Supply Chain Optimization with IoT

Internet of Things
Supply Chain Optimization with IoT

In 1984, the number of devices connected to the Internet was 1,000.  Gartner claims that 6.4 billion devices are connected to the internet today in 2016.  This means that 5.5 million devices are being connected every day at an accelerating pace.  Gartner and other researchers are predicting that what we are now classifying “The Internet of Things (IoT)” could be as large as 21 billion devices by 2020 (some sources has this estimate even higher) and these devices will be capturing 50 trillion GBs of data.1

Through 2016, the growth of the Internet of Things has resulted largely from increased connectivity of our desktop computers both at home and in the workplace and also as a result of the huge popularity of our mobile devices including tablets and cellphones.  Future growth will be driven by the increased connectivity of devices within our homes; but, more importantly, within our business operations including those of our strategic business partners up and down our supply chain.

Effective supply chain management involves the creation of strategic relationships with both vendors and customers in order to optimize the flow of materials and services along a critical supply chain path.  Within a supply chain, raw materials are converted to finished components, which then become part of larger assemblies, until finally a finished product is completed and delivered to a consumer.  Within each of these transformational steps, there is often a logistical transfer of the outputs of one business as they become the inputs of another.  Critical paths of material flows can be identified along with key performance indicators or KPI’s within the supply chain.  It then becomes vital to be able to monitor the performance of these KPI’s for early warning signals which could identify a supply chain problem.  These KPI’s could also indicate an optimized state of a supply chain as well.

Traditional supply chain communication centers around electronic data interchange (EDI) of information contained within material resource planning (MRP) systems.  MRP systems provide demand forecast information, and the communication of changes related to demand forecasts within the supply chain help facilitate early warning signals to suppliers that there is a demand change coming.

Today, the Internet of Things (IoT), allows for increased intelligence within a supply chain.  KPI analysis could identify that the performance of a given machine or process is vital to the stability of a supply chain.  Excessive or insufficient output of a single process could throw an entire system out of balance.  Communication of the performance of a single process is not readily available within an MRP system; but, with IoT, communication about the stability of a single process and communication about an entire supply chain stream can be realized.

Goal of this Directed Study

The goal of this course is to gain an increased understanding of the definition of the Internet of Things, the advantages of adding intelligent devices within a business supply chain, how to build and deploy devices, and most importantly, how to capture and to use the data such that these devices add intelligence to our business operations.

Required Reading

Enterprise IoT: Strategies and Best Practices for Connected Products and Services by Dirk Slama, Frank Puhlmann, Jim Morrish and Rishi M Bhatnagar.

Other Suggested Reading

Supply Chain Transformation: Building and Executing and Integrated Supply Chain Strategy by J. Paul Dittman.

Industry 4.0: The Industrial Internet of Things by Alasdair Gilchrist.

Industry 4.0 Data Analytics by Rajesh Agnihotri and Samuel New

Course Syllabus

Week 1 & 2: Introduction to the Internet of Things and Embedded Systems

  • What is the Internet of Things (IoT)?
  • Embedded Systems
  • Hardware and Software
  • Networking and Communication
  • Cyber Security
  • Internet of Things Applications Across Industries

Week 3 & 4: Industrial IoT and Industry 4.0

  • Robotics and Autonomous Vehicles
  • Smart Buildings
  • Smart Cities
  • Smart Health Systems
  • Smart Supply Chains
  • Brilliant Manufacturing

Week 5 & 6: Strategies for IoT in Logistics2

  • Real-time Fleet Management
  • Smart Labels
  • Predictive Maintenance
  • Storage Conditions and Control
  • Cargo Integrity Monitoring
  • Optimized Warehouse Workloads
  • Inventory Tracking and Analytics
  • End-to-end Visibility of Delivery Process

Week 7 & 8: Strategies for IoT in the Supply Chain

  • Supply Chain Transformation
  • Hardware and software capabilities
  • Supply chain workflow and KPI analysis
  • Process Control in Production Line
  • Failure Mitigation
  • Predictive Machine Maintenance
  • Workforce Tracking
  • Supply Chain Metrics
  • Supply “Chains” Transformed to Supply “Streams”

Week 9 & 10: Internet of Things: Input/Output and Communication Strategies

  • Low-cost Devices
  • Open-Source Solutions
  • Sensing and Actuation from Devices
  • Communication Technologies
  • Machine-to-Machine (M2M) Communication
  • Cloud-Based Storage
  • Data Analysis and Visualization in the Supply Chain
  • Predictive Analytics

Weeks 11 thru 14: Capstone: Developing a Supply Chain Strategy

As a capstone project, it is desired to identify a supply chain key performance indicator, to then build an IoT device built with a low-cost controller like the Arduino or Raspberry Pi, to demonstrate the operation of this device, and finally to capture the output of this IoT device on a cloud-based platform like ThingSpeak.  ThingSpeak is a service of The MathWorks, Inc. (the developers of MATLAB), and with ThingSpeak the output of IoT devices can be captured in real time, stored, and thus data analytics and visualization becomes possible with tools like MATLAB, Tableau, and other tools.  Programmatic alerts are also possible in order to send remote communication that an IoT device has detected a performance situation that requires further attention.


  1. Palmquist, Diane and Leal, Tyson. (January 2016). IoT in the Supply Chain. Retrieved from on October 21, 2016.
  2. IoT Platform for Smart Supply Chain Solutions. Retrieved from on October 21, 2016.
  3. Smith, Scott D. (March 23, 2016). Why the IoT is the Key to Efficiency in the Supply Chain. Retrieved from on October 14, 2016.
  4. Create Your Own Internet of Things (IoT) Device. Retrieved from on October 14, 2016.