There’s so much hype about the Internet of Things (IoT) that it’s hard to know what’s real and what is highly unlikely to occur. People make jokes about getting phone calls from their refrigerators, but there’s a lot more to IoT than replacing handwritten shopping lists. The Internet of Things could be the best thing ever to happen to supply chains.

Supply chains are increasingly complex, with hundreds or thousands of items and suppliers all over the world. Keeping track of all that movement is difficult, yet in today’s global economy companies prosper or fail based on the efficiency of their supply chains. It’s time to look at better ways to provide visibility and communicate status.

If the Internet of Things can enable your refrigerator to remind you to buy milk on your way home from work, the same technology can just as easily notify your suppliers when critical materials need to be reordered. Using IoT, replenishment material can be requisitioned from central stores or ordered directly from suppliers even more efficiently than using Kanban. Shelves, bins and pallets may soon be smart enough to know when they are running low and resolve the problem before stock outs occur.

Tracking shipments will be easier than ever, since packages will communicate their own whereabouts either at regular intervals or with each move. Shipments will never be lost either, since a package will always be able to communicate its current location.

There will be a higher percentage of perfect orders shipped to customers as products and packaging become more communicative. Error rates would go down dramatically if the product could just say, “Wait a minute! You put the wrong item in the box.” This could happen if the item’s packaging checked a packing list on a wireless device or in an ERP system, for example.

Outsourced manufacturing is often a “black hole” with little or no visibility into order status. This could become a non-issue if the outsourced supplier’s equipment sent frequent status updates to the company’s ERP system.

Nearly every step in the supply chain will benefit when IoT becomes a reality. The fast, easy and inexpensive communication will enable an entirely new level of supply chain efficiency and visibility.