C HAPTER 3
2. Historical Development of the Industrial Revolution and The Emergence of Industry 4.0
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
simple workshop production to factory production was coal and steam power. Textile, steam machine, and iron are the three most important elements of this period. During this period, steam machines started to be used in the textile industry, and raw materials were supplied with steam trains and ships. With the increase in transportation means, the spread of the Industrial Revolution to Europe gained speed. The First Industrial Revolution, based in England, contributed to the increase in national income in these countries by creating new wealth holders in the USA, especially in Europe. With the increase in labor and capital needed, migration from rural to urban areas increased, and urbanization was accelerated (Jensen 1993).
The Second Industrial Revolution covers a period starting from 1870 up until 1914. This period began with the widespread use of cheap steel production methods invented by British Inventor H. Bessemer. In this period, steel, electricity, petroleum, and chemical substances were started to be used instead of steam and coal in manufacturing. Henry Ford, who is known as the father of mass production, left his mark on this period and enabled the widespread use of the manufacturing assembly line system in the automotive sector. During the same period, electronic computers were used for the first time, and Graham Bell expanded the communication network with the invention of the telephone. Railway transportation and trade accelerated by using steel instead of iron in production. The use of electricity in factories and cities began with Edison in 1882. Then, electric machines took part in production (Engelman 2018).
The Third Industrial Revolution covers the period starting from 1970 until a decade ago. During this period, automation in production began with the development of a Programmable Logic Controller (PLC). The production process has been enriched with computer-aided machines and automation-based systems. The automobile industry, mobile phone, internet, aviation and space technologies, computer-aided design, computer-aided machinery (CNC), and robots have started to be used in production. With the development of scientific fields such as telecommunication, nuclear energy, laser, fiber optics, and biogenetics, many innovations have emerged in the field of production (Jacinto 2015). The increase in fossil energy resources and the rapid depletion of world resources have brought about the issue of environmental awareness and the use of renewable energy sources. New technologies related to the use of sustainable energy resources (solar, wind, geothermal, hydraulic energy, etc.) in production have been introduced.
The Fourth Industrial Revolution, known as the “Industry 4.0”, was introduced for the first time at the Hannover Fair in Germany in 2011. Supported by the German Government, this technology has received the support of many countries, especially the USA and Japan (Pfeiffer 2017). Industry 4.0 has become increasingly concrete and has been implemented in many areas, such as production, in particular, supply chain, food, health, etc. With the transition to the Fourth Industrial Revolution, rapid automation in production, robotic systems, and digitization has positively affected the global economy. The biggest goal of the Industry 4.0 is to develop a robotic-based manufacturing system in which various machines within a factory can communicate with each other, detect ambient conditions (heat, humidity, energy, weather, etc.), and by analyzing the data they gather, detects the needs of the system. In this way, it aims to make high quality, more flexible, and low-cost production in a swift manner. Industry 4.0 has created an impact on cost, human resources, management efficiency, and benefit in terms of technology for the ever-evolving and growing SC sector. Industry 4.0 is the fourth industrial revolution that consists of many innovations such as the transfer of the production process entirely to the robots, the development of artificial intelligence and Internet technology, the use of three and four-dimensional printers in production, the sorting out and evaluation of massive data by data analysis, and smart objects communicating with each other. Industry 4.0 brings many benefits, such as higher degrees of integration, facilitation of transmission, higher throughput in a given time delay, and greater process transparency in the entire system for production, inventory management, SC, and a quality economic system. Although Industry 4.0 provides many advantages to production, business models, and technology, it has a negative effect on employment, economic conditions, and data security. Kovacs (2018) has analyzed the dark corners of the development of Industry 4.0 and its effects on the digital economy.
Cyber-Physical Production System (CPPS) provides the integration of the physical environment with the virtual environment (Hermann et al. 2016). CPPS is the complex dimensional structure that works together with the IoT.
Industry 4.0 consists of nine main components, which are given in Figure 3. Industry 4.0 is a comprehensive Industrial Revolution comprising all these components. The main components forming the Fourth Industrial Revolution is illustrated in Figure 4. Industry 4.0 is a collection of systems consisting of many different technological components (Hermann et al. 2016).
2.1 Industry 4.0 Components
Cyber-Physical Production Systems (CPPS): CPPS aims to connect the physical world to the virtual information system with the help of sensors and actuators. Data is communicated between computer terminals, wireless devices, and cloud systems. Thanks to the complex and dynamic CPPS, production process activities (planning, analysis, modeling, design, implementation, and maintenance) can work together. With CPPS, the physical work environment and the virtual information system are synchronized with each other. In this way, the monitoring and control of the production process can be more
38 Logistics 4.0: Digital Transformation of Supply Chain Management
*Mechanical production facilities were working with water and steam power.
*The first mechanical
Industry 1.0
*Serial production
*Use of assembly lines
*Electricity generation
*The invention of the phone
*Electronic computers
Industry 2.0
*Electronic devices
*Computer-based automation
*CNC workbenches
*Robots Automation
* Programming artificial intelligence machines
Industry 3.0
*Cyber-Physical production systems
*Internet of Things
*Smart Factories
*Autonomous Robots
*Cloud computing
*Big Data Analysis
Industry 4.0
Fig. 3: Historical Development of Industrial Revolution (Industry 4.0 2015).
Industry 4.0
Internet of Things
Smart Factory
Cloud computing
Augmented reality Big data
Autonomous robots Printing 3D
Simulation Cyberphysical
Fig. 4: Industry 4.0 Components (Hermann et al. 2016).
transparent and effective. The development of CPPS is evaluated in three major stages. In the first stage, identifying technologies, such as RFID tags, are developed. Thus, a centralized service provider does the storage and analysis of the data. In the second stage, dynamic data can be collected in a limited range with sensors and actuators. In the third stage of development, the data are stored and analyzed with multiple sensors and actuators, and a smarter network system can be received. CPPS fulfills active and dynamic requirements in manufacturing and plays a major role in the overall efficiency of the industry (Lu 2017).
Internet of Things:The term IoT, which emerged in the early 21stcentury, is the most important technological component of the basic philosophy of Industry 4.0. The IoTis also referred to as the communication network in which physical objects are interconnected with each other or with larger systems. The IoT and “smart products” are two terms that are used interchangeably (McFarlane et al. 2003). Smart products can communicate with each other with the help of embedded RFID or sensors and store and analyze the data they receive from the environment. Different researchers have defined smart products over time. Accordingly, McFarlane and others (2003) defined smart products as both physical and information-based products. Tags and RFID readers do the data flow between physical products and information. Venta (2007) refers to smart products as products with the ability to make decisions. Smart products can interpret and analyze the data they have. They interacts with the environment and can present the information in their environment to the user as instant visual information, when necessary. Today, smart products supported by new technologies can inform the user about all the processes from production to final consumption.
PEID (Data device embedded product)
Product with RFID
Data processing
Memory
Power
Communication unit
Unit Sensor
Information Embedded
product
Notification Data / Information
Information demand
PEID reader
PDA
Fixed reader with antenna
Fixed reader with antenna
Fig. 5: Product lifecycle process (Kiritsis 2011).
Hribernik et al. (2011) illustrated the working principle of smart products as the product life-cycle process (Figure 5).
RFID and sensor-embedded devices collect information from their environment wirelessly, with the help of readers and wireless technology. These devices monitor the entire life-cycle process from product assembly to the final use stage.
The product has a built-in driver, display screen, main unit, ISDN modem, processor, and motherboard. Each item can be monitored independently, and the instantaneous information is collected and stored. Product tracking and storage are done using Electronic Code Information Services (EPCIS) or PROMISE Message Interface (PMI). EPCIS and PMI devices record the production time, location, assembly, and disassembly processes of the product. Product lifecycle information is collected with personalized mobile devices and product information readers installed in computers. The collected information is sent to the product life-cycle system from each point (retailer, distributor, recycler, etc.) via the internet.
With this system, product life-cycle information can be supplied individually or collectively at any time (Kiritsis 2011).
Smart Factories: Smart Factories are digital-based factories that emerge at the point where data processing meets with the production process. The manufacturing process envisaged by Industry 4.0 is a fully automated production system that can run fully automatically without human intervention. In these factories, smart robots carry out production. These robots recognize the materials that are moving on the traditional production line with RFID and sensor tags. They also know which processes they need to go through (Thoben et al. 2017). Machines can communicate with each other and can obtain any data via a central computer. In this way, a product can be processed on the same production line and tracked without any error. IoT technology plays an important role in establishing smart factories. The virtualized factory with the Internet of objects is integrated into the system digitized with CPPS. The IoT platform acts as a cloud computing system that collects real-time data and can track the data in the factory at any moment (Lee and Lee 2015).
Big Data: Big data is the general name for voluminous, gigantic, defined or undefined data. Vast amounts of data that are beyond imagination are produced daily in a variety of sectors, such as health, management, social networks (Facebook, MSN, etc.), marketing, finance, and so on. Since this collected data is nothing but piles of data, unless interpreted, it is extremely important to analyze this data quickly and in a comprehensible way. Previously, businesses did not prefer retaining their data in their archives for long periods, and they did not analyze their data sets. However, with new technological developments, data can be analyzed, stored and made available in a safe environment. In this way, companies can see the important competitive data, develop new insights, and customize the services they provide to their customers (Mazzei and Noble 2017). As an example of the work done on big data in the SC sector, the data from the vehicle that is tracked using sensors, the wireless adapter, and the GPS is collected in an internet environment. Thanks to this data, the Supply chain department can monitor drivers and guide them by determining the shortest route. In addition, bus companies can analyze the data they receive from the passengers, design a more efficient transportation plan, and determine the travel frequency and optimum travel time. With big data mining method, they can categorize the estimated number of passengers and make more accurate predictions about the estimated demands (Oussous et al. 2017).
Cloud Computing: Cloud computing is the general name for Internet-based computing services that provide computing resources that can be used at any time and shared among users, for computers and other devices. It is the general name of the system that users can access from anywhere with an internet (Schouten 2014). The most well-known cloud-computing example is the Office 365 service that organizes and stores MS office documents.
40 Logistics 4.0: Digital Transformation of Supply Chain Management
Autonomous Robots: Autonomous robots are robotic systems with a certain intelligence, supported by artificial intelligence technology. Based on artificial intelligence, these autonomous robots, which can detect the environment, that can be implemented very comfortably in production systems and which can make their own decisions with this technology, are the key technology for Industry 4.0. With autonomous robots, production benches that can be positioned at any point within the factory on demand will replace the stationary benches in the factories of future and humanoid robots will emerge, perceive the environment and become able to talk to each other (Yazıcı 2016).
3D Printers: Three-dimensional printers are the production tools of the new era that work with laser or inkjet printer logic, transforming products from digital media into a solid three-dimensional object in a “layer-based” structure defined as
“additive manufacturing” (Berman 2012). For example, a free-moving ball bearing can be produced in a 3D-printer as a single piece with its balls. Additive manufacturing, unlike the subtractive production process, allows production without resorting to any cutting, drilling or grinding process. This means that even producing complex objects becomes much easier (Berman 2012). The technology that most manufacturers use in prototype production, especially since it provides flexibility, low cost and time saving, has now initiated a revolution that will enable final consumers to manufacture in their homes (Çallı and Taşkın 2015).
Simulation and Virtual Reality: Simulation is the imitation of the operation of a real-world system or process in a computer platform. Simulation enables the generation of an artificial history of the system and the observation of that artificial history to draw inferences concerning the operating characteristics of the real system. Simulation or Virtual Reality began in 1962 with a device called Sensora, developed by Morton Heilig, and it has been extended to the daily Google Glass project. Virtual reality is a term used for computer-aided 3D environments where users experience the feeling of being in the designed environment. With Industry 4.0, a virtual copy of the smart production facilities is made in 3D, and the data coming from the sensors is transferred into the simulation environment. In this context, the dark factories of Siemens, HTC’s virtual reality glasses, and Caterpillar augmented reality demo can be given as examples. With virtual reality and simulation, the physical systems of the factories will be monitored through web-based systems, and smart technology applications will proliferate (History of Virtual Reality 2017).