Modern supply chains are all about customer satisfaction, increased margins and sustainable practices. And with the advent of digitization, traditional supply chain management practices are rapidly becoming obsolete.

More and more companies are adopting advanced technologies such as blockchain, artificial intelligence, and the internet of things (IoT) to transform their supply chains and keep pace with market requirements. As of 2022, IoT spending by the logistics market stood at $39.6 billion, and is expected to reach $114.7 billion by 2032.

The IoT can transform global supply chains in multiple ways. Sustainability is among the major goals that the technology is currently helping companies to achieve. Governments, businesses and consumers: all are prioritizing sustainable practices as climate change becomes an inescapable issue.

According to a report by Accenture, 45% of customers have begun making more purchasing decisions based on green concerns. Going forward, sustainable practices will be vital to customer retention, as well as key to complying with international laws on climate action. 

Following are some ways in which the IoT can lead to more sustainable logistics and supply chain management.

Seamless transportation and efficient logistics. While the COVID-19 pandemic left the global supply chain disrupted, it also spurred the adoption of IoT and other advanced technologies. As of 2021, 72% of companies have already implemented at least one IoT project. IoT devices enable end-to-end traceability, helping companies identify factors acting as roadblocks to sustainability, and implement innovative solutions.

Waste reduction. IoT-embedded sensors provide valuable insights into the use of critical materials, from real-time tracking of purchase patterns to monitoring factors affecting product quality, such as heat, humidity, temperature and shock. With access to critical data, companies can remove defective products from the pipeline and prevent fresh ones from getting affected. In the process, waste is reduced substantially. 

Becoming fuel efficient. Transportation is an integral component of supply chain management. Yet it’s the leading source of carbon emissions globally, accounting for 17% of global greenhouse gas emissions. IoT is a smart technology that helps logistics companies and port operators identify the shortest routes for the movement of goods, resulting in substantial fuel savings. At the same time, the rise of autonomous vehicles and devices will further reduce the impact of transportation on the environment.

Supply chains across the world are undergoing radical change in the wake of COVID-induced disruptions. IoT is one of the major innovations aiding the transformation of supply chains globally. When combined with other advanced technologies like blockchain, analytics and artificial intelligence, IoT can accelerate the transformation of supply chains globally, and lead to more sustainable operations.

Dan Weinberger is chief executive officer of Morpheus.Network.