C HAPTER 3
6. Conclusion
Rapid advances in technology lead companies to integrate new technological developments into supply chains to maintain a competitive advantage. IoT has the potential to significantly change the structure of today’s traditional production and transportation processes. Many industries (e.g., retailing, automobile, electronics, etc.) will integrate IoT related technologies into production systems. The structure of supply chains has the potential to be altered with the new technologies and become more visible, agile and risk-free.
Traditional supply chains become more “smarter” with the integration of Industry 4.0 based technologies. IoT, which is one of the technologies introduced by Industry 4.0, has the potential to be used in companies and may easily cope with complexities confronted by traditional supply chains. Although companies may encounter various challenges throughout the integration process of IoT related technologies into their supply chain systems, these technologies provide considerable opportunities to outperform the competitors. Recently, IoT has been applied in numerous industries including agriculture, healthcare, retailing, manufacturing, and logistics.
IoT applications in SCM is a new research area which requires interest from both academics and practitioners. IoT provides an effective and real-time communication system among supply chain partners. A better communication network enables to present innovative products to customers within a short period that contributes to the supply chain responsiveness.
For instance, a proper big data analysis may have a huge impact on strategic decisions such as mass customization (Saniuk and Saniuk 2018). Furthermore, smart devices enable to plan and control of the entire supply chain system, which prevents the supply chain partners from serious problems (e.g., reduction in the amount of inventory due to bullwhip effect). IoT helps supply chains to cope with uncertain changes in demand, to improve product quality, to design new products, to prevent production failures and to deliver products on time. Some other benefits include increased visibility, traceability, transparency, adaptability and flexibility in a supply chain.
Although companies can obtain numerous benefits from IoT technologies, IoT may complicate supply chain management. Obtaining and analyzing processes of the machine-generated big data requires a considerable amount of time and effort. Additionally, a supply chain system may become more vulnerable to the cyber-attacks with potential security holes by the integration of Wi-Fi and RFID technologies, if necessary protection has not been provided.
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The Impact of the Internet of Things on Supply Chain 4.0
A Review and Bibliometric Analysis
Sema Kayapinar Kaya,
1,* Turan Paksoy
2and Jose Arturo Garza-Reyes
31. Introduction
Supply Chain (SC) has a very extensive and dynamic structure that incorporates new business models, new customer expectations, market searches, and technological developments. With the emergence of Industry 4.0, SC had to bring about some changes to keep up with the innovations that Industry 4.0 has brought. Industry 4.0 has relocated the SC and logistics into a digital environment and restructured it. All the processes in SC have been restructured within the framework of Industry 4.0, from raw material procurement to production line and till the last step that the product reaches the final customer. With the Industry 4.0, SC is digitized and renewed with more advanced technological equipment. Today, 28%
of SC companies seem to have advanced digital technology. Digital Supply Chain (DSC) and logistics sectors have a share of 41%, particularly in the automotive industry and 45% in the electronics sector. Within the framework of Industry 4.0, many SC companies have planned to invest 5% of their annual revenues in technological investments until the year 2020 (Zuberer 2016).
The most significant change in SC has occurred with the tracking of objects throughout SC. This new concept, called IoT, shortly Radio Frequency Identification System (RFID), is defined as objects that communicate and share information with each other through sensors and various communication protocols. It is assumed that the camera system was the first step in IoT. This camera system was set up for the first time in 1991 by about 15 researchers at Cambridge University to monitor the coffee machine from their rooms. Then, in 1999, with Kevin Ashton using RFID technology in the Auto-ID Laboratory of Massachusetts Institute of Technology (MIT), the IoT was used for the first time (Ashton 2009). Procter &
Gamble implemented IoT technology in the SC industry for the first time in 1999. Thanks to RFID placed on the products, product tracking was made instantaneously throughout the SC. On this topic, DHL (logistics service provider) and Cisco (Information server provider) prepared a new trend report on the IoT. According to this report, by the year 2020, 50 billion devices will be connected via the internet, which is expected to lead to a significant development in business technology.
According to Cisco’s economic analysis, IoT will generate $ 8 trillion in worldwide revenues over the next decade, with revenue of $ 1.9 trillion for supply chains and SC activities. According to Cisco’s report, the number of devices connected to the IoT is estimated to be 3.47 million in 2015, while the number of devices connected per capita is expected to be 6.58 million in 2020 (Cisco 2015). The number of devices connected per capita is shown in Figure 1.
With the IoT, SC operators, corporate customers, and end consumers can be provided with remote access. Thus, problems arising in operational services, transportation safety, customer satisfaction, and new business models can be easily detected. The IoT in the SC Sector has been examined in four different structural processes as production design, customers, suppliers, and equipment procurement, which are shown in Figure 2.
1 Department of Industrial Engineering, Munzur University, Tunceli, Turkey.
2 Department of Industrial Engineering, Konya Technical University, Konya, Turkey.
3 Centre for Supply Chain Improvement, University of Derby, Derby, United Kingdom.
* Corresponding author: [email protected]
36 Logistics 4.0: Digital Transformation of Supply Chain Management
500 Million 12.5 Billion 25 Billion 50 Billion
Connected Devices
Connected Devices per person
2003 2010 2015 2020
0.08 1.84 3.47 6.58
World
Population 6.3 Billion 6.8 Billion 7.2 Billion 7.6 Billion
Business-to-business (B2B) Business to customer (B2C)
Equipment suppliers
Fig. 1: Number of devices connected to the IoT.
Digital Logistics ManagementDigital Logistics Management
High flexibility • High flexibility • Built in intelligence Built-in intelligence
Intuitive operation • Intuitive operation • Real time capacity Real-time capacity
Human-robot cooperation • Human-robot cooperation • Traceability Traceability
Intelligent control • Intelligent control • Completeness Completeness
Cyber security • Cyber security
Cloud computing • Cloud computing
Big data • Big data
Wireless technology • Wireless technology
Complete cross linkage
• Complete cross-linkage
Cyber physical system
• Cyber-physical system
Self configuration
• Self-configuration
Addive manufacturing
• Addive manufacturing
- - - - - iness-to-business (B2B)
iness to customer (B2C)
Product designer Suppliers
Product designerProduct designer
Suppliers Fig. 2: IoT Logistics Management (Sadıkzade 2016).
Together with the IoT, companies will have a low-cost opportunity in storage, transportation, and all other SC activities. In following the storage, pallets, and vehicles in communication with each other, there can be a smaller, more efficient storage policy. International transport, tracking, and monitoring of products can be faster, more precise, more reliable, and errors can automatically be detected with the product tracking system. The material flows within the SC are monitored instantaneously, making transportation and handling processes easier, minimizing the risks in transportation.
With the IoT, SC will be digitized, which will significantly contribute to the delivery of the products to the customer at the right time, the right place, and the right quality, and the SC process will be facilitated in all its aspects.
This study begins by asking how Industry 4.0 affects SC and what kind of roles IoT and big data play in SC industry.
Section 2 presents the Industrial Revolution and its historical development and the emergence of Industry 4.0. Section 3 offers the work-study and application areas of Supply Chain 4.0. Then, the literature review of IoT and Supply Chain within the scope of Industry 4.0 are included in Section 4. The finding of Bibliometric mapping and clustering analysis are presented in the Section 5. Finally, Section 6 concludes the results and provide some directions of the future studies.
2. Historical Development of the Industrial Revolution and The Emergence of