February 18, 2026 • 10 minute read
Author: Phyllis Jackson, Senior Manager, US Marketing, UPS

• The Internet of Things (IoT) and warehouse management systems (WMSs) provide real-time visibility for wholesalers to streamline operations, save costs and optimize planning.
• Small- and medium-size businesses (SMBs) still struggle with inventory management, with excess stock growing 38%.²
• Stockouts often lead to discrepancies in inventory, which can cost retailers trillions of dollars a year.

Technological advancements in sensors, analytics, artificial intelligence (AI) and cloud-based warehouse management systems (WMSs) have improved warehouse operations through inventory visibility, giving wholesalers the tools and insight they need to optimize operations for greater accuracy and performance.
Precise, real-time responsive systems empower wholesalers to approximate inventory needs so they can better predict and respond to shifting consumer demands and seasonal trends.

The key: Using technology like the Internet of Things (IoT) and analytics for warehouse modernization.

The Internet of Things (IoT) is the convergence of the physical and digital worlds. With IoT physical items can be tracked and monitored online when they are embedded with tracking devices that communicate with computers and digital systems.
In the supply chain, IoT technology is particularly valuable as digital-first sales channels require physical inventory to move increasingly faster and more efficiently through fulfillment centers and final mile delivery.

Take UPS Velocity as a case study in IoT efficiency. This facility features more than 1,000 robots, conveyance and sortation systems, and autonomous drones that have been able to optimize storage by 30% by using goods-to-person and rack-to-person technology. This technology doesn’t replace human workers; instead, it empowers staff on the warehouse floor to move more efficiently. With the help of skilled team members, UPS Velocity can help process more than 350,000 items per day – significantly more than a non-automated warehouse.

“IoT can empower wholesalers to make smarter, data-driven decisions across supply chains, inventory systems and labor management by enabling real-time visibility and automation,” says Charles Cawthorn, Strategic Lead, UPS.

Think about life at home. How many items do you have connected to a smartphone or controlled through a digital device? Warehouses operate similarly but on a much higher and more sophisticated level. They’re equipped with various machinery and digital tools that provide a more accurate look at operations and stock levels. Inventory visibility is the ability to see these data points in real time, Cawthorn explains. technology is particularly valuable as digital-first sales channels require physical inventory to move increasingly faster and more efficiently through fulfillment centers and final mile delivery.

More wholesalers and businesses across industries are investing in this technology and inventory optimization dominated as the top application in warehouse IoT in 2024.¹
“Wholesalers that don’t adopt these strategies could be leaving opportunities on the table,” Cawthorn adds.

Many small- and medium-size businesses (SMBs) say they still struggle with inventory management, with excess stock growing 38% in 2024.² But real-time inventory tracking is the top tool organizations are looking for when implementing WMSs, with 85% of logistics providers citing this as their number one interest.³

One of the most important benefits of utilizing the IoT is the ability for devices on the warehouse floor to integrate directly into the WMS.

WMSs also provide real-time visibility into inventory by connecting with the on-floor machinery through sensors and other digital tools. The data is then presented to the user in a digestible way through AI-based software.

A WMS also helps the pick, pack and ship process by streamlining warehouse layout and optimizing pick paths, which helps workers move shipments out the door much faster and efficiently. This strategy is even more effective for wholesalers with numerous sites, allowing multi-location views to create consistency across the organization.

In addition to the increased use of IoT, investments in visibility tech — which enables wholesalers to monitor performance and see the interactions between systems within the supply chain — are on the rise. By 2030, the market size of IoT in warehouse management is expected to reach $17.93 billion.¹

Essentially, wholesalers can now get a real-time look at the entire operation through a dashboard on a tablet. And by having all equipment and analytics in sync, wholesalers usually realize significant production efficiencies.

With more (and better) data points from IoT and WMS tools, Cawthorn recommends prioritizing the information that measures:

• Efficiency of inventory handling and planning
• Effectiveness of your internal warehouse operations
• Receiving productivity
• Put away, pick and ship processes
• Inventory management and optimization

“With this level of detail and data, wholesalers can identify bottlenecks, and help reduce costs and improve overall performance,” Cawthorn explains.

For example, global truck and trailer parts distributor FORTPRO worked with UPS to optimize warehouse space as e-commerce sales surged. UPS reconfigured FORTPRO’s existing facilities, optimizing space through storage rack positioning, product flow and other methods, and increased efficiencies that allowed the business to double its inventory — without the need for a build-out.

“Thanks to UPS, we’ve been able to keep growing our inventory and our revenues without having to move out of our current facility,” says Marlon Romero, an export manager at FORTPRO.

Visibility technology in inventory management can help prevent stockouts, which can cause significant disruptions for wholesalers.

“Stockouts can cause significant headaches for businesses, leading to sales losses, dissatisfied customers and damaged reputations,” explains Jarret Arnold, Strategic Lead, UPS, in a recent Q&A discussion about managing supply chain disruptions. “Late deliveries, poor demand planning and supply chain disruptions are the most common causes of stockouts, all of which can be helped or alleviated through real-time data.”

Arnold also says that stockouts often start the domino effect, leading to inventory distortion — having the wrong stock in the wrong place — which is estimated to cost retailers trillions of dollars a year.

To help control costs and reduce stock inaccuracy, Cawthorn recommends wholesalers look at more than just historical data. He says specific key performance indicators (KPIs) can uncover insight into the precision and nuances of demand planning. These KPIs include:

• Inventory churn
• Dock-to-stock time
• Stockout rates
• Order cycle time
• Fulfillment speed
• Delivery rate
• Order accuracy
• Lines picked per hour

Additionally, return rates can help assess service quality and operational precision, surfacing possible breakdowns in fulfillment accuracy.

Access to a real-time look at current stock with AI-demand tools that can actively predict future sales trends can keep business partners agile. Technology that works in tandem with human expertise boosts efficiencies and results across the supply chain, Cawthorn explains.

“With a streamlined sensor method, you can, reduce error rates and improve frequency scans,” Cawthorn says.

Increased efficiencies upstream and downstream also strengthen critical connections with manufacturers and retailers.

“This speeds up the process in the supply chain for the wholesaler, which then allows the retailer to purchase orders more accurately and receive orders both more accurately and faster. For the manufacturing side, it helps the wholesalers know to make purchases quicker and more accurately and reduce dead stock. It facilitates a process that’s needed — and makes it faster.”

¹ “Internet Of Things in Warehouse Management Market,” Grand View Research, accessed Oct. 13, 2025.
² “Inventory Management 2024 Benchmark Report,” Netstock, accessed Oct. 13, 2025.
³ “Inventory Visibility: 2025 Trends, Challenges, and How to Conquer Them,” Extensiv, accessed Oct. 13, 2025.

^{Individual results and options will vary. UPS makes no promises of any specific outcome in this document but instead provides only example outcomes based on certain UPS customer experiences.}