THE ADAPTIVE DIGITAL FACTORY – Digitizing the Supply Chain with IoT

"The predictive models, sensor (IoT) events, and business rules for optimized supply chain execution are all automated and operationalized through dynamic case management."


Internet of Things (IoT) connectivity of products, logistics, and transportation, especially within the context of digitized processes, generates concrete business benefits through supply chain optimization. These benefits include:

  • Just-In-Time (JIT) Inventory Management: By leveraging digital transformation platform capabilities with IoT connected devices, manufacturers are finding new ways to optimize inventory levels and improve efficiencies and quality. From consumer purchases in retail stores or wholesalers, all the way to parts suppliers, JIT management of inventories is becoming a reality. The digitally extended enterprise can function as an efficient and optimized pipeline of connected parts and supplies.
  • Just-Needed Visibility: IoT connectivity spans manufactured devices and inventories of these devices, as well as the logistics and transportation of these devices: connected transportation vehicles as well as connected transportation. What this means is that supply chain inventory management has complete visibility on the entire chain of parts, from source to production. The very nature of work and automation is being transformed with increased visibility.

  • Just-Desired Innovation: Innovative technologies such as additive 3D printing for “social” manufacturing, is transforming manufacturing and impacting traditional part sourcing and provisioning models. As discussed in depth in the Adaptive Digital Factory eBook, innovations in robotics and automation on the shop floor are also having a transformative impact on manufacturing.
  • Just-Required Collaboration: Supply chain requires collaboration between different parties in the entire ecosystem of manufacturers. From suppliers, to manufacturers, to distributors, to customers, digital technologies such as the cloud, social interactions, and Dynamic Case Management are allowing all these parties in the value stream to collaborate in end-to-end digitized value streams.
  • Just-Predicted Mitigation of Risk: In order to minimize the risk of disruption, data is mined and transformed into information used to take mitigating actions. These mined actions are automated and executed through end-to-end dynamic cases spanning the entire supply chain. Supply chain leaders need algorithms that learn, adapt, and become more accurate at predicting with more information.

Across the extended manufacturing chain

Digitizing the supply chain is both innovative and inevitable. The predictive models, sensor (IoT) events, and business rules for optimized supply chain execution are all automated and operationalized through dynamic case management.

Digitization spans the extended manufacturing digital enterprise, including OEMs, parts suppliers, logistics, and transportation. Most importantly, it optimizes the customer experience.


As Senior Director and Industry Principal for Manufacturing and High Technology solutions at Pega, Carolyn Rostetter helps clients achieve success through digital transformation.

Dr. Setrag Khoshafian is an author, speaker, and leading expert on the Internet of Things, digital process automation, and digital transformation. As Pega’s chief evangelist and VP of BPM technology, he provides valuable insight on business transformation and innovation to our clients.