In recent years, Internet-of-Things technology (IoT) has been the subject of research in a diverse field of applications, given its essential role in transitioning society towards a more interconnected paradigm of conducting manufacturing, logistics, services, and business, what is also known as Industry 4.0. Consistent with this line of research, this project addresses the application of IoT in distribution packaging as a way to better understand supply chain conditions. Specifically, this work presents an operational concept for a system that implements IoT technology in the pallets that are used to move products along supply chains and serve as a vehicle to gain insight into the conditions experienced by products and unit loads. The development of this operational concept leverages a systems engineering framework to discover user needs, and stakeholders, and apply model-based systems engineering to create system models that capture expected system behavior and the outputs necessary to create value for the user. A semi structured interview was conducted with eleven companies in order to discover user needs related to their packaging during distribution processes in their supply chain. A system operational concept was developed through use cases, concept of operations, and formal modeling using Cameo System Modeling Software. A review of sensor and communication technologies is presented, as well as a description of the challenges and future research opportunities for the proposed operational concept in distribution packaging. The application of systems engineering framework, and model-based systems engineering to the distribution packaging domain brings clarity to problem formulation in order to lay-out solid value propositions for the adoption of IoT technologies, and to ensure successful realization of systems that achieve customer satisfaction. This work offers three main contributions. First, it provides an identification and description of the needs that industrial companies have in relation to their product and packaging performance during distribution operations. Secondly, it shows how a systems-based approach, leveraging on model-based systems engineering can be employed to conceptualize systems that use innovative technologies like IoT in the domain of distribution packaging. Third, it provides an overview of open research challenges and practical considerations for the implementation of IoT technology in the field of distribution packaging. / Master of Science / In 2007, The World Bank published a study which states that "eighty percent of US trade is carried on pallets" (Raballand and Aldaz-Carroll, 2007). Furthermore, in the year 2015, a report estimated that there would be 2.6 billion pallets circulating in the United States by the year 2017 (Freedonia Group, 2015). Pallets are ubiquitous and a key component of distribution operations in supply chains, as they transport goods, and are the main interface that connects material handling equipment and packaged products (White and Hamner, 2005). Based on that distinctive characteristic, this study contends that pallet can be used as a window to gain insight into the realities of what is experienced by products and packaging during distribution. This can be done by using sensors imbedded in pallets to capture data of interest about the physical conditions in the supply chains, which opens the potential for more customized and optimized packaging design, supported by more reliable and representative information. This idea is particularly relevant, as established protocols for packaging testing are limited in their capacity to accurately simulate the real-world conditions that occur in the supply chain. This has resulted in suboptimal packaging design (Rouillard, 2008) that decreases the efficiency of logistics operations. This study found that industrial companies are most concerned with avoiding damage that their products can suffer during transportation as a result of temperature, relative humidity, shock, and vibration. Thus, it is necessary to gather data about these distribution parameters for product shipments. Using a model-based system engineering approach, an operational concept is proposed to show what is needed from a system to be able to track these parameters. Furthermore, a review of current available technology for IoT is presented, as well as an examination of the challenges posed to the realization of the proposed operational concept, including factors like cybersecurity, and energy resources constraints. This work offers three main contributions. First, it provides an identification and description of the needs that industrial companies have in relation to their product and packaging performance during distribution operations. Secondly, it shows how a systems-based approach, leveraging on model-based systems engineering can be employed to conceptualize systems that use innovative technologies like IoT in the domain of distribution packaging. Third, it provides an overview of open research challenges and practical considerations for the implementation of IoT technology in the field of distribution packaging.