Digital technologies have changed the way supply chain operations are structured. In this article, we develop design principles to show determining factors for an Internet-of-Things approach within Supply Chain Management. From the design principles, the article derives a new model for the Industrial Internet of Things supply chains. The focus is on Small and Medium Enterprises (SMEs). This research design results in a new process of compounding knowledge from existing supply chain models and adapting the cumulative findings to the concept of supply chains in the Industrial Internet of Things. The paper outlines the design principles for developing cognition in the process of integrating SME’s digital supply chains in the Industrial Internet of Things (IIoT) and the Industry 4.0 (I4.0).