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Smart sensors and supply chain innovation

Advanced platforms create digital insights

​New technologies are presenting promising opportunities for improvement across the supply chain. Here's how digital insights from smart sensors are supporting supply chain innovation and the smart factory.

Smart sensors and supply chain

A sensor is a device that provides feedback on a physical process or substance in a predictable, consistent, and measurable way. Smart sensors are different from sensors in that smart sensors are advanced platforms with onboard technologies such as microprocessors, storage, diagnostics, and connectivity tools that transform traditional feedback signals into true digital insights. These smart sensors can provide the timely and valuable data underpinnings to power analytical insights that can in turn drive improvements in cost, performance, or customer experience.

Integrating smart sensors and supply chain can decrease operating costs, increase asset efficiency, improve demand planning, and provide critical insight into customer behavior. As centralized platforms and communication networks continue to evolve for the purposes of the Internet of Things (IoT) devices, companies should start to consider how to better sensor-enable their supply chains from end to end.

Deloitte recommends: With the introduction of reliable IoT platforms and advancements in technologies that have both accelerated performance and reduced costs, traditional barriers to smart sensor adoption are eroding. Companies should consider investing in smart sensors to increase value capture through their supply chains after carefully prioritizing their business objectives and defining their use cases.

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The smart sensor ecosystem

The smart factory taps into a broad range of information and analytics, leveraging smart sensors to accelerate the exchange of physical-turned-digital data that can help increase performance, capacity, reliability, and innovation.

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Recent developments and outlooks

The global smart sensor market is growing at a 19 percent annual rate and is expected to reach $60B by 2022. Technological advances have miniaturized the devices, improved performance and energy efficiency, and reduced production costs.


Smart sensor computing capabilities have strengthened substantially, thereby enabling data processing and analysis at or near the source (edge computing) and reducing the amount of data that moves between the device and platform. Additionally, the introduction of micro-electro-mechanical systems technology has allowed for more compact, higher functioning smart sensors by effectively incorporating microelectronic functions in minimal space.


Other innovations—such as micro-sensor implants and biodegradable sensors—have made smart sensors more dynamic and improved their business cases. New wireless technologies are offering connectivity solutions that are more scalable and tailored than traditional wireless networks, which are designed for higher bandwidth, larger volume data devices. Low-power wide-area networks, for example, have reduced cost, power consumption, and range issues for smart sensor usage.


Extracting insights from sensor-created data is getting easier as analytics tools continue to improve. Handling and storing large, complex data sets is becoming more manageable through platforms such as Apache Hadoop. Tools such as complex event processing enable processing and analysis of data on a real-time or a near-real-time basis, driving timely decision making and action. And algorithms continue to advance, expanding the capability to predict and prescribe courses of action.

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Benefits of smart sensors in the supply chain

​Smart sensors increase the automated collection and processing of data and broaden management visibility across the supply chain to help companies reduce operating costs, improve asset efficiency, and generate incremental revenue. Smart sensors in the supply chain can help organizations:

  • Increase operational efficiency through automation
  • Reduce repair cost and maintenance downtime through better monitoring
  • Perform real-time inventory tracking with improved demand planning
  • Inform product development and strengthen product life cycle management
  • Enhance customer service by connecting more closely to the customer

The time for companies to assess their supply chains for piloting smart sensors is now. Connecting devices with smart sensors can provide managers with insights into all phases of the supply chain and therefore drive efficiencies, reduce costs, and introduce new revenue opportunities.

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Interested in learning more about supply chain trends? View our other reports on supply chain innovation
Learn more about how organizations are achieving operational performance breakthroughs as digital supply networks enable supply network visibility—and unprecedented insights in manufacturing.

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