable goods, helping companies adhere to health standards and maintain food safety by helping ensure products stay within required temperature ranges.
When potential contamination is detected, IoT tracing tools allow for swift recalls to identify and remove contaminated goods from store shelves quickly. This protects public health and reduces the risk of major reputational harm.
Recent global disruptions have exposed the fragility of many supply chains, pushing companies to rethink their approach to resilience. The integration of IoT in logistics allows for real-time, granular data that can help you proactively identify and address vulnerabilities in your supply chain.
For example, IoT technology helps DHL keep its transportation running smoothly no matter the changing conditions. The company uses IoT-based route optimization to reroute trucks efficiently, minimizing delays and helping ensure goods still reach their destinations. This system also helps reduce fuel consumption, enhances delivery accuracy, and keeps operations resilient.
IoT insights also allow businesses to monitor external conditions, such as weather patterns, transport strikes, or geopolitical risks—making it easy for them to proactively adjust shipping or production schedules before delays occur. By pinpointing these bottlenecks and critical fault points early in the process, businesses can react faster, minimize disruptions, and build a more resilient and agile supply chain.
IoT sets the stage for informed decision-making and holistic supply chain management. With that in mind, below are a few ways to integrate IoT devices into your logistics processes:
IoT-enabled sensors provide real-time visibility into stock levels, helping companies manage inventory more efficiently. This technology can track item locations within a warehouse (with needle-in-a-haystack efficiency), monitor expiration dates for perishable goods, and trigger automatic reorders when stock reaches predefined thresholds.
As an example, Walmart uses IoT to monitor stock levels across its distribution centers, reducing the chances of stockouts and excess inventory. By integrating IoT into inventory systems, businesses can minimize human error, cut down on storage costs, and improve overall inventory accuracy.
Additionally, RFID tags and IoT-enabled bins help companies like Amazon manage high-velocity items by automatically updating stock counts when goods are moved or sold; this enables better demand forecasting and replenishment.
IoT devices play a critical role in fleet management by providing real-time GPS tracking of delivery trucks and assets. For example, FedEx and UPS use IoT to optimize delivery routes, reduce fuel consumption, and improve estimated delivery times. These systems monitor each vehicle’s location and alert managers if a vehicle deviates from its route or faces delays due to traffic or weather.
Furthermore, IoT devices attached to containers, pallets, and equipment enable companies to track not just their fleet but their individual assets. Maersk, for example, uses IoT to track the location and condition of shipping containers, enhancing operational efficiency and reducing downtime while they are in port. By leveraging this information, logistics managers can make more informed decisions about resource allocation.
In industries like pharmaceuticals, food, and chemicals, maintaining specific temperature ranges is critical to product safety. IoT sensors excel at cold chain monitoring, constantly tracking temperatures inside refrigerated trucks, containers, and warehouses. These sensors immediately alert operators if temperatures deviate from the required range, allowing companies to take corrective action before products spoil or become unsafe.
For example, Pfizer uses IoT sensors to monitor temperature-sensitive vaccines during distribution, ensuring they remain viable upon delivery. Similarly, Nestlé employs IoT to track the temperature of frozen goods, reducing food waste and ensuring quality.
This cold chain monitoring also enhances compliance with regulatory standards like the FDA’s Food Safety Modernization Act (FSMA), helping companies avoid fines and legal issues related to product spoilage.
Unplanned equipment failures can bring logistics operations to their knees, resulting in costly downtime. IoT-powered predictive maintenance solutions allow companies to continuously monitor the “health” of their machinery and predict when repairs are needed. By analyzing data from sensors monitoring things like vibration, temperature, and pressure, IoT systems can alert operators to potential equipment failures before they happen.
For instance, DHL uses “smartification” predictive maintenance for its delivery trucks, analyzing engine data to predict failures and reduce vehicle downtime. In warehouses, IoT sensors are used to track the performance of critical machinery, like conveyors and forklifts, ensuring they are serviced well before a breakdown occurs. This proactive approach not only minimizes costly repairs but also extends the lifespan of equipment, leading to significant cost savings.
Adopting IoT in logistics can unlock significant advantages, but there are key challenges that companies need to address to realize its potential fully.
Below are four of the most common hurdles, along with practical solutions to overcome them:
Every IoT device connected to your network creates a potential entry point for cyberattacks, making security one of the top concerns in IoT adoption. Hackers can exploit vulnerabilities in edge devices to steal sensitive information, disrupt operations, or even sabotage supply chains.
For example, in 2016, the Mirai botnet attack exploited unsecured IoT devices to launch massive Distributed Denial of Service (DDoS) attacks, taking down major websites.
To mitigate these risks, businesses need to prioritize end-to-end encryption, implement multi-factor authentication (MFA), and regularly update firmware on IoT devices. Cisco’s Cyber Vision solution is an example of a tool designed to secure industrial IoT networks by detecting vulnerabilities and providing real-time insights into potential threats.
Integrating IoT devices with legacy systems can be complex, especially when older systems lack the compatibility needed to communicate with newer technologies. Many companies have found it difficult to merge existing supply chain management systems with IoT platforms, leading to fragmented data and inefficiencies.
To address this challenge, businesses should seek IoT platforms that offer compatibility with their existing infrastructure. For example, GE Digital’s Predix platform helps industrial companies integrate IoT data with their older systems to improve operational insights without completely overhauling their technology stack. Companies can also use middleware solutions, like IBM’s Watson IoT, which bridges the gap between legacy systems and IoT devices, enabling smooth data flow.
Similarly, Epicor Service Connect is a tool designed to automate workflows and integrate third-party applications (including legacy software) with Epicor ERP. It allows for the seamless exchange of data between systems, effectively serving as a data bridge between different platforms.
IoT implementation involves significant upfront investment in devices, infrastructure, and software. While these costs may seem prohibitive, the long-term benefits often outweigh the initial expenses. For instance, implementing IoT in logistics can lead to optimized routes, predictive maintenance, and more efficient inventory management, which in turn can help cut costs.
Companies like Boers & Co. Fine Metalworking Group and Dolphin Group have offset the high initial costs of IoT by gradually rolling out technologies. Boers & Co. started by integrating Epicor IoT for better control over production planning and inventory management, which led to reductions in errors and administrative costs. Similarly, Dolphin Group used Epicor solutions to enhance visibility and optimize resource utilization, initially focusing on high-impact areas like production efficiency and inventory control. Both companies demonstrated early ROI by tackling critical pain points, which helped justify further investments.
Additionally, many “IoT-as-a-service” solutions now allow businesses to lease equipment and software, spreading the cost over time rather than requiring large upfront capital.
With each IoT device collecting a vast amount of data, the challenge lies in managing, organizing, and extracting actionable insights from it. If left unmanaged, this influx of information can overwhelm existing systems and lead to inefficiencies rather than improvements. For example, smart warehouses may generate data on everything from temperature fluctuations to inventory movement, requiring robust data management solutions to handle this influx.
Companies like Amazon use cloud-based analytics platforms to process the massive amounts of data generated by their IoT-enabled warehouses. Epicor’s Kinetic ERP solution is another powerful tool that helps businesses manage and analyze their IoT data in real-time.
As an example, Stephen Gould, a packaging and logistics service provider, implemented Epicor Kinetic to automate data collection and streamline operations. They were able to reduce manual processes, enhance real-time visibility into operations, and make data-driven decisions that significantly improved their workflows.
IoT helps logistics companies meet sustainability goals by reducing resource consumption and improving efficiency. Utilimarc, a fleet management company, uses IoT sensors to collect data on fuel consumption and vehicle performance. By analyzing this data, they help fleets optimize driver behavior and significantly reduce fuel consumption.
Retailer Target has implemented IoT technology to track energy usage across its warehouses, distribution centers, retail stores, and data centers. These devices identify spikes or drops in usage and make real-time adjustments. By monitoring power consumption and automating energy management during off-peak hours, Target has been able to reduce energy waste and lower operational costs.
IoT provides immediate benefits in tracking and predictive analytics. American Packaging Corporation uses IoT through Epicor Prophet 21 to monitor production lines and track packaging materials throughout their facilities. This system provides real-time visibility into inventory levels and workflow status, which has minimized production delays and improved operational efficiency.
Another example is Stokes Electric Company, a business that implemented IoT through Epicor Kinetic. They use sensors to track equipment usage and automate maintenance scheduling. This predictive maintenance approach has drastically reduced unplanned downtime and improved equipment reliability, leading to significant cost savings.
There’s a common misconception that IoT devices must be deployed across your entire supply chain all at once. That’s simply not the case. In fact, a phased approach makes the most sense for the majority of businesses.
The Royal Australian Mint implemented IoT gradually through Epicor ERP. They began by introducing IoT sensors into their minting operations to track machine performance and material usage, focusing on high-impact areas like production monitoring. Once they saw significant improvements in production efficiency and material cost savings, they expanded IoT across other operational areas. By phasing the rollout in different stages, they reduced upfront costs and minimized disruption to their operations.
Choose the right IoT devices based on your goals and intended use cases. Implement the sensors in your chosen area and closely monitor the results. Make sure that you have the technology infrastructure necessary to collect, analyze, and disseminate the data gathered by your new devices.
Assess your current operations as the data comes in and identify areas where IoT can add the most value. Prioritize processes and workflows that are solely under your control; as you gain momentum, identify the next highest priority tasks to expand your technology rollout to other business units.
IoT is transforming logistics by delivering real-time data and automating critical operations. Leading companies are already integrating these technologies to streamline workflows, reduce costs, and improve visibility across their supply chains.
At Epicor, our cloud-based ERP solutions are designed to seamlessly integrate with IoT devices for a smooth upgrade and minimal friction in business operations. Whether you're looking to improve asset tracking, enhance inventory management, or optimize routes, Epicor provides the flexibility and insight you need.
Ready to start? Contact us to explore how IoT can drive efficiency and innovation in your logistics operations.
