Application of IoT technique with e-commerce in planning the production and distribution of agri-products towards digitising supply chains

Abstract

Today, the application of the Internet of Things (IoT) with e-commerce is very important in achieving economic efficiency and sustainable growth for agricultural supply chains. However, the problem for supply chains integrating these technologies is facing several obstacles, such as huge investment and non-tech-savvy farmers. This study proposes a method that integrates optimisation and simulation models to assist growers in making decisions on planning the production and distribution of agri-products, aims to digitalise the supply chains. The optimisation model determines the production and distribution plan, while the simulation model evaluates the agricultural product distribution process and determines the time of agricultural product delivery to the market. The proposed model considers different decision-making scenarios: (i) retail and wholesale, (ii) retail, wholesale and IoT, and (iii) retail, wholesale, IoT and e-commerce. A case study using this method is presented based on real data collected from a melon farm in Vietnam. The results from the case study have shown that the proposed approach can help growers choose an optimal solution to get a higher profit, increasing from 876,406,250 up to 1,508,122,000 VND per year, which is significantly more than the current reality.