Internet of Things (IoT): What is it and how is it used in logistics?

Axes Software » Internet of Things (IoT): What is it and how is it used in logistics?

In an increasingly automated world, where artificial intelligence and industrial robots have become an everyday presence in the activities of people and companies, a term that defines the communication paradigm we live in has come to the fore: the Internet of Things (IoT).

What is the Internet of Things (IoT)?

The Internet of Things is a complex system comprising a wide range of internet-connected devices that are in constant communication with each other and with their users.

This system bridges the gap between the physical and virtual worlds. How? More and more devices used in everyday life are being equipped with sensors, carrying IP addresses and using cloud computing resources to store and exchange data between themselves or with their users.

IoT technology is already present in everyday activities, both at an individual level, in our homes, and collectively, in the economy and local government. “Things” such as smart watches, smart houses, autonomous vehicles, wireless interconnected traffic lights, and various manufacturing, commercial and transport activities are coordinated through software applications that ensure the cohesion of IoT elements.

What does IoT involve and how does it work?

An IoT system cannot exist without users, smart devices and the connections that are made between the human and technical components. Through IoT, operators aim to get the results of the commands they give according to the settings they choose. Therefore, the aim of developing and refining these systems is to limit user interaction so that humans, as far as possible, may only initiate processes that will ultimately bring the expected benefits.

This highlights the importance of digitalization in contemporary society. And when we talk about digitalization, we mean the increasingly detailed automation of operations that we want to control without interfering.

To be functional, any IoT system relies on:

Benefits of IoT

The Internet of Things offers important benefits for human activities:

Easy-to-use universal communications networks. The first network we think of is certainly the mobile phone network, which quickly meets our information needs. The smart phones we use every day are IoT devices that enable us to access, anytime and anywhere, unlimited volumes of information from all over the world, allow us to conduct transactions without having to travel to the sites incolved, thus going beyond providing simple verbal or written communication with our peers. Another example might be that of an IoT system tailored to the needs of a transport network, which, with minimal user intervention, collects, shares, processes and uses data so that people or goods reach their destination faster and safer. Interconnecting mobile devices and interfacing them with the necessary applications (TMS, Google Maps, POD, etc.) make transport activities practically efficient: IoT integrates continuously updated information on routes, roads, traffic lights, locations, other road, rail, air or sea parameters, schedules trips, optimizes routes, records and stores the data of completed operations.

Powerful easy-to-integrate sensors and actuators. The demands of modern society, where both personal and economic life are increasingly organized, require large-scale deployment of IoT systems and full use of their capabilities and functionalities. There is no need to demonstrate their usefulness in various economic sectors. The technology (software and hardware) has continued to develop. With minimal effort on our part, our home security system alerts us when we have (un)wanted guests even if we are not in. At work, let’s say in a warehouse, a WMS system collects information about the products we receive via smart devices (mobile terminals), or automatically sends us messages on hardware with sensors, sparing us the trouble of having to find out for ourselves which products and where to get them from to deliver them as quickly as possible, etc. Of course, the examples could go on. The race for technological breakthroughs and innovations is on and the users will be the ones to benefit most.

Processing large amounts of data in the cloud. Cloud technology does not restrict the amount of data to be analyzed.  Volumes have grown and will continue to grow exponentially as companies have already started to use data from IoT systems in their analysis, planning and monitoring processes. Only by doing so can organizations maintain their competitive edge and create innovative products and services that meet the needs of customers who are also using increasingly sophisticated digital devices.

Cheaper, more efficient, greener businesses. The importance of digitalization cannot be neglected when it comes to environmental protection measures either. Today, making activities more efficient by implementing IoT systems reduces consumption of raw materials, WIP, energy, fuel, etc. There is no doubt that IoT technology will also play a key role in the future, as the system of interconnected smart devices will also support the accelerated development of smart grid technologies in the energy sector. IoT will largely coordinate the process of generating and storing much needed electricity and heat from alternative sources (wind, solar, geothermal, biomass, etc.) The technological leap to a renewable economy will lead to lower fossil fuel consumption and carbon emissions. Thus, it will reduce the global warming effects we are currently facing.

The Internet of Things in logistics

One important area where the Internet of Things is used successfully and with tangible financial results is the internal logistics of companies operating in various economic sectors, such as industrial production, warehousing, transport and distribution.


The development and diversification of IoT systems has also been helped by the emergence and development of cloud computing technology as well as the implementation of data protection safeguards.

Cloud computing offers companies that use it greater agility, scalability and flexibility and, although it seems strange at first glance, increased security of their infrastructure and data. Why outsourcing IT infrastructure by moving to the cloud does not mean a move to a less secure space than on-premises solutions? The answer is simple. Technology vendors interested in attracting and retaining customers are investing heavily in security to counter cyberattacks, providing anti-spam protection and updating systems and anti-virus solutions in real time.

The drastic reduction in security risks allows companies to see the strengths of cloud computing technology in a much more favorable light: operational stability and scalability of IoT systems used in logistics. The benefits are highly visible. Dedicated SCM software solutions integrate superior workflow and process optimization algorithms, can be accessed anytime and anywhere by a considerable number of users connected to the internet, and related databases are no longer limited in terms of storage size.

For these reasons, a growing number of companies are now deploying extended IoT systems based on software solutions hosted directly in the cloud. Thus, Supply Chain Management (SCM) applications such as our own solutions, including xTrack MES (Manufacturing Execution System), xTrack WMS (Warehouse Management System), xTrack TMS (Transport Management System), xTrack FIN (for invoicing), xTrack POD (Proof of Delivery), xTrack YMS (Yard Management System) are selected for optimizing activities as they are easily integrated into the cloud and transformed into real “engines” for the development of logistics management IoT systems.

Increased automation of logistics processes

Logistics is unsurprisingly among the first sectors to implement the Internet of Things. Integrating the software component with the hardware in any IoT system contributes significantly to the increased automation of logistics processes, as it makes it possible to collect and process an increasing number of data sets quickly and efficiently, eliminating human errors and optimizing a wide range of activities.

In the age of Logistics 4.0, it is hard to imagine any industry without the Internet of Things. No other technology manages to interconnect and coordinate so many different devices, mobile or not (hand-held equipment, containers, vehicles, forklifts, mobile cranes, conveyors, machinery, sensors positioned at access points, etc.) to ensure tight control of all operations and increase productivity.

One of the goals of IoT and a key aspect of automation is to reduce human intervention during the process and replace user’s decision with AI decision. For example, xTrack WMS robots such as Task Generator, Task Manager and Task Allocator make decisions and instructions on how to carry out logistics activities in warehouses in optimal conditions, which are automatically sent to workers who are no longer required to make extra efforts to perform their work tasks. Checking and receiving of goods, putaway and picking, replenishment, splitting and verification of goods before packing, grouping of deliveries by transport order for loading onto trucks are controlled and directed by the WMS within the IoT system.

Practically, through WMS applications embedded in IoT technology, logistics professionals receive accurate real-time information about orders, stocks, shipments, routes and destinations, vehicle status and maintenance needs.

Traceability and optimization

Traceability is by no means a new concept in logistics, but ensuring it has proven extremely difficult over time. The tedious process of manually recording and organizing all details of goods produced, stored or transported, their route and other related operations has been revolutionized by the introduction of IoT systems.

Data collection is now done in real time, the inherent human errors that used to occur when the same or different clerks recorded, compiled and processed data. Through software algorithms, IoT organizes and processes a large and diverse volume of data in a time and manner that a human operator cannot compete with, and the selection and presentation of the required data in easy-to-understand graphical formats gives the system unbeatable flexibility and efficiency.

What is important for traceability, however, is that, like the human brain, but to an incomparably more efficient and accurate degree, IoT software solutions have the ability to ‘memorize’ all the information resulting from process automation and store it in user-accessible databases. And sorting filters for the information stored in this way can provide managers with the history and details of all the operations carried out that are the subject of their ‘investigation’ in a matter of seconds.

In IoT, traceability is coupled with optimization, the two goals being  achieved simultaneously. Let’s give some examples.

With the xTrack MES application developed by the Axes Software team, users can automatically schedule production, record the completion of each operation and track the degree of execution of technological operations. In addition, interfacing the software solution with other systems (WMS, TMS) enables them to more rigorously control the available stocks of raw materials and WIP as well as those consumed and those resulting from processing + organization of deliveries. Recording, entering or retrieving data on materials and completed manufacturing operations from other applications helps to optimize processes and ensures accurate and detailed traceability.

WMS (Warehouse Management System) applications reduce goods receipt, picking and inventory-related errors, optimize stocks, make efficient use of warehouse space and prioritize warehouse activities appropriately. By implementing xTrack WMS in both online and offline (physical) store warehouses, you achieve greater efficiency and optimize every stage of the warehouse process. And the integration of new technologies such as pick by voice, pick by light can contribute, for example, to a much higher degree of efficiency in picking activities as the digitalization of processes means traceability and optimization.

IoT systems can also be used to manage shipments: from grouping deliveries, loading products to delivering them to end customers, the software components in this case being the TMS system and the POD (Proof of Delivery) solution, with already known results.

In conclusion, IoT systems are indispensable in logistics and environmental protection. The current pandemic context has shown us the crucial importance of efficient and rapid supply chain management at local and international level, and global warming is forcing us to rely more than ever on digitalization to stop wasting resources and pollution and use renewable energy sources.

Unsurprisingly, forecasts point to a significant growth in the logistics sector, and the current need to digitalize the supply chain amplifies the need to develop and diversify the hardware and software components of IoT systems. The Internet of Things, invented to organize material, information and human resources, will certainly undergo spectacular transformations that we cannot even imagine now.


If we’ve convinced you that it’s worth investing in an Axes software solution, or if you’d like more information about our supply chain management solutions, fill in the form below and drop us a line. We will contact you as soon as possible!

8 December 2021

Over 250 successful software deployments

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Antim Mogos
Sales Manager
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