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Application of IoT In Warehouse Management

IoT is rapidly revolutionizing all aspects of global business, particularly in the supply chain. IoT applications can be used to track inventory levels and warehouse locations, as well as monitor environmental conditions such as temperature and humidity. Such IoT solutions for warehouse management are already used by a few global companies, for example, Amazon, DHL and Alibaba. Thus, companies are introducing new and new IoT applications, which make it possible to achieve optimal use of space, make all processes visible and transparent, as well as reduce labour costs. In this article, let’s look at how the Internet of Things is optimizing warehouse management.

IoT based Warehouse Management System

How does an IoT based Warehouse Management System Work?

The IoT is a system of numerous devices connected to the Internet that have sensors, software, and other built-in technologies. It has the ability to transmit data over a network without human involvement or even human-computer interaction. The introduction of the IoT has opened endless possibilities both for ordinary people and companies. Some examples of IoT are smart home devices such as lighting, air conditioning and security systems, remote health monitoring and emergency notification systems in healthcare, etc.

The application of the Internet of Things has become possible due to such factors:

  • The cost of IoT sensors has decreased over the years. From about 40 dollars a piece in 2012 to less than 10 dollars in 2018 and 2 dollars by 2022.
  • Increased life of batteries. Modern sensors last 2 to 5 years, allowing for a better return on investment.
  • Extremely cheap computing and data processing capacity.
  • The development and application of low-power wireless networks, such as LoRa, Sigfox, and NB-IoT, enable the cost-effective transmission of information generated by IoT.
  • Availability of deployment-ready software that converts sensor-generated data into actionable insights.

With the advent of the Internet of Things, industrial operations have changed dramatically, making them more autonomous. Now, thanks to its implementation, operations in warehouses and distribution centres are also changing significantly. Warehouses are the most important links in any supply chain, facilitating the storage of goods until they are shipped.

Integrated sensors, RFIDs, and IoT-based beacons continuously collect a variety of information and send it to the cloud platform. In this way, managers can monitor such things as location and inventory levels. Various sensors measure many other indicators related to warehouse operations, such as humidity, temperature, location and movement. This data is collected by security and building automation systems.

Benefits of IoT

By combining process automation and modern IoT solutions, brands can now run their fulfilment process even more efficiently. So, let’s look at how IoT-enabled warehouse management can be useful for different companies:

  • Increased Productivity. IoT-enabled warehouses are much more productive. This is due to the fact that warehouse operators can track inventory in real-time, and it makes it easier to manage inventory. For example, if a business knows exactly how much inventory is on hand, it can avoid overstocking or running out of stock. It also means that warehouse staff can be deployed more efficiently, as they can be directed to where they are needed most.
  • Reduced Costs. Warehouse operations can benefit greatly from technological advancements and automatization. IoT can help to reduce the need for physical inventory, as stock levels can be managed remotely. This can free up valuable space in the warehouse, which can be used for other purposes.
  • Improved Customer Service. IoT can also help to improve customer service. That’s because the technology can be used to track orders and inventory in real-time, which can help to ensure that orders are fulfilled quickly and accurately. Thanks to IoT, customers have up-to-date information on the product availability, the status of their orders, and shipping times which can improve the overall customer experience.
  • Enhanced Security. The technology can be used to track inventories and keep an eye on what’s going on in the warehouse. This helps to detect crime, as well as to improve the safety of staff.
  • Improved forecasting accuracy. IoT-based systems may collect and process inventory data, transforming it into useful insights that can predict workload, product demand, and so on.
  • Improved Sustainability. IoT reduces the need for paper records and improves the efficiency of operations. Also, by using temperature and humidity sensors, businesses can avoid dangerous conditions that could lead to health risks for warehouse staff.

As you can see, the implementation of IoT would be a great solution for any company. The use of technology saves resources as well as increases the speed and accuracy of operations.

Applications of IoT in Warehouse Management

Managing a warehouse faces many challenges. First of all, there are frequent problems with inventory. It often happens that inventory is on a different shelf than usual, and the manager cannot find it at the time of delivery. Sometimes goods are lost or stolen, and in large companies, losses can amount to hundreds of thousands of dollars. Also, there are problems with equipment. From time to time, forklifts or freight elevators break down, and this causes delays and decreases productivity. All of these issues can be overcome with IoT solutions that automate warehouse operations.

If you’re wondering how the Internet of Things can be useful, there are dozens of projects that are being tested and launched every year. Simply put, IoT is a network of different devices that can control almost every process. For example, with IoT, warehouses can get real-time data on the condition of machines and equipment. This can help reduce downtime by allowing managers to take preventive and corrective action. This also applies to all the other points concerning the availability of goods and the ability to track their location. Controlling environmental elements is another application of IoT devices. This enables the organization to better control product storage conditions, which is particularly crucial for perishable goods.

During the last few years, IoT has evolved into more than simply a promising idea. Companies have started to adopt modern technology, and various devices are now being used. All of this makes it possible to make the management of daily tasks much more efficient. Let’s take a look at the most beneficial IoT technologies to apply IoT:

  • They help to better control goods inside and outside the warehouse. Managers may track items at every stage of delivery and regulate temperature and humidity by incorporating them into the supply chain. One more proactive strategy to mitigate supply chain risks is to install sensors that track driver vitals.
  • RFID IoT Tags. RFID tags provide detailed information about each batch of goods – its size, manufacturer, expiration date, etc. The average RFID reader is faster than a barcode reader and can scan up to 200 tags at a time.
  • Blockchain tracking. Blockchain gives instant visibility into how well their goods are selling. They can track their physical location in real time. With Blockchain, warehouse managers can predict demand.
  • Autonomous robots. Warehouse robots can replace people in performing dull and dangerous tasks. They can lift heavy loads, work in low lighting conditions, and move quickly through the aisles. Thanks to the IoT, these robots can communicate with each other and with people, which makes them even more efficient.
  • Smart Shelves. Smart shelves are systems that use sensors to track stock levels and send alerts when items need to be restocked. The sensors are connected to a central database that can be accessed to track inventory in real-time. Smart shelves can be used in conjunction with RFID tags and barcodes to fully automate the process.

As for practical applications, a few corporations have recently opened a semi-automated warehouse in which robots perform the majority of the tasks. For example, they move packages and scan barcodes. However, some tasks such as sorting packages and moving complexly shaped items are still performed by humans.


Technology is rapidly leading to changes throughout the supply chain. Upgrading legacy systems with IoT devices helps improve overall efficiency through better tracking, traceability, quality management and compliance. According to data from recent IoT market research, the global market will grow at a CAGR of 30% over the next few years. These are significant numbers, and businesses must take this into account if they want to go hand-in-hand with current trends. However, there are some things to consider when implementing IoT. Businesses must consider the investment cost, security and scalability of integrating IoT devices into their existing warehouse system.

After working as digital marketing consultant for 4 years Deepak decided to leave and start his own Business. To know more about Deepak, find him on Facebook, LinkedIn now.


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