Internet of Things and Supply Chains: A Framework for Identifying Opportunities for Improvement and Its Application

Abstract

Management and technology experts believe that the internet of things (IoT) has the potential to radically transform today’s supply chains. Several practice-focused publications describe various ways in which IoT capabilities can affect the supply chains in positive and negative ways. However, no generic framework describing the peculiar effects of IoT on supply chains has yet emerged. This study presents a theoretical framework to articulate the distinct ways in which the IoT can influence the management of supply chains. The use of this framework is illustrated by applying it to identify opportunities for improving two supply chains: the supply chain described in the famed “Beer Distribution Game” and a revised version of that supply chain. This framework, grounded in the foundation of organizational information processing theory, can be of practical use in guiding organizations envision novel ways to improve the performance of their supply chains by deploying the IoT capabilities.