As an essential part of supply chain management (SCM), inventory management is that it is related not only to manufacturing, but also to pricing. The objective of managing inventory is to minimize the inventory cost by setting the right inventory replenishment policies with consideration of various factors to maximize the customer service level.

The very first motivation that caused reusearchers to write on this subject was the lack of a study that gathers all the work previously done on the applications of IoT and Industry 4.0 on inventory management. Researchers helpedThis study helps to better understand the core concepts in inventory management and opportunities in the advanced applications of Industry 4.0 in inventory systems and provides solid ground for future works by demonstrating the current needs and shortages in this particular area.

2. Structural Implementation Methods and Requirements for IoT

The study by ^[1][23] presented the principle and implementation methods of an automated warehouse management system (WMS) in a telecommunication company. This system contains a labeling line in the warehouse and uses Microsoft Visual Studio and barcodes to show the data of access, location, receiving, and expiry in order to enhance utility. The study concluded that the performance of the inventory management system is improved in terms of the operational cost and accessibility of items. Furthermore, the system created extra space in the warehouse for the company. Ref. ^[2][24] indicated that it is essential to use cloud and fog systems for data storage and processing in an IoT-based system when designing a smart warehouse monitoring and control system by using different components such as sensors, network gateways, actuators, etc. Ref. ^[3][25] proposed an implementation framework which requires RFID tags, Wi-Fi module (ESP8266-01), Wi-Fi development board (NodeMcu ESP8266-12e), and database (Raspberry Pi 3 as the data receiver and web server—programmed with the Python language). Ref. ^[4][26] mentioned that smartphones can be used in industry to scan and record the data of RFID tags. Doing so would not only save more time, but also enhance inventory management functions. IoT provides real-time visibility and 100% inventory accuracy. This study proposed a framework for smart SCM where inventory is dynamically trackable to managers so that they can connect suppliers and orders in a timely manner via the integrated system. Ref. ^[5][27] used a new automatic code acquisition system which replaces the conventional way that a person has to check the inventory before entering the ERP system manually to barcode all the entries. Ref. ^[6][28] considered intelligent shelving and pallets as the force for driving innovative inventory management in the case of stocking in warehouses. With this system, tracking and tracing stocks in the warehouse would become faster, more precise, and safer. Ref. ^[7][16] presented a model to adopt industry 4.0 in inventory management. An intelligent system is able to measure inventory levels with an RFID shelf. Thus, it is feasible to control the material flow in a smart warehouse via mobile devices. Ref. ^[8][29] discussed the item delivery problems that may be caused by delivery vehicle issues or item accumulation in the warehouse. By using IoT, a smart dispatch system which increases the transparency in the logistics system has been implemented, making visual management of the distribution system possible. In the study by ^[9][30], an IoT-based model for decision making in inventory management, which uses RFID, wireless sensors, and other middleware technologies at an enterprise level was introduced. Moreover, an information platform processes the information to ensure that inventory costs remain at their lowest. The integration of Industry 4.0 technologies requires the various actors and stakeholders of the supply chain to ensure full collaboration and coordination among all stages of the value chain ^[10][31]. By recognizing the impact of integration within the whole supply chain on warehouse management systems (WMS), transporters will be able to communicate with the intelligent warehouse management system regarding the location and arrival time to have it select and prepare a docking slot and arrange the just-in-time and just-in-sequence delivery. RFID sensors will reveal delivery data simultaneously. They also send the track-and-trace data to the entire supply chain. WMS can automatically assign storage space according to the delivery specifications and request the appropriate equipment to move the goods independently to the appropriate location. When the pallets are moved to the particular location, the tags will transmit signals to the WMS to provide real-time visibility of inventory levels, which can prevent extra cost from out-of-stock situations and increase the management’s ability to make decisions on the settings that might be necessary to increase customers’ service level. The study conducted by ^[11][32] demonstrated the possibility of using a warehouse equipped with heterogeneous RFID readers from different manufacturers which is not dependent on a centralized server. Such an implementation could reduce the initial implementation cost and investment. The real-time analysis of RFID efficiency was incorporated with indoor localization and navigation of warehouse mobile robots. With RFID and universal plug and play (UPnP) technologies, ^[12][33] recommended a new approach to manage production and logistics processes by turning a product into a smart object, which allows upgrading the products to intelligent objects and services that result in a high level of functional interaction. Using the concept of the industrial Internet of Things (IIoT), another study mentioned a novel approach to the production of smart products and shaped the production line in order to minimize energy consumption ^[13][34]. Ref. ^[14][35] introduced a communication system in the supply chain for open communication with its electrical professional infrastructure and security to benefit from enhancing real-time properties. The basics of time-sensitive networks (TSN) were explained and compared with the Internet for this communication system. The communication between Industry 4.0 factories which are related or working in parallel or in coordination could be improved. Therefore, these factories can take advantage of the benefits of dynamic inventory aggregation and pooling. A new model in reducing production time, which affects inventory capacity management, has been proposed as well. The paper takes an artistic approach by integrating the fuzzy theory into its model, which results in an optimization in the trade-off between production time and the costs included ^[15][36]. Ref. ^[16][37] proposed the mechanism that enables objects to communicate via the web in the warehouse. The mentioned warehouse (full of various objects) is smart and works with a system that contains RFID sensors and consists of a data collection module and an administrative module. The paper also simulated and evaluated the proposed system in various scenarios in the context of discovery time, response time, and transmission failure. Its effects, as seen in the warehouse, are performance improvement, quick interaction, and high accuracy. Furthermore, the system was designed and created to be semi-automated. Therefore, with the absence of the user’s decision-making, it can work properly. This advantage provides companies more flexibility to shift from their former systems to new technologies and start using the proposed system easily. Ref. ^[17][38] introduced a solution for reverse supply chain management (R-SCM) which is dependent on a heterogeneous IoT network following digital security controls (DSC) objectives. Inventory management utilizes smart containers, while a LoRaWAN (LoRaWAN® is a LPWAN protocol designed to connect battery operated “things’” to the Internet in regional, national, or global networks) context network is liable for checking the industrial facilities by using Bluetooth Low Energy (BLE) and RFID technologies. The four performance tests used to assess this system were data ingest, geographical spread, data size, and network latency. It was found that the testing results are proper for an inventory management setting. However, BLE seemed to be the bottleneck for larger arrangements. Ref. ^[18][39] proposed a warehouse management method using mobile robots, which are highly automated and flexible. When a number of such robots operate in the same environment, the challenge is how to manage them. This can be resolved through a cyber-physical system using IoT, which leads to finding a collision-free path for these mobile vehicles.

3. Impact of IoT on Inventory Management in Various Industries

3.1. Spare Parts Manufacturing

Ref. ^[19][40] proposed a smart inventory management system for two types of spare parts: consumable and contingent spare parts for a semiconductor manufacturing company. The system aims to prepare spare parts for the right machine at the right time with the right quantity through IoT technologies. It would lead to making better decisions and establishing transparency and flexibility between fabs and suppliers. Ref. ^[20][41] used IoT technologies in the aircraft spare parts inventory system to reduce inventory costs and unavailability risks. Improved fleet management and increased customer stratification were achieved. There are four types of IoT applications in the airline industry: in-house sourcing, ad hoc pooling, cooperative pooling, and commercial pooling. The paper reviewed these four types of applications by using the business model of the KLM Engineering and Maintenance Department. There are numerous challenges with managing inventories of maintenance, repair, and operations (MRO) spare parts. Ref. ^[21][42] applied big data analytics, machine learning, and IoT to predict maintenance cycles and spare parts needs. MRO spare part usage in the automotive industry showed the differences in patterns, lead times, and costs, which need to leverage Industry 4.0 technologies to help improve inventory efficiency.

3.2. Agriculture Products

For precision agriculture in the agriculture industry, IoT can be used to track detailed information from product production to transportation. It allows stakeholders to receive real-time information about inventory status. With IoT, cloud technologies can be implemented to support the agriculture supply chain ^[22][43]. The study by ^[23][44] on agriculture logistics suggested RFID-based technology in the agriculture industry. The paper explored the application of RFID in agricultural production and examined the system’s efficiency.

3.3. Food Industry

The paper by ^[24][45] discussed smart inventory management in the food supply chain and used the survey and sequential pattern for prediction with the AHP method. The three factors were presented for measuring the function of the food processing and distribution system on quantity, frequency, and recency (QFR) to indicate the impact of being smart in the food industry. The study concluded that the system’s performance could be improved up to 66%. Another IoT application in the food industry is to use an IoT-driven sustainable food security system in which inventory levels are monitored and tracked through the whole logistics process, starting from the farm and ending with consumers ^[25][46]. This can also help policymakers monitor food processing, storage, and delivery to end consumers while minimizing food losses in the supply chain by controlling temperatures and planning routines. Halal food organizations should re-examine their ordinary inventories and influence new innovations. There are many IoT applications in the Halal Food Store Network (HFSC) ^[26][47]. The possibilities and opportunities need to be further explored for the HFSC. There are five main areas in which the HFSC can benefit: tracking food items, upgrading supply chain efficiencies, easier livestock management, validation of food’s halal status, and observing halal accreditations. Ref. ^[27][48] expressed that for special products such as drugs and food, which need specific storage conditions, IoT-based alert systems are beneficial and can lead to more sustainability. Ref. ^[28][49] proposed a live IoT-based monitoring system for the food supply chain which shares the information with stakeholders. As an immediate result, the quality of prepackaged food increases. Another example of smart inventory systems in the food industry is the IP-enabled soft drink vending machines that benefit from an inventory system accessible over the internet ^[29][50]. It is feasible that by using this technology, one could locate their nearest favorite soft drink in a matter of seconds. This is one of the earliest applications of the internet in inventory systems, which leads to more advanced applications of IoT in warehouses.

3.4. Pharmaceutical Industry

The study on pharmaceutical supply chains illustrated that using Industry 4.0 technologies in communication leads to fewer errors in demand forecasting and the improvement of storage space usage in warehouses ^[30][51]. RFID can provide expiration date information, which is the main reason for drug returns, and accurately forecast the reverse flow of expired and near-expired drugs. Thus, in the reverse flow, which plays a significant role in pharmaceutical and other perishable product supply chains, information integration is able to reduce wastage and improve sustainability.

3.5. People with Disabilities

Ref. ^[31][52] introduced an IoT application for people with disabilities. In t his study, it was mentioned that RFID via IoT-based inventory management in stores can help people with disabilities shop more easily.

3.6. Construction Supply Chain (CSC)

The benefits from RFID tracking implementation in construction supply chains were presented in ^[32][53]. The material handling process and inventory counting, searching, and organization in warehouses became more accurate and reliable. In addition to easier measurable benefits, such as alleviating laborious material handling tasks, shipment reliability was improved and supply lead time was shortened in the supply chain. The concrete stocking-related applications of RFID tracking, e.g., counting, searching, and organizing the inventory, would be most beneficial to the companies with warehouses of construction materials. By using RFID in warehouses, stock recording and balancing would be more accurate. Doing so would result in less out-of-stock materials and less excess stock. Industry 4.0 concepts and technologies have been introduced to the construction industry differently due to the fact that construction supply chains are usually project-driven, and their partnerships are temporary and constantly changing. Ref. ^[33][54] defined “proximity” as a concept of distance that can affect construction supply chains. Because of the specific situations at construction sites, delivery lead time and holding cost are the two major factors influencing the entirety of the construction projects’ performance. Using RFID can help with tracking and localization and can improve proximity dimensions by solving the problem of late and early deliveries. Eventually, it can lead to reduced inventory cost, more efficient on-way inventory, shortened lead time, and fewer damaged goods ^[34][55]. Another example of IoT-enabled material inventory at construction sites is the inventory of the construction materials attached with RFID tags. The RFID tags contain the relevant data of the materials, including the manufacturers, technical specifications, scheduled installation sites and dates, purchase dates, and more. The RFID system plays an essential role in material monitoring and control by using IoT at construction sites. Engineers and managers use portable readers to track material delivery, storage, installation progress, and changes. The data are then transmitted to the dynamic database, which allows real-time information sharing with other project teams ^[35][56]. The study by ^[36][57] suggested that real-time inventory management can facilitate the construction process. The suggested method is to use long-range RFID readers in the storage area which can track the product-specific information stored on the tag attached to the materials. Doing so would allow the RFID system to read and update the inventory database when the materials move into or out of storage. This can also help the workers to trace the right materials by using the tag data. One good example of using IoT in construction supply chain networks is the use of IoT-enabled devices, augmented reality (AR), and fuzzy-VIKOR-analysis-based inventory management for the construction projects in the China Pakistan Economic Corridor (CPEC) ^[37][58].

3.7. Retailing Industry

The quick response system is an application of IoT in the retailing industry. RFID facilitates this system by tracking products. It minimizes the backroom inventory and shelf shrinkage of products while improving store security and ability to analyze sales data ^[38][59]. The method of product shelf and sales floor bidirectional movements has been proposed by incorporating RFID into the model described in ^[39][60]. This model can account for misreading from the RFID readers and avoid the disadvantages of fully automatic inventory control by applying for a simple heuristic extension. An interesting application is the use of RFID tags in fitting rooms. An example is a German department store in Essen which uses RFID tags on clothes. When clothes are brought to the fitting rooms, a smart mirror will show similar items and suggest complementary clothing choices or accessories based on the information saved on the tag. This system is used in combination with smart shelves ^[38][59]. A new model has been introduced to deliver information regarding supply levels from the retailer to the manufacturer using RFID tags which increase the accuracy of the orders based on the retailers’ demand based on machine learning ^[40][61]. A challenging issue mentioned in ^[41][62] is the fact that the inventory data supplied by the point of sale (POS) are sorted out after the sales are closed. It cannot precisely represent the data of the products on the shelves. Using RFID-enabled tags and employing a software agent, an integrated information system is able to overcome the mentioned issue. By being able to telecommunicate the client inventory level to the manufacturer, the installment of an electronic device inside the containers improves the opportunity of just-in-time (JIT) pickups and reduces the chance of late or unnecessary visits to the client site by 50%, as the study ^[42][63] indicated. It can also help the supplier to coordinate shipments and rebalance the retailers’ stocking positions. A new approach has been mentioned to maximize the profit of a specific retailer by promoting items that will be expired soon, which helps in sales, reducing inventory costs, and prevention of the loss of goods ^[43][64].