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The Positive Disruption of the Internet of Things on Distribution Systems

There is no question the Internet of Things (IoT) makes processes and systems work better—indeed, it is becoming a disruptive force in the manufacturing world as company leaders recognize the efficiencies, improvements and cost savings it can generate. IoT has now expanded beyond the factory floor to other parts of business operations, including the supply chain and distribution systems.


Warehouse operations are a key link in the supply chain and, in some ways, are the most important. They move, protect and distribute the final product—all critical elements for customer satisfaction.


Forward-thinking companies use IoT to improve the efficiency and productivity of their warehouse operations and supply networks. Below are some of the ways IoT technologies are transforming warehousing and distribution.




A critical requirement for any warehouse is security of the product. Alarm sensors and CCTV both utilize IoT to detect trespassing and theft as well as to protect assets. “You can automatically lock doors using just an app, and receive alerts on unusual movements and then use the data captured to identify areas of concern and improve them,” writes e-commerce expert Victoria Greene on




Worker safety is always a top concern. Sensor technologies monitor operating equipment in real time and identify maintenance issues before they happen, avoiding potentially dangerous mechanical failures. Automation and robotics—two key IoT technologies—take on the larger, more dangerous warehouse tasks, such as moving heavy objects. Automated equipment, such palletizers and depalletizers, improve efficiencies and free workers from higher-risk jobs.


Optimized Operations


IoT can efficiently manage warehouse operations by providing real-time visibility into warehouse inventory and product movement throughout the facility. Data from all aspects of warehouse operations are analyzed to identify areas that can be adjusted to improve safety, security and productivity.


IoT can also eliminate order accuracies and reduce inventory shrinkage. For example, dimensioning systems allow every package shipped to be automatically allocated weights and sizes from an internal database. “Companies can consistently track product and timestamps throughout the process,” wrote QMI Services, a provider of shipping systems, on “Smart designs provide accountability and identify weaknesses that can be addressed in order to streamline warehouse practices.”


Tracking Assets


Real-time knowledge of the location of goods, materials and supplies is essential for efficient operations. For example, 58 to 77 percent of surveyed organizations consider locating objects, containers and personnel to be the most important function of IoT implementation, according to Forrester.


One approach that is increasingly popular is radio frequency identification (RFID) tags. These hold complete information on a product that can be communicated throughout the inventory system, even as it travels. In addition to RFID, Bluetooth low energy (BLE) tags are currently in development. “Depending on the Bluetooth tag and reading device, these tags can be read from 100 to 300 feet away,” stated Tom O’Boyle, director of RFID and barcoding for Barcoding, Inc. “BLE is an area that is going to add to supply chain visibility and even enhance some of the RFID technology.”




The whole purpose of IoT is to generate data—and lots of it—that can be analyzed to enhance every aspect of warehouse performance. The successful adoption of IoT requires a willingness to examine data and make the needed changes to improve operations. “Right now, I would say that within the whole area of predictive analytics, predictive maintenance is probably the one that is most real,” said Scott Wahl, vice president of global software for Dematic, a warehouse automation and WES provider, in an article in Modern Materials Handling.


IoT vendors are also eager to demonstrate the value of IoT in warehousing and distribution. For example, Cisco Systems, a provider of networking equipment, is working with logistics partners to test different IoT technologies in a 25,000 s.f. innovation lab set up as a warehouse. To date, four technologies—energy management, facial recognition, augmented reality and pallet dimensioning—have shown enough promise to advance to pilot programs.


The Internet of Things will become a disruptive force in distribution systems, streamlining operations and making companies more profitable. With so many opportunities to optimize every element of production, the positive outcomes seem endless. Perhaps the greatest economic impact will be the improved customer experience that accurate orders and easy-to-track deliveries will bring, which is key to improved brand loyalty.

"Smart designs provide accountability and identify weaknesses that can be addressed in order to streamline warehouse practices."

QMI Services

    Some opinions expressed in this article may be those of a contributing author and not necessarily Gray.

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