How the Internet of Things (IoT) will Transform Inventory Management

There has been a lot of talk about the Internet of Things (IoT) lately, and how it is going to greatly impact our lives in ways that we can’t even imagine. DHL and Cisco are predicting IoT to give supply chain and logistics operations a $1.9 trillion  boost over the next ten years. By 2020, it is expected that 50 billion devices will be connected to the IoT in comparison. That’s a lot compared to 15 billion today. The IoT will completely change our lives, just as the introduction of the internet did. At the time, it was impossible to predict how vital the internet was going to become in our everyday lives. Although the possibilities with the IoT could be endless, we have some idea of how it will impact inventory management in the near future.

What Is the Internet of Things?

The Internet of Things connects all of the objects in our lives allows them to communicate with one another. A “thing” in the IoT could be a table, water bottle, chair, or even people. Everyone and everything can connect through the Internet. As a result, we will have access to info about the objects around us and can communicate with them. The impact of IoT is already here. One notable example is smart TVs and Samsung’s Smart Kitchen.

How the IoT Could Impact Inventory Management

Right now, cloud-based inventory systems are able to track items in real-time. Products usually have either an RFID tag or barcode label so they can be scanned and identified by the system. Currently, this is how systems are able to provide visibility into inventory levels, expiration dates, item location, forecast demand, and more.

With the IoT, the ability to track and communicate with products will greatly increase. For example, RFID tags will hold more info about an object, and communicate that to an inventory system. Built-in RFID tags can send info about temperature, weather, damage to the object, traffic, etc.

Built-in GPS location allows you to know exactly where every item is. Every object will have its own unique identifier. As a result, you will be able to pin-point each and every item or piece of equipment. This will greatly decrease shrink, stock shortages, overstocks. Also, you can better identify which areas are efficient and which are not. For example, are shipments getting stuck in traffic at a certain time of day? Are items selling better at certain locations? Perhaps there are certain processes that are damaging items. Do you know much food spoils on each shipment? Well, IoT can answer all these questions and more.

The ability to view, track, and monitor inventory will improve enormously with the IoT. Inefficiencies that you never noticed will become simple to spot and take action on. Although still in an early stage, the IoT carries enormous potential for both consumer and company.