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A Study on Factors Affecting Cold Supply Chain Performance in India

Authors:
  • JIS UNIVERSITY
  • Brainware University

Abstract

The cold chain is an essential part of the supply chain process for perishable products. Recent studies have shown a decisive lack of efficient operational arrangements for cold chain services in developing economies like India. The key integral factors of cold chain industries have been identified on the basis of an extensive literature review as well as analyzing the influencing factors through the KMO Test for identification of the factors of cold chain performance. The end result will establish a relationship between high driving powers with low dependences and high strategic dependencies with low significance. It will also identify the major inhibitors, their role in the operation, and their effect on a cold chain in India.
Information Logistics
for Organizational
Empowerment and
Effective Supply Chain
Management
Hamed Nozari
Department of Management, Azad University of the Emirates,
Dubai, UAE
A volume in the Advances in
Business Information Systems and
Analytics (ABISA) Book Series
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Names: Nozari, Hamed, 1984- editor.
Title: Information logistics for organizational empowerment and effective
supply chain management / edited by Hamed Nozari.
Description: Hershey, PA : Business Science Reference, [2024] | Includes
bibliographical references and index. | Summary: “This book examines the
dimensions, components, and key indicators of logistics and smart supply
chains. Our goal in this book is to empower supply chains by identifying
the procedures and tools that can help make logistics smarter in today’s
world. We will also show what capabilities the information space adds to
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Identifiers: LCCN 2023029587 (print) | LCCN 2023029588 (ebook) | ISBN
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Subjects: LCSH: Business logistics.
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Leveraging ChatGPT and Artificial Intelligence for Effective Customer Engagement
Rohit Bansal (Department of Management Studies, Vaish College of Engineering, Rohtak,
India) Abdul Hafaz Ngah (Faculty of Business Economics and Social Development Universiti
Malaysia Terenganu, Malaysia) Aziza Chakir (FSJES AC, Hassan II University, Casablanca,
Morocco) and Nishita Pruthi (Maharshi Dayanand Universit, India)
Business Science Reference • © 2024 • 320pp • H/C (ISBN: 9798369308158) • US $265.00
Human-Centered Approaches in Industry 5.0 Human-Machine Interaction, Virtual Reality
Training, and Customer Sentiment Analysis
Ahdi Hassan (Global Institute for Research Education and Scholarship, Amsterdam, The
Netherlands) Pushan Kumar Dutta (Amity University Kolkata, India) Subir Gupta (Swami
Vivekanand University, India) Ebrahim Mattar (College of Engineering, University of
Bahrain, Bahrain) and Satya Singh (Sharda University, Uzbekistan)
Business Science Reference • © 2024 • 340pp • H/C (ISBN: 9798369326473) • US $275.00
Intersecting Environmental Social Governance and AI for Business Sustainability
Cristina Raluca Gh. Popescu (University of Bucharest, Romania & The Bucharest University
of Economic Studies, Romania & The National Institute for Research and Development in
Environmental Protection, Romania & INCDPM, Bucharest, Romania & National Research
and Development Institute for Gas Turbines (COMOTI), Bucharest, Romania) and Poshan
Yu (Soochow University, China & Australian Studies Centre, Shanghai University, China)
Business Science Reference • © 2024 • 310pp • H/C (ISBN: 9798369311516) • US $275.00
Leveraging AI and Emotional Intelligence in Contemporary Business Organizations
Dipanker Sharma (Central University of Himachal Pradesh, India) Bhawana Bhardwaj
(Central University of Himachal Pradesh, India) and Mohinder Chand Dhiman (Central
University of Himachal Pradesh, India)
Business Science Reference • © 2024 • 300pp • H/C (ISBN: 9798369319024) • US $270.00
For an entire list of titles in this series, please visit:
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Titles in this Series
For a list of additional titles in this series, please visit:
http://www.igi-global.com/book-series/advances-business-information-systems-analytics/37155
Table of Contents
Preface ................................................................................................................. xv
Chapter 1
Supply Chain 6.0 and Moving Towards Hyper-Intelligent Processes ....................1
Hamed Nozari, Azad University of the Emirates, Dubai, UAE
Chapter 2
IoE-Based Supply Chain Management ................................................................14
Maryam Rahmaty, Islamic Azad University, Chalous Branch, Iran
Chapter 3
Examining Dimensions, Components, and Key Performance Indicators of
Information Logistics in Industry 4.0 ..................................................................27
Mahmonir Bayanati, Islamic Azad University, Tehran West, Iran
Chapter 4
Supply Chain Information System for Sustainability and Interoperability of
Business Service ..................................................................................................40
Kamalendu Pal, University of London, UK
Chapter 5
Supply Chain Information System for Sustainability and Interoperability of
Business Service ..................................................................................................73
Kamalendu Pal, University of London, UK
Chapter 6
Opportunities and Challenges of Smart Supply Chain in Industry 5.0 ..............108
Aminmasoud Bakhshi Movahed, Iran University of Science and
Technology, Tehran, Iran
Ali Bakhshi Movahed, Iran University of Science and Technology,
Tehran, Iran
Hamed Nozari, Azad University of the Emirates, Dubai, UAE
Chapter 7
Employing AI in the Sustainability of Smart Commerce and Supply Chain ....139
Esmael Najafi, Islamic Azad University of Science and Research,
Tehran, Iran
Iman Atighi, Department of Industrial Engineering, Islamic Azad
University, Kish, Iran
Chapter 8
A Conceptual Framework for Blockchain-Based, Intelligent, and Agile
Supply Chain ......................................................................................................150
Masoud Vaseei, Islamic Azad University, Lahijan, Iran
Chapter 9
Evaluation of Logistics 5.0 vs. Logistics 4.0 .....................................................163
Esra Boz, KTO Karatay University, Turkey
Anderson Rogério Faia Pinto, University of Araraquara, Brazil
Chapter 10
Leveraging Digital Data for Optimizing Supply Chain Performance ................185
Mohamed Salim Amri Sakhri, VPNC Laboratory, Faculty of Law,
Economics, and Management Sciences of Jendouba, Tunisia
Chapter 11
Resist With Traditional or Promoting Green: How Innovation Stimulates
Firms’ Supply Chain Management Performance ...............................................201
Shahid Khalil, Malaysia University of Science and Technology,
Malaysia
Seyed Mohammadreza Ghadiri, Malaysia University of Science and
Technology, Malyasia
Chapter 12
A Study on Factors Affecting Cold Supply Chain Performance in India ..........224
Azfar Imam, Zinka Logistics Solutions Pvt. Ltd., India
Nilanjan Ray, Institute of Leadership Entrepreneurship and
Development, India
Niyasha Patra, Institute of Leadership Entrepreneurship and
Development, India
Compilation of References .............................................................................. 241
About the Contributors ................................................................................... 272
Index .................................................................................................................. 274
Detailed Table of Contents
Preface ................................................................................................................. xv
Chapter 1
Supply Chain 6.0 and Moving Towards Hyper-Intelligent Processes ....................1
Hamed Nozari, Azad University of the Emirates, Dubai, UAE
Today’s world is full of technology. Humans and therefore businesses without the
presence of technology are doomed to fail. In order to analyze people and organizations,
it is no longer possible to rely only on the information that flows through language.
In today’s world, decision-making should be based on behavior and performance
data. So, technologies will consider all aspects of life and the behavior of people,
organizations, and all related processes and will monitor them step by step so that
the results are as accurate as possible. In recent years, the concepts of Industry 4.0,
which included the emergence of transformative technologies, and Industry 5.0,
which emphasized sustainability, resilience, and human-centeredness, have grown.
But the next generation of industry, the 6.0 industrial generation, is also on the way.
It means the mixing of all processes, people, and things in technology and decision-
making based on intelligent mode. Therefore, in this research, a concept called
Supply Chain 6.0 has been described including its dimensions and components.
Chapter 2
IoE-Based Supply Chain Management ................................................................14
Maryam Rahmaty, Islamic Azad University, Chalous Branch, Iran
In today’s world, technology is changing and developing every moment, and the
concept of the internet of everything (IoE) is actually something much broader
and beyond the internet of things. In addition to communication between objects
or devices, it includes communication between (people and machines) and (people
with people) through technological tools. In fact, the internet of things is part of
the internet of everything. IoE-based solutions can significantly help to optimize
supply chain management and logistics processes and have more transparency in
this field. On the other hand, the cooperation of IoE and the supply chain can also
help to reduce the costs of logistics. The role of IoE in supply chain management
is a strategic one because, in addition to optimizing processes, it can also bring
benefits such as increasing service speed, increasing accuracy in services, etc. For
these reasons, in this chapter, the basic features and advantages of smart supply
chains based on IoE are examined and evaluated, and an analytical framework is
also provided for it.
Chapter 3
Examining Dimensions, Components, and Key Performance Indicators of
Information Logistics in Industry 4.0 ..................................................................27
Mahmonir Bayanati, Islamic Azad University, Tehran West, Iran
The emerging technologies that drive the fourth industrial revolution rely on the
knowledge and systems of previous industrial revolutions. The goal of the fourth
industrial revolution is to develop more agile, responsive, and customer-oriented
manufacturing industries. In this era, technologies with their potential to revolutionize
the production of goods and services intend to revolutionize the global economy as
well. The technologies of the fourth industrial revolution, beyond the effects they
probably have on economic inequality, can have significant negative side effects
on various fields. As business becomes more competitive and complicated at the
international level, the need for managers to pay attention to technology-based
strategies in the new era is a competitive advantage for companies. For this reason,
an effort has been made in this chapter to identify and evaluate the most important
dimensions, components, and key performance indicators in the field of information
logistics and intelligent supply chain by emphasizing the literature on the subject.
Chapter 4
Supply Chain Information System for Sustainability and Interoperability of
Business Service ..................................................................................................40
Kamalendu Pal, University of London, UK
With the realization of environmental and social sustainability in developing and
using apparel products and services, stakeholders particularly consumers- are
more concerned regarding these issues in business operations. In order to address
new developments and changing trends, apparel businesses are compelled to
identify and implement innovative and sustainable solutions for regular activities.
This chapter assesses how the textile and apparel supply chains can comply with
the United Nations sustainable development goals. In particular, verifying the
source of raw materials and maintaining visibility of merchandise products and
related services while moving through the value-chain networks is challenging and
maintains interoperable business sustainability. Information systems play a vital role
in maintaining operational sustainability. This chapter presents a blockchain-based
Internet of Things (IoT) infrastructure powered by service-oriented computing
architecture as a solution for information processing for maintaining sustainable
supply chain operations.
Chapter 5
Supply Chain Information System for Sustainability and Interoperability of
Business Service ..................................................................................................73
Kamalendu Pal, University of London, UK
Recent Semantic Web Technology developments indicate possible advancements in
supply chain management. In particular, the innovative business process automation
based on SWT attracted much interest from the logistics, manufacturing, packing,
and transportation industries. This technology combines a set of new mechanisms
with grounded knowledge representation techniques to address the needs of formal
information modelling and reasoning for web-based services. This chapter provides
a high-level summary of SWT to help better understand this technology’s impact on
broader enterprise information architectures. In many cases, it also reuses familiar
concepts with a new twist. For example, “ontologies” for “data dictionaries” and
“semantic model” for “data model.This chapter presents the usefulness of a proposed
architecture by applying theory to integrating data from multiple heterogeneous
sources, which entails dealing with semantic mapping between source schema and
Resource Description Framework (RDF) ontology, which are described declaratively
using a specific query language (i.e., SPARQL) queries. Finally, the semantics of
query rewriting are further discussed, and a query rewriting algorithm is presented.
Chapter 6
Opportunities and Challenges of Smart Supply Chain in Industry 5.0 ..............108
Aminmasoud Bakhshi Movahed, Iran University of Science and
Technology, Tehran, Iran
Ali Bakhshi Movahed, Iran University of Science and Technology,
Tehran, Iran
Hamed Nozari, Azad University of the Emirates, Dubai, UAE
The smart supply chain (SSC) attempts to improve the general concept of the
supply chain. The existential philosophy of Industry 5.0 is to develop the previous
generation of the industry. Smart supply chain in the Industry 5.0 can be introduced
as the Supply Chain 5.0 which includes three essential features. This study aims to
review the smart supply chain. For this objective, smart supply chain opportunities
(SSCO) and smart supply chain challenges (SSCC) are analyzed based on Industry
5.0. This study explains the industrial revolutions from the first one to the fifth one. In
this chapter, SSC and Industry 5.0 are identified and defined briefly. Thus, SSC and
Industry 5.0 are connected meticulously. For precise investigation, the opportunities
and challenges of SSC are explained. As a result, the conceptual framework has been
achieved. Using the Delphi method to reach a consensus of a group of experts to
validate the extracted indicators is necessary for this chapter. Finally, the conceptual
framework demonstrates a smart supply chain based on Industry 5.0.
Chapter 7
Employing AI in the Sustainability of Smart Commerce and Supply Chain ....139
Esmael Najafi, Islamic Azad University of Science and Research,
Tehran, Iran
Iman Atighi, Department of Industrial Engineering, Islamic Azad
University, Kish, Iran
Artificial intelligence and machine learning are overcoming more businesses and
distinctive angles of our lives daily. Of course, the coordination industry isn’t absolved
from this. Manufactured insights and machine learning within the coordination
industry can play a vast and successful part in the field of the supply chain. By
utilizing this innovation, forms can be optimized, botches made by people can be
maintained a strategic distance from, and future openings and challenges can be
anticipated. In this manner, business productivity and success will be given. In this
chapter, subtle elements are mentioned about the benefits of utilizing and executing
manufactured intelligence technology within the supply chain, and by perusing these
things, you may get the significance of how counterfeit intelligence and machine
learning calculations can offer assistance in creating your commerce.
Chapter 8
A Conceptual Framework for Blockchain-Based, Intelligent, and Agile
Supply Chain ......................................................................................................150
Masoud Vaseei, Islamic Azad University, Lahijan, Iran
Traditional supply chain administration regularly depends on centralized frameworks,
manual forms, and data silos. This could lead to wastefulness, lack of transparency,
and expanded risk of extortion and falsification. As businesses proceed to expand
globally and customer requests increments, there is a developing requirement for
more prominent straightforwardness, effectiveness, and security in supply chain
administration. Using blockchain technology, businesses can see the movement of
goods throughout the supply chain in real-time. It enables data sharing among all
parties involved, provides a source of truth, and fosters trust among stakeholders.
Blockchain technology can offer assistance in computerizing and streamlining supply
chain forms, counting acquirement, inventory administration, and procurement. This
may lead to taking a toll on investment funds and expanded operational proficiency.
In this chapter, a conceptual system for intelligent supply chains based on blockchain
is given. It shows the causal connections of the compelling components in these
smart supply chains.
Chapter 9
Evaluation of Logistics 5.0 vs. Logistics 4.0 .....................................................163
Esra Boz, KTO Karatay University, Turkey
Anderson Rogério Faia Pinto, University of Araraquara, Brazil
The logistics industry faces an adaptation process and is impacted by advances in
technology, just like other industries. For this adaptation process to be accomplished
correctly, the state of technology in today’s age must be accurately understood and
applied. Essentially, the concept of Logistics 5.0 refers to the methods in which
logistics is used in Industry 5.0. The notion needs to be taken seriously by both the
government (to offer incentives and opportunities for businesses to compete in this
area) and the private sector (to investigate current developments and ensure their
implementation in order to stay ahead of its competitors). The purpose of this research
is to introduce the concept of Logistics 5.0 and explain how it works, as well as to
inform the general public, executives in businesses, and academics on the subject.
The study compared Logistics 5.0 to Logistics 4.0 and explains the changes it made.
Chapter 10
Leveraging Digital Data for Optimizing Supply Chain Performance ................185
Mohamed Salim Amri Sakhri, VPNC Laboratory, Faculty of Law,
Economics, and Management Sciences of Jendouba, Tunisia
The integration of advanced technologies into the various components of the supply
chain is what makes up a digital supply chain. By harnessing the power of digital,
companies gain valuable insights into the roles and relationships of each participant,
leading to an evolution of the entire network. Today, digital is an integral part of
modern supply networks and industries. In this chapter, the authors dive into the
world of digital supply chains and explore how advanced technologies are shaping the
logistics industry. They examine the evolution of supply chain digitalisation and its
importance to modern businesses. They also look at the role of data analytics and its
impact on improving supply chain performance. Finally, they present the application
of a selected data analysis method to the database of the logistics department of an
international industrial company to better understand its current state.
Chapter 11
Resist With Traditional or Promoting Green: How Innovation Stimulates
Firms’ Supply Chain Management Performance ...............................................201
Shahid Khalil, Malaysia University of Science and Technology,
Malaysia
Seyed Mohammadreza Ghadiri, Malaysia University of Science and
Technology, Malyasia
Environmental issues emerge along with the development of firm performance, and
it is a challenge to the business world. The aim of this study is to investigate the
impact of green supply chain management (GSCM) practices on firm performance.
In addition, this study also examined the role of green innovation in between
GSCM and firm performance. The data is collected from 369 participants across
123 multinational corporations (MNCs) operating in Pakistan through purposive
sampling technique. SmartPLS is employed to analyze the data. The results reveal that
GSCM has positive and significant impact on green innovation and firm performance.
Moreover, green innovation mediates the relationship between GSCM and firm
performance. Researchers, practitioners, and industry leaders, while designing their
environmental policies to experience the comparative benefits for both business and
society, can use this influence of environmentally friendly practices.
Chapter 12
A Study on Factors Affecting Cold Supply Chain Performance in India ..........224
Azfar Imam, Zinka Logistics Solutions Pvt. Ltd., India
Nilanjan Ray, Institute of Leadership Entrepreneurship and
Development, India
Niyasha Patra, Institute of Leadership Entrepreneurship and
Development, India
The cold chain is an essential part of the supply chain process for perishable products.
Recent studies have shown a decisive lack of efficient operational arrangements for
cold chain services in developing economies like India. The key integral factors
of cold chain industries have been identified on the basis of an extensive literature
review as well as analyzing the influencing factors through the KMO Test for
identification of the factors of cold chain performance. The end result will establish
a relationship between high driving powers with low dependences and high strategic
dependencies with low significance. It will also identify the major inhibitors, their
role in the operation, and their effect on a cold chain in India.
Compilation of References .............................................................................. 241
About the Contributors ................................................................................... 272
Index .................................................................................................................. 274
Preface
Logistics means the movement of goods from one point to another, which includes
two processes of transportation and warehousing. Therefore, logistics is one of the
main parts of supply chains and it can be defined as the process of planning and
efficient implementation of transportation and storage of goods, from the point of
production to consumption. The goal of logistics is to meet customer needs at the
right time and in a cost-effective manner. Today, logistics has played a vital role in the
movement of equipment and goods and currently plays a key role in the movement
of commercial goods in the supply chain.
Considering that today’s world is a world of information and a large amount of
data is created in all the processes of the supply chain and the tools of transformative
technologies are involved in these processes, therefore the concept of logistics and
supply chain is also mixed with information and the concept of logistics and chain
Information supply has been formed. There is a constant need for information,
especially in warehouse management, which directly affects the efficiency of the
entire system. The better processes are linked and the workflow optimized, the less
effort and potential sources of error. But by no means does every organizational
unit, regardless of its approach, focus holistically on information flow management.
But when two companies work closely together and exchange information regularly,
the value of each One of the information is not the same for each actor, so the
transmission of unnecessary data should always be avoided. The presence of data and
information based on transformative technologies such as the Internet of Things and
artificial intelligence in supply chain processes can always bring many advantages
and challenges. For this reason, in today’s era, it is necessary to pay attention to this
concept and related technologies affecting the supply chain.
The chapters provide insights into the transformative journey from Industry
4.0 to Industry 5.0 and now towards the imminent Industry 6.0, encapsulating the
integration of technology, human-centeredness, and sustainability.
Chapter 1 sets the stage by emphasizing the critical role of technology in today’s
competitive landscape. It explores the evolution from Industry 4.0 to Industry 5.0 and
introduces the concept of Supply Chains 6.0, aiming to define its dimensions and
xv
Preface
components. The focus is on the amalgamation of processes, people, and technology,
paving the way for intelligent decision-making.
In Chapter 2, the broader concept of the Internet of Everything (IoE) takes
center stage. It explores how IoE, surpassing the Internet of Things, facilitates
communication not only between objects but also between people and machines.
The chapter provides an analytical framework for the advantages and features of
smart supply chains based on IoE, underscoring its strategic role in optimizing
supply chain management and enhancing transparency.
Focusing on the fourth industrial revolution, Chapter 3 elucidates how emerging
technologies drive agility, responsiveness, and customer-oriented manufacturing. It
delves into the potential negative side effects of these technologies and emphasizes
the need for technology-based strategies in information logistics and intelligent
supply chain management.
Chapter 4 examines the essential role of sustainability and green supply chain
management in the textile and apparel industry. It explores how IoT applications
can enhance visibility, but also addresses the challenges, presenting blockchain
technology as a solution to ensure information processing while maintaining data
security.
Chapter 5 introduces Semantic Web Technology (SWT) and its impact on enterprise
information architectures. It explores how SWT combines new mechanisms with
grounded knowledge representation techniques, emphasizing its utility in integrating
data from multiple sources. The chapter concludes with a discussion on query
rewriting and a proposed architecture.
Focusing on Industry 5.0, Chapter 6 explores the concept of the smart supply chain
(SSC). It identifies opportunities and challenges based on Industry 5.0, connecting
the industrial revolutions and providing a conceptual framework for a smart supply
chain. The chapter emphasizes the use of the Delphi method for expert validation.
Chapter 7 delves into the integration of artificial intelligence and machine
learning in supply chain coordination. It highlights the transformative role of these
technologies in optimizing processes, avoiding human errors, and predicting future
opportunities and challenges, ultimately enhancing business efficiency and success.
Focusing on the limitations of traditional supply chain management, Chapter 8
introduces blockchain technology as a solution. It explores how blockchain enables
real-time tracking, data sharing, and trust among stakeholders. The chapter provides a
conceptual framework for intelligent supply chains based on blockchain, emphasizing
its causal connections.
Chapter 9 sheds light on the logistics industry’s adaptation process and the concept
of Logistics 5.0. It emphasizes the importance of understanding and applying current
technological advancements for both the government and the private sector to stay
xvi
Preface
competitive. The research compares Logistics 5.0 with Logistics 4.0, explaining
the changes it brings.
Chapter 10 explores the integration of advanced technologies into supply chains,
forming digital supply chains. It delves into the role of digitalization in modern
supply networks, emphasizing data analytics and its impact on improving supply
chain performance. The chapter also presents a practical application of data analysis
in an international industrial company’s logistics department.
Examining the intersection of green supply chain management (GSCM) practices
and firm performance, Chapter 11 presents data collected from multinational
corporations operating in Pakistan. The study highlights the positive impact of
GSCM on green innovation and firm performance, emphasizing the mediating role
of green innovation.
Focusing on the critical role of the cold chain in the supply chain process,
Chapter 12 addresses the lack of efficient operational arrangements in developing
economies like India. Through extensive literature review and the KMO Test, the
chapter identifies key factors influencing cold chain performance, establishing
relationships between driving forces, dependencies, and inhibitors.
This book has tried to strictly examine the transformational technologies, and
their impact on the supply chain and information logistics space, and to determine
the role of these data collection and analysis tools in the operational efficiency of
supply chains. Understanding causal relationships and the effects of active players
in tires full of information and smart supply chains can always help the effective
implementation of these smart systems in the new era.
Hamed Nozari
Azad University of the Emirates, UAE
xvii
Copyright © 2024, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited.
Chapter 1
1
DOI: 10.4018/979-8-3693-0159-3.ch001
ABSTRACT
Today’s world is full of technology. Humans and therefore businesses without the
presence of technology are doomed to fail. In order to analyze people and organizations,
it is no longer possible to rely only on the information that flows through language.
In today’s world, decision-making should be based on behavior and performance
data. So, technologies will consider all aspects of life and the behavior of people,
organizations, and all related processes and will monitor them step by step so that
the results are as accurate as possible. In recent years, the concepts of Industry
4.0, which included the emergence of transformative technologies, and Industry
5.0, which emphasized sustainability, resilience, and human-centeredness, have
grown. But the next generation of industry, the 6.0 industrial generation, is also on
the way. It means the mixing of all processes, people, and things in technology and
decision-making based on intelligent mode. Therefore, in this research, a concept
called Supply Chain 6.0 has been described including its dimensions and components.
INTRODUCTION
Rapid changes and advances in information technology have made supply chain
management undergo fundamental changes. New technologies and their applications
Supply Chain 6.0 and
Moving Towards Hyper-
Intelligent Processes
Hamed Nozari
https://orcid.org/0000-0002-6500-6708
Azad University of the Emirates, Dubai, UAE
2
Supply Chain 6.0 and Moving Towards Hyper-Intelligent Processes
in various industries and services have given various capabilities to companies.
Establishing various and many communications, the combination of capabilities
and competencies are of this category. In today’s world, endeavors to computerize
and intelligentize forms have a special place, so all businesses are included in this
issue. One of these areas is supply chain management frameworks that form the
most techniques in all types of businesses (Fallah and Nozari, 2021).
Supply chains are the beating heart of businesses today because they include
all operational processes, from supply and communication with suppliers to sales
and distribution. Therefore, the correct understanding and proper planning of the
processes in this chain are very important. Accuracy in calculations and schedules,
waste management, and financial flow in these chains make businesses win against
competitors (Nahr et al., 2021).
Therefore, it can be concluded that any tool that can help in the facilitation
and accuracy of these processes, if it does not disturb the optimization of other
processes, can be used in this chain. The transformative technologies in the serious
era are these tools. As we know, data has always existed in all business processes.
However, due to the lack of suitable tools, the possibility of obtaining a lot of data,
or the possibility of analyzing the obtained data, these two problems have been
solved with transformative technologies. In addition to the possibility of refining
and storing large amounts of data that exist in all processes, it is also possible to
extract semi-structured and unstructured data in the new era. Communication and
interactive systems have multiplied the amount of production data in all supply
chain processes.
For this reason, big data analysis and data science technology have been growing
rapidly in recent years. The Internet of Things connects all devices in the supply
chain to the Internet, and artificial intelligence provides analytical capabilities to the
supply chain. The combination of artificial intelligence and the Internet of Things is
an advanced technology that integrates the capabilities of artificial intelligence and
the Internet of Things. This technology is called artificial intelligence of things and
gives high analytical power to decision-making processes. Blockchain technology
ensures transparency and honesty in the data and improves the financial processes of
the supply chain. Online platforms and social networks enable an interactive space
between people and processes throughout the chain and a large volume of structured
data. They produce structured and unstructured. Most of these technologies together
created supply chain 4.0 in the context of industry 5.0. The alignment of all these
technologies together with an emphasis on creating sustainable and resilient supply
chains that are also human-centered, made Supply Chains 5.0. But the 6.0 generation
of industry is beyond all these things. In addition to covering all items in Industry
5.0 and Industry 4.0, it manages all processes, objects, and people in such a way
as to be agile, stable, and resilient, which, like natural intelligence, minimizes the
3
Supply Chain 6.0 and Moving Towards Hyper-Intelligent Processes
amount of error in Have these chains. In other words, it means the presence of natural
intelligence in stable, resilient, and agile supply chain processes and integrated with
all technological capabilities such as speed, accuracy, transparency, security, etc.
They affect the improvement and optimization of processes.
Considering the ever-increasing growth of intelligence in all businesses, this
research has tried to present a conceptual framework for this system by introducing
the 6.0 supply chain based on the 6.0 industry. For this purpose, all elements of
supply chains are analyzed separately, and the cause-and-effect relationships of the
elements of this super-intelligent system are explained. A correct understanding
of this system can facilitate the implementation of these systems in innovative
organizations.
INDUSTRY 6.0
Industry 6.0 will be the convergence of many researchers’ ideas in the technology age.
Industry 6.0 is beyond the idea of Industry 4.0 and Industry 5.0. In Industry 6.0, all
operations are controlled by the human mind. This idea combines human intelligence,
artificial intelligence, cloud computing energy, and human and robot big data. And
quantum computing, in which satellite and industrial robots (artificial intelligence)
are activated. This industry centers on giving virtualized anti-fragile generation
and anti-fragile administrations centered on customer-centric, customer-centric
ethos, profoundly associated businesses with dynamic supply chains, automated
adaptability, and internal value networks where appropriate, intelligent inside or
exterior the organization of different sorts. There’s a center. This industrial revolution
leverages quantum computing to illuminate the massive and complex calculations
of current artificial intelligence models and machine learning strategies, opening
the entryways to unused programming and artificial intelligence calculations and
making human work more open and common (Chourasia et al., 2022). Figure 1
shows the boundaries of Industry 4.0 to Industry 6.0.
4
Supply Chain 6.0 and Moving Towards Hyper-Intelligent Processes
In Industry 6.0, the past industrial revolutions mature, and natural intelligence
enters the analytical space of technologies. The speed of advanced calculations
increases dramatically, the accuracy of calculations increases, and the number of
errors becomes minimal. In such circumstances, the importance of security and
privacy Private will also increase, and moral security issues will be more attention
than in the past.
Figure 1. The most important features of Industry 4.0, Industry 5.0, and Industry 6.0
5
Supply Chain 6.0 and Moving Towards Hyper-Intelligent Processes
ARTIFICIAL INTELLIGENCE OF EVERYTHING (AIOE)
The Internet of Things, or IoT for short, refers to the billions of physical devices
worldwide connected to the Internet and collect information and share it with the
user and other connected devices. This technology has become an epidemic in recent
years and has spread in all life and business processes. Smart and connected devices
have become a part of the daily life of all people, and this shows how practical this
concept has been (Nozari et al., 2021).
With the help of tools such as sensors, smartphones, tablets, RFIDs, and other
connected devices, the Internet of Things is one of the most important sources of
big data production. Data that may have always existed but it was impossible to
access. Also, with the presence of tools such as social networks and all kinds of smart
communication devices, data is obtained that did not exist in the past. Therefore,
the Internet of Things is a tool for extracting and refining large and useful data. The
Internet of Things has a four-layer architecture. The layers of extraction, refinement,
analysis, and decision-making form the main layers of the Internet of Things (Nozari
et al., 2022, Nozari and Ghahremani-Nahr and Najafi, 2023)).
With the spread of the Internet of Things technology, this technology took on
new dimensions. In the Internet of Things, only the connection of things through
the Internet was thought of, and little by little, people and all the relationships
between things and humans were included in this framework, and the concept of a
new thing was formed as the Internet of Everything. The architecture of the Internet
of Everything is shown in Figure 2. As can be seen, this concept connects people
and processes to the Internet in addition to things.
Figure 2. IoE architecture
Source: Sadhu et al. (2022)
6
Supply Chain 6.0 and Moving Towards Hyper-Intelligent Processes
Including IoE innovation in the process can moreover lead to the establishment
of smart network technology. Smart network technology permits users to integrate
communication systems, control and electrical flow, degree utilization, screen the
well-being of their systems, and computerize their control systems among other
things. Smart grids permit users to create better business decisions and to form
estimates for the end of the.
After the development of IoE, the combination of Internet of Things technology
with other technologies was also formed, and other ultra-advanced technologies were
also created. The combination of artificial intelligence and the Internet of Things
(IoT) has the potential to alter the way industries, businesses, and economies work.
The overlap of these two technologies together creates Artificial Intelligence of
Things or AIoT technology, which is a powerful and analytical technology. Utilizing
artificial intelligence, IoT can create smart innovations that mirror brilliant behavior
and make decisions with negligible or no human intercession. Whereas the Web of
Things is approximately gadgets that interface with each other over the Internet, AI
centers on devices that learn from their data and encounters.
Given that IoT gadgets are used to gather and utilize data, machine learning,
and artificial intelligence permit us to understand and progress the information
collected from physical gadgets. Expert systems are utilized in IoT to include more
esteem to IoT by better understanding data from associated gadgets. As a group of
associated gadgets collect and total crude information, computer program programs
with machine insights capabilities analyze the information. After an exhaustive audit,
the ultimate result contains valuable data (Nozari et al., 2023).
AIoT crunches ceaseless data streams and finds designs that conventional
estimations cannot recognize and find. In addition, machine learning combined
with manufactured insights can foresee operational conditions and recognize
parameters that have to be changed to attain the desired results. As a result, IoT can
reveal which data and processes are repetitive and time-consuming and recognize
fine-tuned assignments to extend productivity. The architecture of this technology
is shown in Figure 3.
7
Supply Chain 6.0 and Moving Towards Hyper-Intelligent Processes
As shown in Figure 3, AIoT adds analytical power to the big data from the Internet
of Things. A more complete and advanced version of artificial intelligence of things
can be called artificial intelligence of everything or AIoE.
AIoE means connecting everything to the intelligent internet. All objects, all
people, and all relationships and processes are connected in this technology and
artificial intelligence refines and analyzes all data with the help of analytical tools
such as machine learning and deep learning and prepares it for decision-making.
This technology creates an integrated and comprehensive data collection and analysis
system throughout the processes of today’s life. Undoubtedly, the power of the
ultra-advanced analyzer can bring agility, stability, and deep resilience. Of course,
it should be noted that the parameters of ethical principles must be observed in this
technology that casts a shadow on all aspects of life. The framework of artificial
intelligence of everything is shown in Figure 4.
Figure 3. AIoT architecture
Source: Huang et al. (2021)
8
Supply Chain 6.0 and Moving Towards Hyper-Intelligent Processes
Figure 4 shows that AIoE integrates all people, processes, and things into an
AIoT-based analytical process. This means a super-intelligent state that casts a
shadow over all aspects, components, and behaviors in daily life and can analyze
and manage all processes with a high volume of big data. Today, AIoE is moving
towards the mainstream with increasing speed.
SUPPLY CHAIN 6.0
The supply chain will be one of the areas affected by the sixth industrial revolution
and digital technologies such as the Internet of Things, advanced robotics, and big
data analytics in the near future. The concept of the super-intelligent factory can
be found in AIoE-based supply chain intelligence. In some leading countries, this
topic and its operational aspects have been well implemented significantly. Placing
sensors in everything, creating networks wherever necessary, automating everything
that is needed, and analyzing everything that leads to improved performance and
customer satisfaction will be among the achievements of this revolution in the supply
chain. Of course, all these things there was a different scale in the 4th Industrial
Figure 4. A framework for artificial intelligence of everything
9
Supply Chain 6.0 and Moving Towards Hyper-Intelligent Processes
Revolution and the 5th Industrial Revolution. But the performance level in Industrial
Revolution 6.0 will be really different. In such a way, privacy issues and security
aspects are really worrying, that is, more worrying than Industry 4.0 and Industry
5.0. Smart supply chains 6.0 have been investigated.
Super Smart Procurement and Supply
In the procurement sector, due to AIoE technology, it is necessary to communicate
with suppliers in a completely intelligent manner. Based on the data of the
production unit, the amount of raw materials and the amount needed are provided
in a specific schedule. The amount of suppliers’ inventory is calculated based on
sales-based inventory data in integrated and intelligent systems, emphasizing artificial
intelligence capabilities. The price inquiry is obtained based on integrated price data
in intelligent systems and the supplier is selected optimally. Order registration is
done automatically. Payment is made based on supply chain financing. On the other
hand, the transportation of goods from the place of supply to the place of delivery
is monitored using intelligent systems based on the Internet of Things, and after
the clearance of goods and the departure of materials from the truck, the document
of entry into the warehouse is registered in a fully intelligent manner. The stock
of the warehouse changes automatically. It is evaluated based on the data obtained
from the Internet of Things and the most optimal placement based on artificial
intelligence is done. On the other hand, all the administrative supplies and necessities
needed by the employees are also felt based on the needs of the employees using
IoE technology and are provided based on the needs. The level of satisfaction from
suppliers is based on intelligent social interaction systems.
Super Smart Production
The production department is one of the most important parts of the supply chain,
which has a multi-way relationship with the supply, sales and distribution, quality
control, maintenance, and financial departments. All the data related to MRP in relation
to the sales and distribution units and also the supply are automatically extracted,
analyzed, and scheduled based on AIoE. Qualitative data are intelligently entered
into the production path. Communication between the warehouse and production
warehouses is formed intelligently and based on MRP data. The communication
between the sales and distribution units is based on the data obtained from the Internet
of Things from distribution trucks and visitors and the amount of requirements of
each of the retailers.
10
Supply Chain 6.0 and Moving Towards Hyper-Intelligent Processes
Super Smart Sales and Distribution
The super-intelligent distribution and sales department is one of the most important
and active departments in Industry 6.0. Ordering and producing products using
IoE-based data from retailers’ inventory in a completely intelligent manner is one
of the most important parts of the supply chain. The intelligentization of this sector
also makes it easy for retailers to provide best-selling products. It also gives the
producers the possibility of optimal supply with proper timing. Super-intelligent
distribution systems give the distributor the task of timely supply using the road,
weather, and product type data. This is especially useful for smart distribution of
perishable products. The timing of product sales and the sales period in retailers
determine the level of satisfaction with products. Analyzing the data obtained from
the final consumer with the help of AIoE informs the understanding of the retailers
about the interest in the products, and as a result, this information is automatically
used for the optimal production of the products.
The conceptual framework presented in this research for super-intelligent supply
chain 6.0 based on AIoE (in Industry 6.0) is shown in Figure 5.
11
Supply Chain 6.0 and Moving Towards Hyper-Intelligent Processes
Supply chain 6.0 is an intelligent supply chain based on AIoE and is agile, stable,
resilient, and highly secure. So that its structure has complete integration between
all implementations, people, and processes. The speed of calculations and the power
of its analysis are very high and the error rate is at its lowest value. The flow of
data is done automatically and the amount of human intervention is the lowest. This
super-intelligent supply chain definitely has many challenges that can be addressed
in a separate research.
CONCLUSION
During the past years, the concept of Industry 4.0 has become very popular. From
an oven concept, it has actually found operational applications and important tools
Figure 5. Supply chain 6.0
12
Supply Chain 6.0 and Moving Towards Hyper-Intelligent Processes
have grown as transformative technologies in this industrial revolution. In this period,
technologies such as Internet of Things technology, artificial intelligence, big data
analysis and analytical tools, and blockchain technology grew as a collection of data
with decentralized management. These technologies transformed the industry and
gave industries, businesses, and people’s daily lives capabilities like a dream in the
past. Data that could never be extracted were identified by these technologies. Semi-
structured and unstructured data were added to the dataset. With these technologies,
the ability to calculate and analyze large volumes of data was created with a very
high growth rate. In this regard, conferences such as Smart City and Smart Business
were also created. Supply chains, as the beating heart of the organization’s processes,
were also involved in these technologies, and without a doubt, capabilities were
added to the supply chain that increased the speed and accuracy of the processes.
After Industry 4.0, the concept of Industry 5.0 and the supply chain 5.0 also grew.
In addition to emphasizing all transformative technologies and their capabilities in
processes, Supply Chain 5.0 also emphasizes all activitiessustainability and future-
oriented effects. These supply chains also consider the resilience of the supply chain
based on these technologies. Therefore, green and sustainable supply, production, and
distribution systems are very important in this generation of industrial revolution.
However, the sixth industrial generation, followed by the 6.0 supply chain
discussed in this research, will be much different from the previous generations.
In supply chain 6.0, artificial intelligence approaches natural intelligence. Big
data calculations are quantum, and we will have the minimum amount of error in
addition to high speed. There is complete integration in all processes from supply
and purchase to distribution and sales and marketing. Intelligent communications
will bring super-intelligent operations, giving high stability and maximum reliability
to the supply chain processes.
This research tried to provide a conceptual framework by examining the
dimensions, components, and key indicators of supply chains 6.0. Also, the concept
of artificial intelligence of everything (AIoE) which is created from the overlap
of IoE and powerful artificial intelligence technologies was used for intelligent
communication. This technology has the ability to extract and analyze data in a
super-intelligent mode and creates a perfect interface between things, people, and
processes. Understanding this conceptual framework and examining the cause and
effect relationships of all activists and actors in this field can create a path for future
research.
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Supply Chain 6.0 and Moving Towards Hyper-Intelligent Processes
REFERENCES
Chourasia, S., Tyagi, A., Pandey, S. M., Walia, R. S., & Murtaza, Q. (2022).
Sustainability of Industry 6.0 in global perspective: Benefits and challenges. MPAN.
Journal of Metrology Society of India, 37(2), 443–452. doi:10.100712647-022-
00541-w
Fallah, M., & Nozari, H. (2021). Neutrosophic mathematical programming for
optimization of multi-objective sustainable biomass supply chain network design.
Computer Modeling in Engineering & Sciences, 129(2), 927–951. doi:10.32604/
cmes.2021.017511
Huang, C. H., Chou, T. C., & Wu, S. H. (2021). Towards convergence of ai and
IoT for smart policing: A case of a mobile edge computing-based context-aware
system. Journal of Global Information Management, 29(6), 1–21. doi:10.4018/
JGIM.20211101.oa2
Nahr, J. G., Nozari, H., & Sadeghi, M. E. (2021). Green supply chain based on
artificial intelligence of things (AIoT). International Journal of Innovation in
Management. Economics and Social Sciences, 1(2), 56–63.
Nozari, H., Fallah, M., Kazemipoor, H., & Najafi, S. E. (2021). Big data analysis
of IoT-based supply chain management considering FMCG industries. Бизнec-
инфopмaтикa, 15(1, 1 (eng)), 78–96. doi:10.17323/2587-814X.2021.1.78.96
Nozari, H., Ghahremani-Nahr, J., & Najafi, E. (2023). The Role of Internet of Things
and Blockchain in the Development of Agile and Sustainable Supply Chains. In
Digital Supply Chain, Disruptive Environments, and the Impact on Retailers (pp.
271-282). IGI Global. doi:10.4018/978-1-6684-7298-9.ch015
Nozari, H., Ghahremani-Nahr, J., & Szmelter-Jarosz, A. (2023). AI and machine
learning for real-world problems. Advances In Computers.
Nozari, H., Szmelter-Jarosz, A., & Ghahremani-Nahr, J. (2022). Analysis of the
challenges of artificial intelligence of things (AIoT) for the smart supply chain
(case study: FMCG industries). Sensors (Basel), 22(8), 2931. doi:10.339022082931
PMID:35458916
Sadhu, P. K., Yanambaka, V. P., & Abdelgawad, A. (2022). Internet of things:
Security and solutions survey. Sensors (Basel), 22(19), 7433. doi:10.339022197433
PMID:36236531
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Copyright © 2024, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited.
Chapter 2
DOI: 10.4018/979-8-3693-0159-3.ch002
ABSTRACT
In today’s world, technology is changing and developing every moment, and the
concept of the internet of everything (IoE) is actually something much broader
and beyond the internet of things. In addition to communication between objects
or devices, it includes communication between (people and machines) and (people
with people) through technological tools. In fact, the internet of things is part of
the internet of everything. IoE-based solutions can significantly help to optimize
supply chain management and logistics processes and have more transparency in
this field. On the other hand, the cooperation of IoE and the supply chain can also
help to reduce the costs of logistics. The role of IoE in supply chain management
is a strategic one because, in addition to optimizing processes, it can also bring
benefits such as increasing service speed, increasing accuracy in services, etc. For
these reasons, in this chapter, the basic features and advantages of smart supply
chains based on IoE are examined and evaluated, and an analytical framework is
also provided for it.
INTRODUCTION
The supply chain is a network of all people, resources, activities, and technologies
involved in creating and selling a product. A supply chain includes everything
from the delivery of raw materials from the supplier to the manufacturer to the
final delivery of the product to the end user. In fact, the supply chain section in any
IoE-Based Supply
Chain Management
Maryam Rahmaty
Islamic Azad University, Chalous Branch, Iran
Copyright © 2024, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited.
15
IoE-Based Supply Chain Management
organization will be related to delivering the final product from the producer to the
consumer as a distribution item. The Internet of Everything (IoE) is one of the most
recent technologies discussed in the world of information technology, and in today’s
world, information is the first word, and knowing this important issue, the Internet
of Everything was formed on the basis of information and made it completely the
objects around our living environment. IoE has also been developed with the same
philosophy, the process of sending data in the Internet of Things is fully automatic
and based on settings and is sent at specific times, and the emergence of this
phenomenon is the result of the development of wireless technologies and micro-
electro systems. It is mechanical. The supply chain is introduced as an integrated
approach to properly manage the flow of materials, goods, information and finance
(Nozari et al., 2021).
A smart supply chain involves the use of a variety of emerging technologies
including big data, IoT, blockchain, and RPA to streamline various operations within
the supply chain. These technologies allow supply chain companies to reduce costs,
shorten product delivery times, reduce negative environmental impacts, and achieve
unprecedented levels of automation. A very important point about the connection
between the Internet of Things and the supply chain that gives rise to the intelligent
supply chain is that such a supply chain is a self-improving and fully flexible system
that can perform well in an unpredictable environment (Mohapatra & Rath, 2022).
A smart supply chain will also include seamless information sharing and, of course,
continuous optimization of workflows based on real-time data. To better understand
what a smart supply chain is, you should know that such a system can process many
things, including sales history, weather conditions, and the types of data it receives
from its sensors, thus providing much better performance in logistics and supply
chain. The Internet of Things only focuses on physical objects and is a small part
of the Internet of Everything. The Internet of Things is a very broad term that
includes many technologies and people apart from the Internet of Things. But the
Internet of Things is actually the interconnection of physical objects that send and
receive data. Therefore, IoE can give more power to smart supply chains (Tavakkoli
Moghaddam et al., 2022).
By connecting items with information technology through embedded smart devices
or through the use of unique identifiers and carrier data that can establish intelligent
communication with the support of network infrastructure and information systems,
the whole production process can be optimized and the entire product life cycle can
be controlled from production to consumption (Nahr et al., 2021). By tagging items
and contents, more information about the status of the workshop, and the location
of the status of the production machinery can be obtained. The useful information
of tags as input data can serve to generate refined programs and improve logistics.
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IoE-Based Supply Chain Management
Self-organization and smart manufacturing solutions can be identified alongside
design items (Vargheese & Dahir, 2014).
The information connected to an object and micro-processing from production
to the end of the life cycle may be inseparable, the production date of an object
and its current status can be continuously monitored and either stored on the label
or placed inside the information system. Information indicating the history of use
of a product, which includes valuable information for product design, marketing,
and service design related to the product, and also makes the final decision to
recycle, reproduce or dispose of the product safely and environmentally friendly.
By making goods intelligent, IoE provides the possibility for customers to have
full information about the goods from raw materials to production through the
Internet and use them to make purchasing decisions. This information can include
ingredient information, production process information, information related to
the manufacturing company, distributor information, product warranty, or other
information required by the customer. IoE has covered this area of e-commerce by
coding each order and embedding the required information in it. The information
embedded in the orders is read and sent to the centralized data collection system
using radio wave identification technology at any point from the production process
to delivery. Therefore, customers are able to track their orders in real time and know
the fate of their orders (Malathy et al., 2023).
With the implementation of IoE technology, companies are able to monitor
all their products online and gather complete information about the processes the
product has undergone. Despite a strong and integrated database, they are not only
good at returning information in business processes and sharing information between
transaction parties but are also able to analyze this business data accurately and in
real-time. In this way, companies can also analyze their competitive markets and
predict their future business trends in order to capture the market share of their
products in the best way. In fact, this can improve the ability of companies to respond
to the market (Wu et al., 2023).
Considering the important features of this concept and its effects in the basic
processes of smart supply chains, the dimensions and key indicators related to these
concepts are examined in the following, and finally a conceptual model to understand
the cause and effect relationships and the effects of IoE technology in the processes
The supply chain is provided.
INTERNET OF EVERYTHING AND IOT
If we want to describe the Internet of Things in one sentence, we must say that the
Internet of Things includes communication between objects in everyday life. The
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IoE-Based Supply Chain Management
technology is also known as machine-to-machine (M2M) communication technology.
All today’s hardware, including smart watches, laptops, computers, as well as various
smart devices such as smart speakers, home assistants, smart thermostats, etc.,
which are connected to the Internet or local network and can exchange information
with each other, are in the category of the Internet of Things (Sharma et al., 2023).
The Internet of Everything (IoE) is one of the most interesting topics that has been
discussed a lot in the last few years, the Internet of Things is one of the innovative
and pervasive technologies that make networked communications more coherent
and valuable than before. Turning information into action creates new capabilities,
more valuable experiences, and unpredictable economic opportunities for businesses,
individuals, and countries. From a technical point of view, the Internet of Everything
(IoE) refers to billions of devices and consumer products that are connected to the
Internet under a smart network and can develop digital configurations (Liu et al.,
2023). The idea behind the Internet of Everything (IoE) is that intelligent machines
can be connected to each other with higher cognitive ability, and as a result, they
can access much more data and develop networking opportunities.
One of the most distinct advantages of IoE is its application during supply chain
management. Internet of things can affect the entire supply chain processes. Many
studies in the field of supply chain and logistics acknowledge that electronic systems
empowered by the use of the Internet lead to the development of greater efficiency
and effectiveness throughout the supply chain, some of the benefits of which are
described below (Kajba et al., 2023). The main purpose of using the Internet of
Things is to eliminate the distance between business processes in the real world
and their representation in information systems. Through IoE, all equipment, goods
and processes are transformed into smart objects by RFID tags or various sensors.
Therefore, by using Internet-based coverage networks, it is possible to monitor online
and make the necessary decisions with the guidance and analysis of this technology
(Marinagi et al., 2023).
Simply put, the Internet of Everything (IoE) is an intelligent set of connections
between people, processing systems, data, and objects that can easily move around
our world. In such a network, billions of devices such as sensors are used to measure
the environment and their data is available through public or private networks (Nozari
et al., 2022). All these devices can be connected to each other through protocols such
as TCP/IP. The difference between IoT and IoE is intelligent communication. In the
Internet of Things (IoT), most physical digital devices are connected to each other,
but in the Internet of Everything (IoE) there is an intelligent network behind the work
that manages all these devices in a cohesive ecosystem (Mohapatra et al., 2022).
The Internet of Things (IoT) is limited to processing devices, so we are dealing
with device-to-device communication. But in the Internet of Everything (IoE),
both people, processors, data and objects are all gathered together in a network,
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IoE-Based Supply Chain Management
and we are not only dealing with mobile phones and tablets or personal computers.
Health test strips, coffee pots, seafaring containers, all become nodes in a smart
network and communicate with each other. One of the concepts of IoE includes
M2M communication, M2P and P2P communication technologies. The four main
elements of the Internet of Things (IoE) are (RM et al., 202):
People: People are end nodes connected to the Internet.
Processes: Processes ensure that the right information is sent to the right person.
Data: Raw data is examined and analyzed and can help in finding better solutions
and answers.
Objects: Devices that are embedded with a series of sensors and generate data.
Therefore, IoE requires machine-to-machine communication in the Internet of
Things in addition to people and processes to describe a more complex system.
The Internet of Things is considered a constructive element for the expansion of
the Internet of Everything. Also, the Internet of Things only focuses on physical
objects and is a small part of the Internet of Everything. IoT is a very broad term
that includes many technologies and people apart from the Internet of Things.
But the Internet of Things is actually the interconnection of physical objects that
send and receive data (Mirza,2015). Figure 1 shows the elements of the Internet of
Everything (Wu et al., 2023).
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IoE-Based Supply Chain Management
IOE-BASED SUPPLY CHAIN
The Internet of Everything (IoE) is a revolutionary technology for all industries; It has
also shown its potential in processes such as supply chain. Management, forecasting
and monitoring applications help managers improve their company’s distribution
operational efficiency and increase transparency in their decisions. Therefore, more
than ever, the benefits of using IoE in the supply chain are evident. Because a wide
range of IoE applications are used in supply chain management. This facilitates the
tracking and monitoring of goods and creates more transparency in the process of
communication and planning. All areas of the complex supply chain process can
be improved with IoE (Jimo et al., 2023).
One of the most important applications of IoE technology in the production sector
is the activation of the automation system in which the identification and tracking
of materials and products becomes possible. As a result, the cost of manpower
mistakes will be significantly reduced. With the intelligentization of goods in the
production sector, in addition to the accurate identification and tracking of raw
Figure 1. Elements of the IoE
20
IoE-Based Supply Chain Management
materials and spare parts during the production process, the amount of waste and
breakdowns can also be accurately measured. This feature allows managers to
identify bottlenecks and weak points in e-commerce. With the implementation of
this technology, companies are able to monitor all their products online and gather
complete information about the processes the goods go through. Despite a strong
and integrated database, they are not only adept at returning information in business
processes and sharing information between transaction parties, but are also able to
analyze this business data accurately and in real time. In this way, companies can
also analyze their competitive markets and predict their future business trends in
order to capture the market share of their products in the best way. In fact, this can
improve the ability of companies to respond to the market (Joglekar et al., 2023).
The conducted studies show the potential of IoE to modify and improve risk
management in the supply chain at different levels. First, the Internet of Things
provides rapid access to large-scale information from an increasing number of
sources, thus ensuring higher risk transparency. In addition, integrated systems
allow for greater automation, which speeds up processes and helps analyze and
evaluate large amounts of data. In addition, IoE not only improves processes, but also
influences risk knowledge, risk strategies, job profiles, and organizational culture,
allowing for improved social customer relationship management performance and
competitive advantage. In addition to the internal perspective, the program revises
sourcing strategies and supplier selection, which represents a potentially significant
source of risk for the supply chain itself. IoE-based supply chain implementation
facilitates a fast, reliable and cost-effective evaluation (Chen & Zhang, 2023).
Supply chain management is a multi-stage process in which many different groups
operate and each of them can somehow benefit from the role of IoE in supply chain
management. Among the most important of these advantages, the following can be
mentioned (Howlett et al., 2023):
Raw material suppliers use IoE-based solutions to track their processes. They can
obtain information from real-time data about crop conditions and animal health
in the agricultural industry and many other things. Continuing to process this
information helps them to increase their real efficiency, improve the quality
of raw materials and even reduce energy consumption.
Solutions based on IoE and supply chain can be used to monitor production operations
and equipment status in real-time. Continuous monitoring of tools and equipment
makes it possible to detect failures in the shortest possible time, optimize the
way of using assets and tools, and increase the efficiency of the production
sector. IoE can also help improve sustainability.
IoE can bring more transparency and accuracy in the supply chain; Because logistics
operators can receive real-time data about the location and status of each of the
21
IoE-Based Supply Chain Management
organization’s assets. Using this data, they can modify and optimize the entire
delivery route if changes are needed. IoE-based solutions also help manage the
supply chain of cold products and can keep perishables safe to a large extent
by detecting problems along the way.
IoE can facilitate organizational inventory tracking and greatly increase the accuracy
of warehousing operations. Solutions using IoE and supply chain can help
preserve perishable goods by monitoring storage conditions.
IoE provides an overview of how supply chains impact a business, which can be key,
especially in more complex supply chains. Providing an overview in this area
can align different parts of an organization with each other and allow them to
work together to prevent problems from occurring.
A supply chain in which IoE is also used can help provide better services to customers.
Managers can access the information they need through mobile applications and
predict the delivery time with high accuracy. This issue can solve the problems
related to the speed of product delivery and meet the customer’s expectations.
With the use of GPS displays today, it is possible for organizations and companies
to track their sensitive goods in real-time and access their location at any time.
By automating data collection, IoE-based systems, and supply chains eliminate
human error in data collection and help improve customer demand forecasting.
Supply chain managers can forecast demand based on both historical and real-
time data. Another important point is that supply chain data can be collected
non-stop or at regular intervals. Either way, it allows businesses to tap into
data that might be difficult or even impossible to collect manually.
In a smart supply chain, IoE is one of the technologies that help managers comply
with current environmental laws and emission limits. By using various IoT
sensors for supply chain management and asset tracking, they can now get an
accurate picture of how resources like electricity and water are being used and
implement green strategies and environmental initiatives.
By combining sensors in the physical world and their influence in information
systems as a precise communication device, the environment of logistics processes
becomes an intelligent environment of high convergence and real-time measurement
and computing capabilities. The information collected by the sensors is sent to the
central processing system in real-time and is analyzed (Zhang et al., 2020). The
results of the analyzes provide the basis for correct decision-making by managers.
In addition to optimizing time in supply chain management processes, IoE allows
resources to be used effectively during processes. In addition, the transparency of
information in the performance of the supply chain will have a significant improvement
and will ultimately lead to the dynamism and integrity of the mentioned system.
Through this section, all product information such as information about the location
22
IoE-Based Supply Chain Management
of the goods being transported, information about the shipping route, information
about the delivery time, customer information, and other related information can
be tracked and accessed (Nozari et al., 2022).
IoE will be a part of the future Internet where objects and equipment and
machines are active participants in business processes and information. One of the
most vital and fundamental parts of the overall management of an organization is
the supply chain management of that organization. The department is responsible
for coordination between all units from the initial stages such as the supply of
materials to the final stages such as delivery and after-sales service. The existence
of comprehensive and reliable information platforms is one of the requirements
of the management of a supply chain. Therefore, it is important to use integrated
information devices such as IoE as correctly as possible in this part of organization
management. Covering this information accurately and at the moment facilitates
things and makes the progress of the processes more transparent. To improve this
process, cloud computing is used as a solution. In addition, other cloud computing
capabilities can be used, such as facilitating the communication of objects, creating
integration in monitoring devices and IoE in the storage, data analysis, and virtual
space platform to provide to the customer in supply chain management. For this
purpose, a model that specifies the relationship between IoE, the Internet of Things,
cloud computing, and supply chain management is needed. Figure 2 shows the
logistics system based on IoE (Ranzan et al., 2023).
Figure 2. Logistics system based on IoE
Source: Zhan et al. (2022)
23
IoE-Based Supply Chain Management
The use of IoE in logistics has led to the advancement of this industry. Many
collections use this new technology to improve their work and benefit from its
benefits. The following are the most important advantages of the IoE in logistics.
Optimization and correct use of resources
View different items in real time
Analysis, analysis and more detailed review
Better forecasting given the data
Reducing security problems such as theft
Save time by automating some processes
Increase accuracy
Identifying new opportunities according to the results of the analysis
Increased process monitoring
The ability to closely monitor the way and manner of doing work
Large and small companies need to analyze past statistics and predict the future
situation in order to improve their work process. It goes without saying that the
more accurate statistics you have, the better you can predict the future and plan for
it (Sharma et al., 2023).
Of course, it should be kept in mind that supply chain management has always
faced many challenges. Proper supply, proper maintenance and some other things
always disrupt the business process. With the help of IoE, it is possible to check and
analyze the cycle of products from production and origin to the time of delivery to
customers. But you may face problems in this work. One of the problems is security
issues. By using the blockchain network, many of the issues related to IoE can be
solved to get the job done in a better way (Nozari & Szmelter-Jarosz, 2022).
The combination of blockchain and IoT in logistics has made the security,
transparency, and work process much better and the work can be done in a better
way. The sensors that are installed on the goods transmit the necessary data to the
blockchain network, and you can track and check the products and goods with the
highest level of security.
CONCLUSION
The role of the Internet of Everything (IoE) in supply chain management is a key
and very important role that can help reduce energy consumption, optimize various
processes, reduce costs, etc. The IoE and the supply chain today are very closely
related to each other, which can undoubtedly affect the future of industries, businesses,
and many different organizations.
24
IoE-Based Supply Chain Management
IoE is an integral part of the future of supply chain management. A future in
which, in addition to the acceleration of information throughout the chain and the
analysis of this huge data, the delivery of goods to the final customers has also
been transformed, and it has led to the coordination and control of the elimination
of middlemen and the reduction of costs and production time until the delivery of
the product. becomes IoE by influencing various parts of supply chain management
such as production, warehousing, supply, distribution, transportation, information
management, and after-sales services increases efficiency and improves their
performance in an organization. The creation of a strong database facilitates the
forecasting and planning processes as well as the preparation and supply of resources.
With the services and information provided through this technology, customers get
product information, production information, and supply chain information. Using
a variety of IoE solutions during supply chain management will allow information
sharing between related departments to reach the maximum necessary level and will
improve factory workflow, increase material tracking, and optimize distribution to
maximize revenue. As a result, IoE represents the next evolution of the Internet.
Considering that humans progress and evolve by converting data into information,
knowledge, and wisdom, IoE has the ability to change the world.
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Chapter 3
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DOI: 10.4018/979-8-3693-0159-3.ch003
ABSTRACT
The emerging technologies that drive the fourth industrial revolution rely on the
knowledge and systems of previous industrial revolutions. The goal of the fourth
industrial revolution is to develop more agile, responsive, and customer-oriented
manufacturing industries. In this era, technologies with their potential to revolutionize
the production of goods and services intend to revolutionize the global economy as
well. The technologies of the fourth industrial revolution, beyond the effects they
probably have on economic inequality, can have significant negative side effects
on various fields. As business becomes more competitive and complicated at the
international level, the need for managers to pay attention to technology-based
strategies in the new era is a competitive advantage for companies. For this reason,
an effort has been made in this chapter to identify and evaluate the most important
dimensions, components, and key performance indicators in the field of information
logistics and intelligent supply chain by emphasizing the literature on the subject.
Examining Dimensions,
Components, and Key
Performance Indicators
of Information Logistics
in Industry 4.0
Mahmonir Bayanati
Islamic Azad University, Tehran West, Iran
28
Examining Dimensions, Components, and Key Performance Indicators
INTRODUCTION
Today, production is strongly influenced by global trends. Although uncertainty
or change are the primary threats to business success, there is great potential
in digitalization and Industry 4.0. The fourth industrial revolution creates a
transformation in the way companies produce, improve and distribute products.
Manufacturers are integrating new technologies including the Internet of Things (IoT),
cloud computing and analytics, and artificial intelligence and machine learning into
their manufacturing facilities and throughout their operations (Fallah et al., 2021).
These smart factories are equipped with advanced sensors, embedded software
and robotics that collect and analyze data and enable better decision making. Even
greater value is created when data from manufacturing operations is combined with
operational data from ERP, supply chain, customer service, and other enterprise
systems to create entirely new levels of visibility and insight from previously stored
information (Nahr et al., 2021).
Digital transformation is affecting almost every branch of every industry – from
large-scale manufacturing and transportation to customer service and e-commerce.
Packaged goods, retail, and manufacturing have seen some of the biggest
transformations through advances in digital technology. There are many process
areas we can look at to learn how to best take advantage of the benefits of digital
transformation, one of the most important of which is supply chain management
(Nozari & Szmelter-Jarosz, 2022). The symbiosis of the fourth industrial revolution
and the supply chain has enabled businesses to take full advantage of the latest
technologies in retail digital transformation artificial intelligence, machine learning,
predictive analytics, unified commerce and big data and thereby supply chain
management. Experience smart provision. Artificial intelligence, which includes
machine learning and predictive analytics, helps supply chain business intelligence.
These technology solutions use big data, logistics patterns and business trends to
inform and optimize the entire digital supply chain (Nozari, Fallah, Kazemipoor
et al, 2021). While aspects of the supply chain have historically been manual
and imperfect, smart supply chain management greatly improves accuracy and
visibility, and this is undoubtedly due to the connection between the fourth industrial
revolution and the large-scale supply chain. This ecosystem will be based on the full
implementation of a wide range of digital technologies – cloud, big data, Internet of
Things, 3D printing, augmented reality and more. Together, these technologies are
able to create new business models, digitize products and services, and digitize and
integrate every link in the value chain of a business (Roman et al., 2023). In fact, in
many companies, the supply chain is the business itself. The supply chain extends
the vertical integration of all company functions in the horizontal dimension, tying
the relevant players together through a network of sensors and social technologies
29
Examining Dimensions, Components, and Key Performance Indicators
(suppliers of raw materials and components, the production process itself, warehouses
and distributors of the final products, and finally the customer).
Leading and transforming into a smart supply chain are two completely intertwined
processes. On the one hand, new technologies such as big data analysis, cloud and
Internet of Things are pushing the market. On the other hand, the persistent expectations
from consumers, employees and business partners are driving companies to create
more responsive and reliable supply chains (Tufano et al., 2023). For these reasons,
in this chapter, it has been tried to examine the dimensions, components and key
performance indicators for supply chain and information logistics in Industry 4.0.
Therefore, these cases will be examined in detail in the following sections.
SUPPLY CHAIN MANAGEMENT AND LOGISTICS 4.0
Supply chain 4.0 is realized through contextual conditions and industry 4.0
technologies. As a result, the two concepts of decentralization and automation
become very important. In fact, in the thinking of Industry 4.0, autonomous control
is placed in the margins instead of being the center of control. However, there is still
an important human component that makes supply chain management change in the
decentralizing framework of Industry 4.0, because not all actions can and should be
automated, and therefore, implemented anyway (Huang et al., 2023).
The realization of the idea of decentralization behind Industry 4.0 requires an
intelligent, automatic, and preferably autonomous flow of assets, goods, materials,
and information between the origin and the destination (place of consumption)
(Nozari, Fallah, Szmelter-Jarosz et al, 2021). The problem arises when supply
chain management contradicts the principles of decentralization because supply
chain management plays a centralized role by nature. As intelligence and autonomy
are pushed to marginal digital platforms, the decisions and tasks of supply chain
management take on a strategic role, as they must monitor the entire network and
gather insights that include even the smallest activities. The core tasks of logistics
and intelligent supply chain management in Industry 4.0 are as follows (Nuanmeesri,
2023):
Adding the right level of autonomy and intelligence to logistics, in order to increase the
efficiency, effectiveness, coherence, agility, and flexibility of logistics, because
logistics need to be smarter in order to realize a much more interconnected
economy, which is becoming slower and slower.
Creating a balance between self-organized and (semi)autonomous systems and human
planning. To begin with, we need to focus on the actions and intelligence that
make human-machine collaboration and the ultimate goals critical.
30
Examining Dimensions, Components, and Key Performance Indicators
The evolution of work and management methods in accordance with Industry 4.0
requires the development of real-time and agility capabilities and moving
from the centralized organization and planning to demand-based planning and
management of uncertainty in unforeseen logistics scenarios.
The concept of Industry 4.0, the Internet of Things, and the digital economy
basically implies the importance of connectivity and the free flow of information.
The ability to use data to generate information and knowledge and connect to
meaningful information and insights and share it with various key partners present in
the supply chain is one of the prerequisites of the digital supply chain (Najafi et al.,
2022). However, realizing demand-driven manufacturing, integrated collaboration,
and real-time information requires visibility and information exchange for efficient
process control. However, most manufacturers are not able to achieve this goal
(Nozari et al., 2022). “Manufacturers know that the entire industry needs to focus
more on speed, accuracy and agility in the end-to-end supply chain in order to remain
competitive and realize Industry 4.0. The only way for them to achieve such lofty
goals is to optimize processes between old and new systems, as well as to provide
expert insights from real-time data sources to key stakeholders (Gülmez et al., 2023).
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Examining Dimensions, Components, and Key Performance Indicators
The entry of logistics into phase 4.0 caused changes in the understanding of
the concept of supply chain. This made not only flexibility and speed, but also
digitalization to be essential and defining characteristics of supply chains (Yingfei et
al., 2022). The emergence of the “digital customer” (connected customer) is putting
more pressure on suppliers, requiring better adaptation of products to customers’
demands and preferences, as well as fast and hassle-free delivery. Undoubtedly,
digitalization in the supply chain inspires creativity in operational and tactical
areas, but it also obligates this creativity in making customer relations more real
and effective (Dinter, 2013).
Figure 1. Smart supply chain
32
Examining Dimensions, Components, and Key Performance Indicators
Logistics 4.0 uses digital physical systems, the Internet of Things (IoT), and
networks in all its activities. For example, in an IoT-equipped warehouse or IoT-
assisted transportation, the part of the supply chain management that has access to
the product can easily identify damaged products based on heat and light conditions
(Bai et al., 2023). Even if there is a delay in getting the damaged products, just
knowing about it, it will enable the warehouse supply chain manager to restock the
damaged products so that there is no problem to meet the needs of the customers.
By considering the intelligent and efficient movement in all these different steps
in a comprehensive way and adding the aspect of automation, the desired picture
of Logistics 4.0 is complete. From driverless transport to smart containers, smart
warehouses, smart loading, and smart shelves to the exchange of people and
information in all possible logistics chains and contexts (Remyha et al., 2023).
Information logistics plays a key role in accelerating the following seven criteria
(Gan et al., 2022):
Suitable product
A company that offers this type of service must first know the type of products it is
going to move. Having the right knowledge gives you the advantage to manage
your time and resources properly and efficiently.
Suitable place
The right product must be delivered to the right place. Courier services are provided
by a logistics management system (LMS) the company must have knowledgeable
drivers as well as a well-established delivery and tracking system. In this system,
both the customer and the provider must have synchronized location tracking
to ensure that the products are delivered to the right place.
Reasonable cost
Pricing is very important in this context. All products and services must have a
reasonable price to match the company’s income and expenses. Having an
efficient system to maintain and update the appropriate prices ensures the
success of the logistics management system.
The right customer
Every logistics service provider must know their target market to identify the right
customers. If the service is offered to the right market, there will be a better
chance of getting good customers. In this context, some use traditional marketing
while others use digital marketing to reach more customers around the world.
Good circumstances
Any product or goods that are to be entrusted by customers to logistics service
providers must be stored and delivered under appropriate conditions. Here,
the specifications of the product should be mentioned in order to provide the
necessary facilities for its maintenance.
33
Examining Dimensions, Components, and Key Performance Indicators
Right time
Time is very important in logistics. Customers are more concerned about delivery
time than anything else. This is why every service provider must know the
right time to deliver products in an efficient manner. Each system has tracking
capabilities to monitor all deliveries and ensure they arrive on time.
The right amount
Knowing how to determine the right amount of product is also one of the keys to the
success of a logistics system. Since most providers are third-party, companies
using them must be careful to send the right amount of goods for delivery.
Thanks to modern technological advancements, third-party logistics (3PL)
systems can now manage all quantities of goods for shipment or delivery.
One of the most important elements of logistics based on technology and information
is the increase in transparency due to digitization throughout the supply chain system.
Transparency has encouraged the creation of a smarter system. In addition to that
transparency, it is an essential prerequisite that has made logistics transparent and
intra-organizational operations much more efficient and comprehensive than its
previous manifestations (Xu & He, 2022). Various smart versions of traditional
logistics components have been introduced. This issue has already changed the
way shipments move from suppliers to end users. The involvement of information
technologies in logistics tools such as smart containers and smart pallets changes
traditional transportation workflows and brings new perspectives that collect data
and make decisions based on essential information (Choi & Siqin, 2022).
On the other hand, with the introduction of Industry 4.0 in the market, many
IoT development companies have provided digital devices that can be deployed
and embedded in warehouses. Such advancements are critical and specialized in
incorporating the Internet of Things. However, the end result of the deployment
leverages technologies such as smart containers and utilities by connecting them to
cloud computing. This not only revolutionizes supply chain management but also
increases the benefit of obtaining accurate guidelines (Bucher & Dinter, 2008).
So far, the importance of data collection in these new logistics frameworks
has been talked about a lot, but the real value of this data is not limited to making
manual planning more coherent. Rather, the final stage of progress in transparency
and data collection through sensors and RFID chips (technology with the possibility
of automatic identification and tracking) is the application of advanced analytical
processes. By feeding large amounts of information into predictive and prescriptive
algorithms, modern logistics providers can improve their demand and transportation
forecasts while uncovering potential losses or improvements in their workflow.
Logistics Information System is shown in Figure 2.
34
Examining Dimensions, Components, and Key Performance Indicators
KEY PERFORMANCE INDICATORS (KPIS)
IN INFORMATION LOGISTICS
The evaluation of success and effectiveness of intelligentization is measured by
different performance indicators. Understanding these criteria and their importance by
users can be useful for conducting comparative studies as well as prioritizing various
industrial intelligence services. KPI or key performance indicator or production
metric is a well-defined measure for monitoring, analyzing and optimizing production
processes with respect to quantity, quality and also different aspects of cost. They
provide manufacturers with valuable business insights to achieve organizational
goals (Garay-Rondero et al., 2020).
In the logistics industry, KPIs are very important for measuring production, costs,
and quality rates, and what’s better than that the data and information obtained from
Figure 2. Logistics information system
35
Examining Dimensions, Components, and Key Performance Indicators
these indicators are directly reflected in the effectiveness of logistics management.
These indicators allow you to continuously monitor and evaluate all the metrics
related to your supply chain. For example, Lead Time is a KPI that examines
the duration of your company’s processes or operations from start to finish. This
component can be very vital and important for identifying strategies to optimize
processes (Bhargava et al., 2022).
KPI consists of the following elements:
Identified Metric - Anything the organization chooses to measure is a metric. There
are metrics that the organization or teams categorize as “key.” These are the
metrics that become KPIs.
Running Value - Running Value is an ignored metric that is measured at any given
moment.
Target Value - The target value is the minimum or maximum desired value for the
identified metric.
Unit of measurement - The unit selects the method of measurement and organization
for observing and tracking activity.
We can divide the key performance indicators for information logistics into three
categories, economic, environmental and social.
Social KPIs
The focus was placed on social and organizational sustainability indicators because
the concepts of social and organizational sustainability have recently been
implemented in corporate contexts. Monitoring these aspects seems to be
fundamental to a successful business strategy.
Environmental KPIs
Environmental indicators are the ones that are most used in industrial fields along
with economic indicators.
Economic KPIs
Economic indicators are indicators that have always been used in any business
field. In fact, they are fundamental because they allow us to understand the
company’s performance and to implement initiatives to make the company
more profitable.
This collection can be used by any manufacturing company that wants to design
in a sustainable way or evaluate its processes from a sustainability perspective.
In addition to the Information logistics key performance indicators listed in Table
1, there are other KPIs that can measure the performance and productivity of your
entire business. However, to use the right indicators, the first step is to determine
36
Examining Dimensions, Components, and Key Performance Indicators
what kind of data you need to improve your processes. Then all the agents of the
organization will be ready to diagnose operational issues and create strategies that
will optimize the entire supply chain of your business. The six main value drivers
for information logistics are shown in Figure 3. Information logistics will affect
all areas of supply chain management. These six core value drivers enable a step
change in service, cost, capital and agility.
The adoption of new technologies is the main lever for increasing the operational
effectiveness of supply chains. The potential impact of information logistics in the
coming years and especially in the post-covid era is very high. Reducing operational
costs and at the same time increasing the agility of the supply chain is one of the
basic features of information logistics.
Figure 3. Information logistics improvement levers and mapping them to six main
value drivers [23]
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Examining Dimensions, Components, and Key Performance Indicators
CONCLUSION
Today’s businesses compete with each other in the market with a single slogan,
maximum customer satisfaction. Any business that ignores user experience is
undoubtedly heading for its own business demise. In the meantime, the fourth
industrial revolution has increasingly increased the end user’s expectations and
expectations from the products and services they demand. Businesses whose core
services are tied to logistics and supply chain management must listen carefully to
these expectations and use all their technical and managerial strength to meet them.
Therefore, the technologies resulting from the emergence of the fourth industrial
revolution play an essential role in managing the supply chain and making this
process smarter, and successful businesses know very well that accompanying the
technologies of the fourth industrial revolution and the supply chain is the only
way for their business to survive. The importance of data flow, especially after the
Covid-19 pandemic, became more apparent. The importance of this flow in supply
chain and logistics processes was further determined due to their role in speeding
up and accuracy of processes. For this reason, in this research, an effort was made to
review the subject literature, identify and evaluate the most important dimensions,
components and key performance indicators for information logistics and smart
supply chains. A proper understanding of these concepts can be a valuable guide
for the precise implementation of intelligent logistics systems.
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Copyright © 2024, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited.
Chapter 4
DOI: 10.4018/979-8-3693-0159-3.ch004
ABSTRACT
With the realization of environmental and social sustainability in developing and
using apparel products and services, stakeholders – particularly consumers- are
more concerned regarding these issues in business operations. In order to address
new developments and changing trends, apparel businesses are compelled to
identify and implement innovative and sustainable solutions for regular activities.
This chapter assesses how the textile and apparel supply chains can comply with
the United Nations’ sustainable development goals. In particular, verifying the
source of raw materials and maintaining visibility of merchandise products and
related services while moving through the value-chain networks is challenging and
maintains interoperable business sustainability. Information systems play a vital
role in maintaining operational sustainability. This chapter presents a blockchain-
based Internet of Things (IoT) infrastructure powered by service-oriented computing
architecture as a solution for information processing for maintaining sustainable
supply chain operations.
Supply Chain Information
System for Sustainability
and Interoperability of
Business Service
Kamalendu Pal
https://orcid.org/0000-0001-7158-6481
University of London, UK
Copyright © 2024, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited.
41
Supply Chain Information System for Sustainability and Interoperability of Business Service
INTRODUCTION
In recent decades, supply chain operations have observed a few exclusive trends, such
as the globalization of product manufacturing and service offerings, optimized product
life cycles, digitalization business processes, and multifaceted customer experiences,
leading to the evolution of highly complicated supply chains. Incorporating social and
environmental responsibility-related issues in regular business operations is becoming
increasingly essential to companies’ and supply chains’ success (Choi et al., 2019).
Companies are responsible for their activities affecting their businessesenvironment,
society, economy, and supply chains business partners. The United Nations’ new
sustainable development goals for 2030 have come into force since 2016, which
initiated seventeen sustainable development goals (SDGs, 2023). The SDGs will
demonstrate the new objectives of economic, social, and environmental developments,
such as ending poverty, economic growth, and environmental protection are the few
important ones. As a result, sustainability within the operations of organizations
and the supply chain has become a contemporary issue and an essential agenda of
research communities. The use of sustainability business operational practices not
only enhances the environmental and social performance of companies and their
supply chains but also provides an opportunity for businesses to acquire a new set
of competencies, which can help them get a competitive advantage by deploying
sustainability initiatives within and outside of the organizational boundaries (e.g.,
business partners operations).
In this way, supply chain sustainability is a central theme of most business
organizations. The main objective of sustainable supply chains is to create and maintain
long-term economic, social, and environmental value for all stakeholders involved
in delivering products and services to specific markets. Consequently, all businesses
today appreciate the value of supply chain management (SCM) and sound operational
practices, and the advantages of digitization of its business processes have become
a popular topic in both sustainable commercial operations and academic research
purposes (Pal, 2019). Research has shown that sustainability has become necessary
for businesses considering social and environmental issues in their strategies. It is
also essential that businesses and their supply chains accelerate the shift from focus
to sustainability and use technologies to digitalize business processes (Pal, 2019).
In addition, business organizations are already making significant investments in
digital supply chains because they recognize that digitalization will give them five
big prizes: integration, transparency, productivity, sustainability, and, ultimately,
the opportunity to transform their supply chain operating model.
Moreover, sustainability is essential for accessing global markets and accomplishing
high profits (Pal, 2021). For example, while sustainable shipment management was
considered a cost in the past, now, thanks to modern technologies (e.g., IoT, radio
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Supply Chain Information System for Sustainability and Interoperability of Business Service
frequency identification, blockchain, and cloud computing), it is possible to guarantee
sustainable logistics. Indeed, using these emerging technologies, improving carbon
emissions-related issues and saving resources is possible. One of the most critical
requirements for sustainable supply chain management demands the transparency of
information and appropriate communication mechanisms between the supply chain
business stakeholders. In order to earn these goals, it is essential to have adequate
information and communication technology (ICT) standards that ensure the reliability
of information systems architectures and foolproof security of operational data.
As to emerging technologies, the Internet of Things (IoT) and radio frequency
identification (RFID) technology are heavily used in supply chain operations. These
technologies can shake up an industry or enable a business model that creates an
entirely new way of operations management, even though these technologies may be
unfavorable to the users at the early stage (Pal, 2021). Besides, disruptive technologies
dominate different industries with new, exciting features that are differentiated from
existing technologies (Pal, 2019). Business models based on disruptive technologies
are typically more efficient, productive, and convenient than those established on
the incumbent technology (Pal, 2021). For example, the IoT has radically changed
warehouse and inventory management by tightly coupling distribution centers,
transportation, and customer relationship management (CRM) systems. As a result,
IoT could reduce operational costs and provide more customized, responsive, and
innovative customer service.
The recent emergence of the digitation of supply chain business processes is
attracting massive attention from academics and practitioners. However, evaluating
and adopting modern technologies in supply chain operations are strategically
complex. Strategic thinkers are putting forward a cautious reminder that digital
supply chain transformation projects are not all about doing everything at once.
Instead, commercial industries need to consider the scale of the opportunities across
the supply chain and the risks involved, prioritize those technology interventions
that impact most on supply chain regular operations, and deliver outcomes that best
support corporate strategic goals.
Moreover, the data exchanges between autonomous networks over untrusted
channels are also significant. Blockchain technology opens new dimensions towards
the data exchange mechanism, intelligent resource management, user access control,
audibility, and chronology in stored transactions to ensure data security, privacy,
and stakeholder trust. Besides, academics and practitioners are concentrating their
research activities on two particular areas: (i) supply chain management-related
sustainability issues and (ii) deploying emerging technologies to improve the supply
chain business-partners collaboration. In doing so, they are ensuring broader business
operations transparency and traceability of resources along the supply chain networks
by exchanging operational data.
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Supply Chain Information System for Sustainability and Interoperability of Business Service
Modern technologies emerging under industry 4.0 create new business and
financial opportunities for supply chain management. For example, in emerging
technologies, researchers reported blockchain as a disruptive technology that
guarantees greater transparency and traceability in the exchange of data (Pal & Yasar,
2020). Besides, blockchain technology enables supply chain managers to enhance and
track goods and other resources in real-time from their origins through the overall
operational business processes network. In this way, blockchain technology enables
the supply chain stakeholders to know who is performing which actions by defining
and evidencing the time and location of the actions. One of the essential advantages
of blockchain technology is providing viable solutions for identity management (Liu
et al., 2020), and It also provides greater spatial and temporal flexibility. In this way,
blockchain technology is bringing operations, production, and sales closer together,
and it promises significant changes by rethinking, redesigning, and reshaping the
operational management of the supply chain.
Indeed, one of the most investigated topics is the use of blockchain for product
tracking and tracing, and the evidence is available in the research literature (Bai &
Sarkis, 2020) (Tang & Veelenturf, 2019). Specifically, the research literature has
analyzed detection systems such as RFID, GPS technology, and IoT infrastructures
(Bouzembrak et al., 2019) (Chanchaichujit et al., 2020) (Lam & Ip, 2019) (Ketzenberg
et al., 2015) (Wognum et al., 2011). These systems have brought forward new ways
of monitoring products and business processes, from the origin to the end consumer,
regarding price, date, location, and quality assurance certificates. However, they suffer
from many drawbacks related to security issues, standardization, interoperability, and
distribution among the players on a large scale (Zhang & Kitsos, 2016) (Matharu
et al., 2014). Blockchain technology can fill these inefficiencies by allowing goods
management without intermediaries or trusted parties (Chang et al., 2020) (Min,
2019). The effectiveness of supply chain transactional performances can be improved
by crediting to the distinctive features of blockchain. Indeed, to achieve adequate
traceability, the visibility of the business process needs to have a unified, assured,
and tamper-proof shared ledger that is globally accessible by all the stakeholders
(Lezoche et al., 2020) (Kamble et al., 2020). Furthermore, optimizing the entire
supply chain can take place through smart contracts to verify and permit actions by
physical devices that collect information from the operational areas, enhancing the
security of the IoT systems architectures (Pournader et al., 2020). Smart contracts
help the system automation for particular actions based on the constant detection by
the sensors along the supply chain operations, such as automatic financial payment
after receipt of the required product (Habib et al., 2020) or appropriate management
of anomalies along the shipment (Hasan et al., 2019).
Therefore, this chapter aims to test further insights for increasing the literature on
improving sustainability issues using modern technologies. The rest of the chapter
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Supply Chain Information System for Sustainability and Interoperability of Business Service
is structured as follows. Section 2 presents the overview of the modern technologies
allowing goods tracking within supply chains. Section 3 highlights the discussions
focusing on sustainability issues and managerial implications. Finally, Section 4
concludes the chapter with concluding remarks, limitations, and insights for future
research.
BACKGROUND AND RELATED RESEARCH
This section presents an overview of sustainable development, the applications
of sustainability in the context of SCM, and a review of recent research on the
sustainability issues of Industry 4.0 and the impact of evolving technologies on
supply chains.
Sustainable Development
The central concept of sustainability focuses on economic viability and the industry’s
role in implementing sustainable solutions for economic advantage. Academics and
practitioners often consider the sustainable solution as a way to mitigate the limitations
of linear production and consumption models for increasing resource use efficiency.
At the same time, some of the researchers are debating on the conceptual view of
circular economics (CE) and sustainability. The CE introduces better balances of
sustainability’s economic, environmental, and social aspects. Countries such as
China promote CE as a cleaner production strategy that endorses efficient use of
resources. At the same time, other regions, such as the European Union, Japan, and
the USA, also consider it a waste management strategy (Ghisellini et al., 2016).
Economic system circularity was introduced with the law of thermodynamics as
its fundamental principle (Pearce & Turner, 1990). Initially, this was conceptualized
to describe matter and energy degradation to maintain the sustainability of the
earth’s natural resources. In these initial CE descriptions, the environment has three
main functions: supply resources, provide a life support system, and offer a sink for
emissions and waste. Unlike other economic functions with direct pricing, sometimes
no direct price or market for environmental goods exists (what is the price of air
and water quality?). However, recent Life Cycle Assessment (LCA) methods have
tried to monetize environmental prices, indicating the loss of economic welfare as
a result of environmental emissions (De Bruyn et al., 2018) (Weidema, 2015). In
addition, environmental policies and consumer and producer responsibilities have
been employed to mitigate the high consumption of resources (Ghisellini et al., 2016).
CE provides many advantages to industrial applications: (i) elongating an asset’s
usage cycle, (ii) improving asset utilization through sharing, (iii) asset reusing,
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Supply Chain Information System for Sustainability and Interoperability of Business Service
recycling, and remanufacturing, (iv) regenerating and preserving natural resources
by returning biological elements to their original ecosystem and avoid nutrients
leakage from one system to another. In order to implement these advantages and
value drivers, a framework named ReSOLVE - Regenerate, Share, Optimize, Loop,
Virtualize, and Exchange has been introduced by the Ellen MacArthur Foundation
(Ellen MacArthur Foundation, 2015).
However, CE and its basic conceptual principles are not without criticism
(Prendeville et al., 2018): (i) First is the definition of CE. Practitioners are often
unclear regarding the fundamental principles of CE. Some consider it a macro-level
activity, while others consider it a micro-level intervention. (ii) Second, some principles
may not necessarily benefit the environment. For example, infinite recycling of
materials and energy will not be without efficiency loss; reuse of old technologies
may result in higher energy consumption or sharing economy initiatives that may
not be as environmentally viable as promoted. (iii) Third, very few businesses adopt
CE-related strategies. Also, CE models often give more authority to businesses than
consumers and social communities.
While CE can help companies realize business outcomes of implementing
sustainable operations, the implementation scope and scale of CE efforts are currently
limited. As new technologies emerge, novel business models can orient organizations
towards enhancing sustainability outcomes through CE principles.
INDUSTRY 4.0
The term Industry 4.0 presents a promise of a new industrial revolution, which
integrates advanced manufacturing methods with the Internet of Things to create
interconnected manufacturing systems that communicate, analyze, and use the
information to drive further intelligent action back in the physical world. Industry
4.0 originated from the German word Industrie 4.0, a set of connected cyber-physical
objects capable of using Big Data analytics within the manufacturing and production
domains (Vogel-Heuser & Hess, 2016). Industry 4.0 is part of the Industrial Internet
of Things (IIoT) (Lom et al., 2016), and different characteristics have been assigned to
Industry 4.0 to equip not only manufacturing systems with advanced data acquisition
technologies but also value generation and service innovation (Kagermann, 2015).
In recent decades, Germany has developed a four-step strategic plan for
transforming industries of the information age to industry 4.0: (i) building a network
of CPSs, (ii) researching the ‘smart factory’ and ‘intelligent production’ concepts,
(iii) integrating the elements of value chains on three levels of horizontal integration,
vertical integration, and end-to-end integration, and finally (iv) achieving eight
planning objectives. The proper planning objectives include standardization, efficient
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Supply Chain Information System for Sustainability and Interoperability of Business Service
management, a reliable industrial infrastructure, safety and security, organization and
work design, workforce training, creating a regulatory framework, and improving
the efficiency of resources (Zhou et al., 2015).
Given that Industry 4.0 is such a broad topic, blockchain technology is evaluated
to show its potential as one of the most recent elements. However, the importance
of blockchain resides in its ability to enhance information integration across supply
chains and between various business stakeholders, one of the main agendas of
industry 4.0.
With so many potential opportunities to digitalize various aspects of the supply
chain, business organizations must take a structural approach to strategic decision-
making. In order to help the supply chain strategic decision-makers, this chapter
presents a series of digitalization business scenarios covering inbound, internal,
outbound, and end-to-end perspectives, as shown diagrammatically in Figure 1.
By breaking down the supply chain into a series of digital scenarios, the chapter
has presented a framework for robust decision-making based on a clear understanding
of what outcomes business corporations seek. In addition, this section highlighted
maturity models for each scenario to help businesses think about which areas they
want to focus on, assess their level of achievement to date, and prioritize their
efforts. Besides, the framework starts by defining the practical application of digital
technologies at the appropriate stage in the value chain. Finally, before assessing
Figure 1. A digital supply chain applications scenario
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Supply Chain Information System for Sustainability and Interoperability of Business Service
current and required capabilities in terms of technology and skills, the business
benefits and challenges finish with assessing achievability.
Collaborative Electronic Sourcing
Recent global events have presented new dimension of supply chain visibility into
business and operations. In the face of disruption, organizations could not forecast
demand, predict supply, and meet delivery schedules. As a result, organizations
of all sizes need to speed up their transformation initiatives to increase flexibility,
agility, and visibility for a more resilient supply chain. Digitizing supply chains
through modern integration, automation, and secure and connected ecosystems
makes it easy to manage information flows and uncover insights to ensure continued
operations, even in the face of significant disruptions. The dominating options are
electronic data interchange (EDI) and automated call-off are established forms of
digital sourcing; businesses are trying to extend this to manage tiers beyond direct
suppliers and to provide the option of initiative-taking warning systems.
Further, business organizations try to create deeper strategic engagement with
supplier communities. In addition, business organizations need seamless connectivity
among themself, by which automated replenishment from the supplier network
(multiple tiers) with real-time business operation monitoring and predictive disruption
analysis capabilities. At the same time, businesses must score how significant they
consider the opportunities and advantages this operation practice could bring and the
challenges and uncertainties. The proceeding step is to take the initiative to evaluate
how mature the current enabling technologies are now and over the coming years
and how well-developed their organizational skills, know-how, and attitudes are.
By repeating this process for the other nine scenarios outlined below, businesses
can develop concrete strategic business cases where they must concentrate their
corporate resources to attain strategic goals.
Digital Factory Design
The digital economy represents the pervasive use of IT (hardware, software,
applications, and data communication technologies) in different areas of the economy,
including internal operations of organizations (business, government, and non-profit);
transactions between organizations; and transactions between individuals, acting
both as consumers and citizens, and organizations. Digital 3D modelling systems for
factory design are becoming increasingly sophisticated. This process, coupled with
the advent of flexible manufacturing systems and data connectivity, these advances
stimulate a new paradigm in factory layout design, process, and material flows. As
well as looking different, tomorrow’s digital factory will significantly impact takt
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Supply Chain Information System for Sustainability and Interoperability of Business Service
time, buffers, skills, and staffing. It should also be easily reconfigurable in response
to change conditions.
Real-Time Factory Scheduling
How manufacturers run factories, as well as how they design them, will change
dramatically, and this requires s form of digital business process re-engineering.
The prize could significantly increase productivity, improve delivery performance,
respond to change, and have fewer missed sales. However, making full use of the
sensor-enabled, smart device, real-time opportunity with seamlessly joined-up ERP,
MES, and cloud systems is not easy. Instead, it needs careful navigation to maximize
business benefits and avoid costs and complexity.
Flexible Factory Automation
Ever-cheaper technology, collaborative robotics, and machine learning mean
manufacturers are entering a new era of factory automation. The business benefits
include lower variable costs, increased customization, labour saving, quality
assurance, closer-to-make location, and improved health and safety. One crucial
aspect is introducing equipment modularity and standards into the overall vision,
supporting the necessary economies, and enabling flexible reconfiguration.
Digital Production Processes
The shift towards replacing ‘subtractive’ manufacturing processes (such as machining)
with ‘additive’ processes (such as laser sintering and digital printing) has obvious
benefits in cost, with even more significant opportunities in enabling new product
designs and enhanced customization. In addition, these new techniques could bring
about the disruptive reconfiguration of complete supply chains and industry sectors.
Customer Connected E-Commerce
At a minimum, companies should aim to extend e-commerce to optimize web-based
order management, including personalized configuration, omnichannel access,
and last-mile delivery. The latter is becoming a critical competitive differentiator,
particularly in retail consumer goods, where ‘last-mile’ costs often outstripped the
total cost of manufacturing and primary distribution. As a result, companies are
now looking beyond stereotypical business operations and will use completely new
business models based on customer-connected supply chains – constantly monitoring
product usage and experience and tailoring the offering to suit.
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Supply Chain Information System for Sustainability and Interoperability of Business Service
Extended Supply Chain Monitoring
It involves the entire network, using data science, predictive analytics, real-time risk
management, and dynamic resource optimization – enabled by distributed sensors
and track-and-trace to create visualization optimize information systems integration,
predict disruptions, and support dynamic decision-making.
Digital Product Quality
The vision for Total Quality Management (TQM) in the digital context involves end-
to-end transparency, real-time root cause analytics, and initiative-taking resolution
driven by customer connectivity. The challenge is to connect a series of ‘traceability
islands’ back from customers, across internal operation networks, right through to
suppliers. The potential benefits are considerable, from faster problem resolution,
problem prevention, customer satisfaction, performance, compliance verification,
and avoided warranties.
Digital Supply Network Design
It presents the opportunity at the total supply network level. This involves digital
network design, modelling, and visualization tools that support a deeper understanding
of fundamental dynamics and drivers covering the cost, responses, risk, resource
access, and innovation. The tools also support rapid experimentation regarding
possible future network options leading to breakthrough scenarios and faster
transformation. This can lead to new network design principles and step changes
in supply collaboration, site location, capacity, inventory, and customer response.
Product Lifecycle Management
There is a growing need to integrate product-based data systems with supply chain-
based systems, aligned with a single vision for product lifecycle management (PLM)
and value capture. These next-generation PLM systems can provide accurate, up-to-
date product information accessible throughout the value chain and product lifecycle.
This enables enhanced cross-function and cross-organizational involvement in the
design, collaborative innovation, design for manufacture, procurement, platform-based
design philosophies, quicker time-to-market, and improved portfolio management.
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Supply Chain Information System for Sustainability and Interoperability of Business Service
IoT for the Supply Chain Management
The vision behind the IoT is to create real-time connection and data communication
with people or any business process along supply chain operation, anytime, anywhere,
using any network. It facilitates overcoming the limitations of legacy systems and
ways of data communication and processing. In this way, IoT systems embedded
with industrial operations often consist of software, electronic components, actuators,
sensors, detectors, and wireless connectivity that enable them to collect data from
these objects can be defined as the “IoT”. An IoT system has the following essential
characteristics:
IoT is a ubiquitous technology advancement that enables supply chain
business-related objects to be connected to the internet via wired or wireless
networks to communicate.
Several wireless sensor networks are available for IoT devices, including near-
field communication (NFC), Zigbee, radio frequency identification (RFID),
Bluetooth, and Wi-Fi.
The sensors can be connected to various technologies, including long-term
evolution (LTE), general packet radio service (GPRS), and global system for
mobile communication (GSMC).
The efficiency of an IoT system is largely determined by three main
components, each of which is vital to its day-to-day operation: (i) perception
layer, (ii) network and middleware (Edge, Fog, and Cloud) layer, and (iii)
application layer.
Nevertheless, cloud computing offers virtually unlimited storage and system
capabilities to address many IoT-related challenges. Consequently, the phrase “cloud
of things” (CoT) is used to allude to the fusion of IoT and cloud computing. The CoT
is a paradigm for increasing productivity and improving system performance that is
widely used by most industries and manufacturers. Several researchers discussed in
their research (Pal, 2023) the use of the cloud to analyze vast amounts of data (i.e.,
Big Data) when data storage and processing are required.
With the advent of the IoT, vast amounts of data are generated in real-time, which
poses a significant concern for traditional cloud computing network topologies (Fang
& Ma, 2020). A traditional cloud infrastructure condenses all processing, storage,
and networking into a limited set of data centers, and the distance between remote
devices and remote data centers is relatively wide (Wang et al., 2010). Edge computing
could address this challenge since it provides access to computing resources closer
to IoT edge devices and may lead to a new ecosystem for IoT innovation (Jiang et al.,
2020). In this way, architectural issues on IoT systems in automating supply chain
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Supply Chain Information System for Sustainability and Interoperability of Business Service
operations play a significant role, and there are diverse types of layered architecture
for supply chain industrial applications (Pal & Yasar, 2020).
IOT SYSTEMS ARCHITECTURE
The layered architecture is designed to meet the requirements of various industries
(e.g., manufacturing, retail), enterprises, societies, institutions, and governments.
The functionalities of the various layers are (Pal, 2023): (i) edge layer: This is the
hardware layer and consists of sensor networks, embedded systems, RFID tags,
and readers or several types of sensors in different forms. Many of these hardware
elements provide identification and information storage, information collection,
information processing, communication, control, and actuation, (ii) access gateway
layer: It takes care of message routing, publishing, and subscribing and performs
cross-platform communication if required, (iii) the middleware layer interfaces
the access gateway layer and the application layer. It is responsible for functions
and takes care of issues like data filtering, data aggregation, semantic analysis,
access control, and information discovery, such as EPC (Electronic Product Code)
information service and ONS (Object Naming Service), and (iv) application layer
that is responsible for delivering various applications to different users in IoT. Figure
2. represents a simplified IoT technology-based architecture for SCM.
About the technologies of IoT, (Jiang et al., 2020) presents the technology areas
enabling the IoT: (i) identification technology: The purpose of identification is to map
a unique identifier or UID (globally unique or unique within a particular scope) to an
entity to make it retrievable and identifiable without ambiguity, (ii) IoT architecture
challenges: Scalability, modularity, extensibility, and interoperability among
heterogenous things and their environments are the essential design requirements for
IoT, (iii) communication technology, (iv) network technology: The IoT deployment
requires the development of suitable network technology for implementing the
vision of IoT to reach out to objects in the physical world and to bring them into the
internet, (v) software and algorithms, and (vi) hardware technology which includes
intelligent devices with enhanced inter-device communication.
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Supply Chain Information System for Sustainability and Interoperability of Business Service
The other essential technologies necessary for the IoT-based sensing environment
are: (i) data and signal processing technology, (ii) discovering and search engine
technology, (iii) relationship network management technology in managing networks
that contain a vast number of heterogeneous things, and (iii) power and energy
storage technology, (iv) security and privacy technologies to maintain two significant
issues in IoT system, and (iv) standardization which should be designed to support
a wide range of applications and address standard requirements from a wide range
of industrial SCM systems.
Review of Recent Literature
In this way, information technology enables effective supply chain management; and
information sharing capability. This section presents a brief review of IoT technology
and its uses in SCM’s different application areas: (i) procurement process, (ii)
make process, (iii) delivery process, (iv) return process, and (v) industry-specific
deployment.
Figure 2. A layered IoT architecture for supply chain operation
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Supply Chain Information System for Sustainability and Interoperability of Business Service
The IoT technology can potentially ‘connect the unconnected,’ It introduces a
new concept that aims to enhance the forms of communication the individual supply
chain business partners need today. In this way, it addresses many supplies chain
operational challenges, including the enhanced business need to improve supply
chain information transparency and introduce the integrity of production data and
the identity of products. At the same time, IoT applications generate vast volumes of
data along the supply chain operations, and often this data resides in silos, which are
generally underutilized and present to extract real-time business insights information.
Table 1. Applications of IoT technology for supply chain operations
Procurement process: The request for materials and services by companies is the sourcing process. Planning
source activities strategically across the supply chain is a sign of success. Yuvaraj and Sangeetha (Yuvaraj
& Sangeetha, 2016) highlighted how to monitor goods anytime and anywhere by integrating RFID tags with
GPS technology to track indoor and outdoor products in a supply chain environment. The impact of IoT on
supplier selection was studied by Yu and colleagues (Ng & Wakenshaw, 2017). Also, several advantages of
IoT regarding the sourcing process have been identified. For example, in analyzing the impact of the cost of
sensors and notifications on the purchase cost of a unit, researchers (Decker et al., 2008) developed a simple
linear cost model.
Make process: The operational areas that IoT applications can enhance and relevant to the supply chain
make process involves factory visibility as in (Wang et al., 2016), management of innovative production
networks as by (Veza & Gjeldum, 2015), intelligent design and production control as by (Zawadzki &
Zywickl, 2016) systematic design of the virtual factory as by (Choi et al., 2015), smart factory in the
petrochemical industry (Li, 2016), opportunities for sustainable manufacturing in industry 4.0 (Stock &
Seliger, 2016).
Delivery process: The delivery function is one of the most significant logistics tasks. Logistics includes
planning, storing, and controlling goods and services flows (Ballou, 2007). The delivery process in the
supply chain concerns the warehouse, inventory, order management, and transportation. The main impact of
IoT on the supply chain delivery process includes: (i) Warehousing function: the IoT enables timesaving of
joint ordering via smart RFID tags (Angeles, 2005). IoT also achieves collaborative warehousing via using
smart things and multi-agent systems. It also increases the safety and security of the supply chain (Liukkonen
& Tsai, 2016). (ii) In order and inventory management: the IoT enables sharing of information and inventory
accuracy (Bowman et al., 2009) using RFID tags. [iii] In transportation function: the IoT achieves accurate
and timely delivery using sensors and networks (Fang et al., 2013). It also saves smartphone scanning and
recording time (Li et al., 2014).
Return Process: A closed-loop supply chain model to meet the demand of sales collection centers using
new and remanufactured products presented by researchers (Paksovy et al., 2016). The e-reverse logistic
framework was designed by Xing et al. (Xing et al., 2012). Fang and other searchers proposed an integrated
three-stage model for optimizing procurement, pricing, product recovery, and strategy of return acquisition
(Fang et al., 2016).
Industry-specific deployment: IoT technology is also deployed in various supply chain applications. For
example, a group of researchers used IoT for a pharmaceutical supply chain (Yan & Huang, 2009), and it has
also been used for the construction industry (Shin et al., 2011), the petrochemical industry (Li, 2016), retail
industry, and food supply chains (Verdouw et al., 2016).
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Supply Chain Information System for Sustainability and Interoperability of Business Service
These data silos can be considered trapped or hidden sources of potential business
insights and value, which can be made available after appropriate processing steps.
For example, appropriate processing steps can provide facilities with the shift from
mass to customized products for specific customers. Finally, the research community
highlights the requirements to establish interoperable data exchange standards among
production business partners (Pal, 2021).
The other essential characteristics of these data silos are distributed in nature,
and the service-oriented computing (SOC) paradigm presents an attractive solution
for providing business services. These services are self-contained application
systems used over industry-specific middleware architecture, capable of describing,
publishing, locating, and orchestrating over dedicated data communication networks.
These architectures are often used in large-scale data center environments. These
architectures are often used in large-scale data center environments. However, data
centers’ consolidation and centralization produce a significant problem due to the
increased distance between customers and relevant services for business. Besides,
this arrangement creates different outcomes in high variability in latency and
bandwidth-related issues. To address this issue, decentralized SOC architectures,
namely cloudlets, have emerged, particularly regarding resource-intensive and
interactive applications. Cloudlets are small-scale data centers near user applications
and can mitigate low latency and high bandwidth guarantees.
Despite the potential, as mentioned earlier, IoT technology is also facing many
challenges: (i) device reliability and durability, (ii) security and privacy issues, (iii)
scalability and latency, and (iv) standardization. Device reliability and durability
often relate to industrial operations (e.g., manufacturing, transportation, and retail
business). These issues include remote access control, reliability, connectivity, and
reliable services provision. The other significant challenge is security and privacy
issues. It includes authentication and access control in industrial control systems
security, data protection, privacy preservation under data protection regulations, and
the protection and security of human, industrial assets, and critical infrastructures.
Unfortunately, conventional security and privacy approaches are not extremely helpful
to IoT-based industrial supply chain applications due to their dynamic topology and
distributed nature. In addition, the present Internet architecture, with its server-based
infrastructure, might be unsuitable for managing numerous devices and substantial
amounts of data because individual servers may pose a single point of failure for
cyber-attacks and physical damage.
Moreover, centralized information systems may pose a fragility for IoT deployments
in the supply chain for traceability purposes. A centralized data hosting and control
approach can lead to several business risks and operational issues related to data
integrity, security, and privacy. For example, cloud-based solutions for monitoring
IoT data may be subject to manipulation and privacy legislation issues that arise
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Supply Chain Information System for Sustainability and Interoperability of Business Service
when exporting substantial amounts of confidential and susceptible information to
external services in other jurisdictions (Kshetri, 2017) (Cam-Winget et al., 2016).
Additionally, these solutions may cause opacity and increase information asymmetry
between supply chain exchange partners. Blockchain technology can help to alleviate
several of these problems.
Blockchain Technology
Blockchain is a new type of database. In this database, the data is saved in a block
linked to other blocks in a chain creating the blockchain. This way, a blockchain
is distributed data structure, a distributed ledger, in which the data is shared on a
peer-to-peer network. The network members and nodes communicate and validate
the data following a predefined protocol without a central authority. Distributed
ledgers can be either decentralized, giving equal rights to all users, or centralized,
providing specific users with special rights. In addition, blockchain is, by nature, a
distributed ledger since each network node has a copy of the ledger. Depending on
the right of the users, blockchain can be designed as a centralized or decentralized
ledger. If blockchain is designed to share decision-making among multiple users, it
is decentralized; if one central entity is the primary decision-maker, it is centralized.
Blockchain technology was popularized with the ‘Bitcoin’ cryptocurrency peer-
to-peer network. Blockchains are created using cryptography in which each block
transaction, file of data – has a cryptographic hash and is linked to a previous
block. Once a block is verified by a certain percentage of the network nodes, it is
added to previous blocks and forms a blockchain, also known as a public ledger of
transactions (Casado-Vara et al., 2018).
Blockchain technology alters how administrative control is digitally regulated
and maintained. In blockchains, data are converted to digital codes, stored in shared
databases, have higher transparency, and limited risk of deletion and revision
immutability. Blockchain potential lies with every agreement, payment, and
transactional activity having a digital record. These records may be validated and
shared among individuals, machines, algorithms, and organizations. Intermediaries
such as brokers, bankers, and lawyers are needed less often (Lansiti & Lakhani, 2017).
Intermediaries function as intermediaries and oversee the accuracy and verification
of transactions in different industries. With blockchain, trust is shifted from human
and traditional agents for verifying transactions to computer codes.
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Supply Chain Information System for Sustainability and Interoperability of Business Service
Blockchain technology appears in the commercial world with enormous promise.
Bitcoin was an audacious idea: until cryptocurrencies came along, no one could
transmit value at a distance without the permission and support of a third party. In
this way, it is a simple but revolutionary idea of instant value transfer. For example,
in the Bitcoin market, an individual has complete control over their Bitcoin balance.
Unlike a bank balance, an individual’s Bitcoin balance cannot be manipulated or
viewed digitally. If the individual has the proper passcode, they can authorize entry
on the blockchain ledger and transfer it to another individual’s address (Athey et al.,
2016). Among blockchain technology advantages are transparency, less risk of fraud,
instantaneous transactions, privacy and security, financial data assurance, and no
exchange costs (Sharma et al., 2017) (Crosby et al., 2016). In addition, blockchain
technology can provide the following capabilities, which may be dependent on the
platform needed to be used (Barton, 2018): (i) Shared ledger: a data structure that
is distributed locally and shared between different participants; (ii) Permissioning:
secure and authenticated transactions that ensure privacy and transparency of data;
(iii) Smart contract: business terms are embedded in a database and are implemented
with transactions; and (iv) Consensus: transactions are endorsed by relevant users
that ensure the immutability and traceability of data.
Most existing blockchain researchers concentrate on Bitcoin and cryptocurrency-
related industrial applications (Yli-Huumo et al., 2016). However, the technology
can be employed in different industrial applications. Although blockchain is in its
Figure 3. A diagrammatic representation of a blockchain
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Supply Chain Information System for Sustainability and Interoperability of Business Service
relative infancy, some consider it a general-purpose technology (GPT) with several
key features of GPTs (Kane, 2017). GPTs such as the steam engine, electricity, and
the internet result in innovation and productivity gains among multiple industries,
leading to economic growth for years (Catalini & Gans, 2016), and this outcome
is part of the blockchain promise; whether it comes to fruition is an open question.
Blockchain technology has attracted wide attention due to cryptocurrencies (e.g.,
bitcoin) (Nakamoto, 2008). Technically, a blockchain is managed by a network of
nodes, and every node executes and records the transactions. A simple blockchain
diagram is shown in Figure 3.
Industry users of the blockchain-based information system network use mining
nodes to create new blocks, verified by algorithmic software for their information,
and ultimately add them to a distributed P2P network. Blockchain technology uses the
consensus algorithm to add a new block to the network and follow the steps below:
1. Blockchain network user uses the cryptographic-based private key to sign a
transaction and advertises the book to their peers.
2. Blockchain network peers validate the received transaction and advertise it
over the blockchain network.
3. Involved users generally verify the transaction to meet a consensus algorithmic
digital agreement.
4. The miner nodes add the valid transaction into a time-stamped block and
broadcast it again into the blockchain network.
5. Next, verifying the advertised block and matching its hash with the previous
block, the block in consideration adds to the blockchain network.
This way, consensus algorithms are one of blockchain technology’s most
essential and revolutionary aspects. For example, consensus algorithms use rules
and verification methods to validate data that lets the blockchain network, including
devices, agree about adding data to the blockchain network (Bashir, 2017).
One of the benefits of blockchain-based technology is to validate the block’s
trustfulness in a decentralized, trustless business operating environment without the
necessity of the trusted third-party authority. In a blockchain-based P2P network
environment, reaching a consensus on a newly generated block is challenging as the
consensus may favour malicious nodes. This challenge can be mitigated by using
dedicated consensus algorithms. Typical consensus algorithms are – proof of work
(PoW), proof of stake (PoS), and practical byzantine fault tolerance (PBFT) (Bach
et al., 2018).
In this way, blockchain can be defined as a decentralized, encrypted database
distributed across a peer-to-peer network without a central authority to control and
secure it. A consensus mechanism protects and validates the information stored in the
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Blockchain. Consensus algorithms refer to the different mechanisms used to reach
an agreement and ensure security in a distributed system. This kind of system faces
a fundamental problem similar to the Byzantine Generals Problem, which relies on
achieving consensus in the presence of several faulty and malicious participants. As
it is based on a decentralized and distributed network, Blockchain also needs such
algorithms to handle data and reach consensus. There are several types of consensus
algorithms used in a real-world implementation. The most common algorithms are
Proof of Work, the first consensus algorithm implemented by the first Blockchain
(Bitcoin), Proof of Stake, and Delegated Proof of Stake.
Blockchain technology can significantly transform many activities and operations
in the supply chain that require increased attention from academics and practitioners
(Pal, 2022). Numerous studies have reported significant advantages of blockchain
technology in logistics and supply chain management (Kamble et al., 2019). These
benefits include improvement in cybersecurity and protection (Kshetri, 2017),
transparency and accountability (Kshetri, 2018) (Zou et al., 2018), traceability
and fraud prevention (Biswas et al., 2018), and researchers highlight many other
operational management issues. Blockchain technology can redefine, redesign, and
remodel the characteristics of the relationships between all the players in the supply
chain (Queiroz & Fosso Wamba, 2019).
Blockchain technology in SCM makes operation management safer, more
transparent, traceable, and efficient (Aste et al., 2017) (Kshetri, 2018). Furthermore,
blockchain technology can increase the cooperation between the members of SCM
(Aste et al., 2017), with indirect positive effects on cost and efficiency in the supply
chain. Blockchain technology can also enhance customers’ trust, thanks to the
traceability of goods throughout their journey across the supply chain (Biswas et
al., 2017), and supports the prevention of product fraud and fakes across the supply
chains (Chen, 2018), which has a positive impact in terms of cost reduction and
efficiency.
BLOCKCHAIN-BASED IoT APPLICATION
This section presents some of the crucial challenges and the related application
solutions of deploying blockchain technology, which designs for devices with
permanent storage capability and computing capability on the minimal resources of
IoT hardware. Some significant integration challenges can be found in the previous
research (Reyna et al., 2018).
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Supply Chain Information System for Sustainability and Interoperability of Business Service
BLOCKCHAIN AND IoT INTEGRATION CHALLENGES
Scalability: The blockchain size widens with an increasing number of connected
devices because it needs to store and validate all the transactional information. This
is a significant integration disadvantage as IoT networks are expected to contain
many nodes that can generate big data in real time.
Security: The increasing number of security-related attacks on IoT networks
and their ultimate impacts make securing IoT devices with blockchain technology
essential. This integration characteristic may create a severe problem when IoT-based
applications do not operate appropriately, and corrupted data arrives and remains
in the blockchain. As a result, IoT devices need to be tested before their integration
with blockchain because of the undetectable nature of this problem (Roman et al.,
2013). Unfortunately, they are often hacked since their constraints limit the firmware
updates, stopping them from actuating possible bugs or security breaches. Besides,
updating devices one by one is challenging, as required in global IoT deployments in
the production industry. Hence, run-time up-grading and reconfiguration mechanisms
are needed in IoT devices to keep running over time (Reyna et al., 2018).
Anonymity and data privacy: Privacy is an essential concern in IoT applications.
Massive amounts of privacy-sensitive data can be generated, processed, and transferred
between device applications. Blockchain technology presents an ideal solution to
address identity management in IoT to protect the person’s identity when sending
personal data that protects user data privacy instead of identities. User anonymity can
be revealed by examining the address of the transaction advertised to every participant
(He et al., 2018). The IoT devices secured data storage, and authorization of access
is a significant challenge since accomplishing it requires integrating cryptographic
security solutions into the device, considering limited resources.
Resource utilization and consensus: Trusted authority in centralized architectures
make sure consensus integrity, while in the decentralized environment, nodes of the
blockchain network need to reach consensus by voting, which is a resource-intensive
process. IoT devices are attributed to relatively low computing capabilities, power
consumption, and wireless bandwidth. For example, blockchains that utilize PoW as
a consensus mechanism need vast computational power and utilities a considerable
amount of energy for the mining process. Computationally complex consensus
algorithms do not apply to IoT scenarios, and limited resources should be allocated
to find a possible agreement. However, PoS is more likely to be used in IoT, but
none of these issues has yet been deployed in IoT as a commercial adoption (Atlam
et al., 2018) (Danzi et al., 2018).
A distributed and decentralized blockchain architecture can reduce the overall cost
of the IoT system compared to centralized architectures. However, a decentralized
blockchain architecture suffers from a new type of resource-wasting, which challenges
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Supply Chain Information System for Sustainability and Interoperability of Business Service
its integration with IoT. Resource requirements depend on the blockchain network
consensus algorithm. Typically, solutions to this problem are to delegate these tasks
to an unconstrained device or another gateway device capable of catering to the
functionality. Otherwise, off-chain solutions are also useable in this situation, and
off-chain moves information outside the blockchain to minimize the high latency
in the blockchain could provide the functionality (Reyna et al., 2018).
Smart contracts: Devices can use smart contract techniques with addresses or
guide them as application reactions to listening events. They provide a dependable
and secure IoT feature, which records and manages their interactions. Working with
smart contracts requires using oracles that consist of specific entities that provide
real-world data in a trusted manner. Smart contracts should consider the heterogeneity
and limitations presented in the IoT. Also, actuation mechanisms directly from smart
contracts would help faster reactions with the IoT (Reyna et al., 2018).
IoT designers should select a solution based on their restrictions and requirements,
the diversity of solutions for blockchain integration with IoT, and the diverse types
of IoT devices and their applications. The following section presents the proposed
IoT, blockchain, and SOC technologies architecture.
PROPOSED ENTERPRISE ARCHITECTURE
This section explains how service-oriented computing (SOC) technology will improve
efficiencies, provide new business opportunities, address regulatory requirements,
and improve transparency and visibility of global production activities. Figure 4
represents the proposed enterprise architecture, which consists of multilayered IoT,
blockchain, and service-oriented computing. The IoT systems allow for capturing real-
time production business process data from the plant-level operational environment.
The enterprise architecture for distributed production (e.g., apparel) supply network
used for the current research is shown in Figure 5. The architecture mainly consists
of three layers: (i) IoT-based service, (ii) blockchain-based data control, and (iii)
data storage and processing part.
IoT-Based Service Layer
The IoT technology development created many opportunities, such as interconnected
and interoperable data collection and exchange devices. The data obtained from IoT
devices can make production more convenient through numerous types of decision-
making at all levels and areas of production business activities.
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Supply Chain Information System for Sustainability and Interoperability of Business Service
Blockchain-Based Data Controlling
The blockchain-based controlling part can potentially improve the IoT technology
used in the production industry. The production industry is part of a complex and
information-intensive supply chain comprising a set of globally connected and
distributed organizations, including other critical infrastructures supporting world
trade, such as transport and international border management.
Production and its supply chain management are regarded as a domain where
blockchains are good fits for distinct reasons. During the product’s lifecycle, as it
flows down the value chain network (from production to consumption), the data
produced in each step can be present as a transaction, making a permanent history of
the item of interest (i.e., product). Among other things, blockchain technology can
effectively contribute to (i) recording every single asset (from product to containers)
as it flows through the production chain nodes, (ii) tracking orders, receipts,
invoices, payments, and any other official documents, and (iii) track digital assets
(e.g., certifications, warranties, licenses, copyrights) in a unified way and parcels
with physical assets, and others. Moreover, through its decentralized nature, the
blockchain can effectively share information regarding the production step, delivery,
Figure 4. Enterprise information system architecture for production (e.g., apparel)
business
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Supply Chain Information System for Sustainability and Interoperability of Business Service
and maintenance schemes of products between suppliers and vendors, bringing new
collaboration opportunities in complex assembly lines.
The challenges in transportation modeling parameters, such as delays in delivery,
loss of documentation, unknown source of products, and errors, can be minimized
and even avoided by blockchain implementation. Integrating the production supply
chain with blockchain benefits are enhanced environmental audit-related issues,
minimized errors and delays, reduced transport costs, faster issue identification,
increased trust (consumer and partner trust), and improved product transport and
inventory management.
Data Management Layer
Industries use different blockchain platforms, and different data models are used on
the platforms (e.g., Ethereum (Ethereum, 2021) adopted a key-value data model,
while a few of them, like R3 Corda (Corda, 2021), use a relational data model).
This characteristic emphasizes that no single blockchain platform is suitable for
diverse types of data used in a wide range of product supply chain applications. For
example, geolocation data recorded from supply chain transport vehicles may not be
efficiently queried using a key-value store. Also, even though blockchain platforms
such as Hyperledger Fabric (Hyperledger, 2021) use a pluggable storage model,
service users must decide at development time which storage to use (e.g., either Level
DB (Kim, 2016), or key-value store using CouchDB (CoucDB, 2021) (document
store). Thus, special techniques are required for supporting multiple types of data
stores such as key-value, document, SQL, and spatial data stores simultaneously in
the same blockchain system. In the proposed architecture, a generic graph database
model has been used.
FUTURE RESEARCH DIRECTIONS
Blockchain technology with the Internet of Things applications is getting importance
in production industry automation. Besides, data privacy issues remain a fundamental
challenge for regulatory bodies. The European General Data Protection Regulation
(GDPR) lays the foundation for users to control their data and information about
any devices involved in collecting and processing this data. The main objective is
to provide individual entities must have the authoritative power and control over
their data assets and to be able to transfer their data without any unmitigated risk.
Blockchains give the advantages of distributed ledgers that can securely manage
digital transactions, where data centralization is unnecessary. In the future, this
research will take the initiative of how blockchain technology can be used to develop
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an audit trail of data generated in IoT devices, providing GDPR rules to be verified
on such a trail. This mechanism will help translate such rules into smart contracts
to protect personal data transparently and automatically.
CONCLUSION
Supply chains are extraordinarily complex organisms, and no business organization
has yet succeeded in building one that is truly digital. Indeed, many regular operations
are automated using modern information and communication technologies; but many
of the applications required are not yet widely used. However, the trend of business
process automation using modern evolving technology will change radically over
the coming years, with different industries implementing distributed supply chains
at varying speeds. Enterprises that get there first will gain a difficult-to-challenge
advantage in the race to Industry 5.0 and can set, or at least influence, technical
standards for their particular industry. The advantage will come by no means to
stop for significant efficiencies. The main objective will be the different business
models and revenue streams the digital supply chain will open up.
This chapter presents a hybrid enterprise information systems architecture of IoT
applications and a blockchain-based distributed ledger to support transaction services
within a multi-party global production business network. The IoT is an intelligent
global network of connected objects, which through unique address schemes, can
help to collaborate with other business partners to achieve common objectives. The
data obtained from the IoT applications along production business processes can
make operational decision-making much more accessible. However, standalone IoT
application systems face security and privacy-related problems. Finally, the chapter
presents a research proposal outlining how blockchain technology can impact the IoT
system’s essential aspects of GDPR-related issues and thus provide the foundation
for future research challenges.
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KEY TERMS AND DEFINITIONS
Block: A block is a data structure used to communicate incremental changes to
the local state of a node. It consists of a list of transactions, a reference to a previous
block and a nonce.
Blockchain: In simple, a blockchain is just a data structure that can be shared
by different users using computing data communication network (e.g., peer-to-peer
or P2P). Blockchain is a distributed data structure comprising a chain of blocks. It
can act as a global ledger that maintains records of all transactions on a blockchain
network. The transactions are time-stamped and bundled into blocks where each
block is identified by its cryptographic hash.
Cryptography: Blockchain’s transactions achieve validity, trust, and finality
based on cryptographic proofs and underlying mathematical computations between
various trading partners.
Decentralized Computing Infrastructure: These computing infrastructures
feature computing nodes that can make independent processing and computational
decisions irrespective of what other peer computing nodes may decide.
Immutability: This term refers to the fact that blockchain transactions cannot
be deleted or altered.
Internet of Things (IoT): The Internet of Things (IoT), also called the Internet
of Everything or the Industrial Internet, is now a technology paradigm envisioned
as a global network of machines and devices capable of interacting with each other.
The IoT is recognized as one of the most critical areas of future technology and is
gaining vast attention from a wide range of industries.
Provenance: In a blockchain ledger, provenance is a way to trace the origin of
every transaction such that there is no dispute about the origin and sequence of the
transactions in the ledger.
Supply Chain Management: A supply chain consists of a network of key business
processes and facilities, involving end-users and suppliers that provide products,
services, and information. In this chain management, improving the efficiency
of the overall chain is an influential factor; and it needs at least four important
strategic issues to be considered: supply chain network design, capacity planning,
risk assessment and management, and performances monitoring and measurement.
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Warehouse: A warehouse can also be called a storage area, and it is a commercial
building where raw materials or goods are stored by suppliers, exporters, manufacturers,
or wholesalers, they are constructed and equipped with tools according to special
standards depending on the purpose of their use.
Copyright © 2024, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited.
Chapter 5
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DOI: 10.4018/979-8-3693-0159-3.ch005
ABSTRACT
Recent Semantic Web Technology developments indicate possible advancements in
supply chain management. In particular, the innovative business process automation
based on SWT attracted much interest from the logistics, manufacturing, packing,
and transportation industries. This technology combines a set of new mechanisms
with grounded knowledge representation techniques to address the needs of formal
information modelling and reasoning for web-based services. This chapter provides
a high-level summary of SWT to help better understand this technology’s impact on
broader enterprise information architectures. In many cases, it also reuses familiar
concepts with a new twist. For example, “ontologies” for “data dictionaries” and
“semantic model” for “data model.This chapter presents the usefulness of a proposed
architecture by applying theory to integrating data from multiple heterogeneous
sources, which entails dealing with semantic mapping between source schema and
Resource Description Framework (RDF) ontology, which are described declaratively
using a specific query language (i.e., SPARQL) queries. Finally, the semantics of
query rewriting are further discussed, and a query rewriting algorithm is presented.
Supply Chain Information
System for Sustainability
and Interoperability of
Business Service
Kamalendu Pal
https://orcid.org/0000-0001-7158-6481
University of London, UK
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Supply Chain Information System for Sustainability and Interoperability of Business Service
INTRODUCTION
Today’s supply chain business appreciates the value and consequence of building
an effective supply chain as part of enterprise proliferation and profitability.
There exist different types of industry-specific supply chains (e.g., automotive,
pharmaceutical, apparel, agriculture). In simple, the supply chain is a system with
organization, people, technology, activity, information, and resources to deliver a
product or service from suppliers to customers. Supply chain activity transforms
natural resources, raw materials, and components into final products, and delivers
them to customers. A network comprises the enterprises and enterprise departments
involved in this process. The most important requirements of supply chain operation
are minimizing the inventory and creating seamless material and information flow;
effective communication must exist among the market, sale, purchase, supply chain
plan, and control, appropriate customer delivery service, after-sales service, and
so on. Therefore, a supply chain is a network of facilities and distribution options
that performs material procurement functions, transforming these materials into
intermediate and finished products and distributing these finished products to
customers (Pal, 2017). Supply Chain Management (SCM) aims to improve logistical
resource allocation, management, and control. In this way, supply chain SCM is a
set of synchronized activities for integrating suppliers, manufacturers, transporters,
and efficient customer service so that the right product or service is delivered in
the right quantities, at the right time, to the right places. The ultimate objective of
SCM is to achieve sustainable competitive advantage (Pal, 2019).
The first signs of SCM were perceptible in Toyota Motor Supply chain’s Just-In-
Time (JIT) procurement system. Particularly, JIT was used to control suppliers to
the factory just in the right quantities, to the right location, and at the right time, in
order to optimize system-wide costs and customer affordability. The main goal was
to reduce inventory level drastically, and to regulate the suppliers’ interaction with
the production line more effectively. It consisted of two distinct flows through the
supply chain organizations: material and information. The scope of the supply chain
begins with the source of supply and ends at the point of consumption. It extends
much further than simply a concern with the physical movement of materials. Equal
emphasis is given to supplier management, purchasing, inventory-management,
supply chain management, facilities planning, customer service, information flow,
transport and physical distribution. Some of the important business processes, along
supply chain, are shown in Figure 1.
The ultimate objective with the implementation of SCM, suppliers and customers
are viewed as partners and their relationship becomes a cooperative one as enterprises
in the supply chain recognize that coordination among partners within the supply
chain is a key factor of success. In order to operate a supply chain efficiently in a
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cooperative manner, all related functions across the supply chain must operate in an
integrated way the various partners within the supply chain must be efficient with
respect to service provisions. This balances Constraint Satisfaction Problem (CSP)
with appropriate customer service, minimum inventory holding cost and optimal
unit cost. In this complex CSP environment, the design and operation of an effective
supply chain is of fundamental importance for global supply chain business.
It is worth noting that purchasing process does not finish when the customer
places an order using an existing sales channel. Customer queries, before or after
order placement, are inevitable. At the same time, the seller might want to contact
customers with purchase confirmation and shipping information. Customer service
encompasses all points of contact between the seller and the customer and is an
important output of SCM. It results from the accumulated value of all business
processes along the supply chain. These business processes are responsible for
offering an acceptable level of customer service. Moreover, these business processes
are also interdependent, if one business function fails to provide the expected level
of customer service the chain is disrupted, and the scheduled workload in other areas
is destabilized thereby jeopardizing customer satisfaction (Pal, 2018) (Pal, 2019).
To provide better quality of customer service at no additional cost or workload, all
business processes along the supply chain must be balanced. This requires trade-offs
throughout the supply chain. It is essential to think in terms of a single interconnected
Figure 1. Diagrammatic representation of supply chain business process
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Supply Chain Information System for Sustainability and Interoperability of Business Service
chain rather than narrow functional business processes when considering effective
trade-offs. Seamless integration along the supply chain is challenged when there
is a conflict between a company’s functional behaviours and objectives, as is often
the case. For example, suppliers typically want manufacturers to purchasing in bulk
quantities, in stable volumes, and with flexible delivery dates. However, although most
manufacturers desire long production shifts, they need to flexible to their customers’
requirements and fluctuating market demands. Thus, the suppliers’ objectives are
in direct conflict with the manufacturers’ wish for flexibility. Indeed, since supply
chain decisions are typically made without accurate information about customer
demand, the ability of manufacturers to match supply and demand depends largely
on their ability to change supply volume as information about demand arrives. In
the same way, the manufacturers’ goal of making bulk production batches typically
conflicts with the objects of both distribution and warehouse facilities layout to
reduce material inventory. To make the situation worse, this latter goal of reducing
inventory typically implies an extra cost in transportation and distribution.
System fluctuations over time are also critical criteria that need to be considered.
Even when the requisition is accurately known because of prior contractual agreements,
say strategic decisions need to take demand and cost variations due to changes in
market trends, market and sales logistics, competitive movement and the like. These
time-varying demand and cost criteria make it more complex to figure out the most
appropriate supply chain strategy the one that optimizes system-wide management
costs and complies with customer needs. Global optimization indicates that it is not
only essential to optimize across supply chain resources, but also across business
activities connected with the supply chain.
Managing a supply chain involves numerous decisions about the flow of
information, product, funds, and coordination. Supply chain management (SCM)
has been instrumental in connecting and smoothing business activities as well
as forming various kinds of business relationships e.g. Customer Relationship
Management (CRM), Supplier Relationship Management (SRM), among supply
chain stakeholders. In this way, SCM is an integrative mechanism to manage the
total flow of a distribution channel from supplier level to production, distribution
and then ultimately to the end customer. The aim is to achieve goals related to total
system performance rather than optimization of a single phase in a logistics chain.
The aim of SCM is to enhance productivity by reducing total inventory level and
cycle time for orders. It is essential for supply chain business-partners to create a
network that is agile and able to respond rapidly to unpredictable changes in demand.
To achieve cooperation among business partners is very essential.
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SCM systems utilize modern Information and Communication Technologies (ICT)
to acquire, interpret, retain, and distribute information. The software applications
of SCM are ready-made packages, usually targeting a particular set of tasks, e.g.,
tracking product-related information during the transportation process. These ready-
made package-software applications are mass-customized products that ignore the
specific requirements of a certain business sector, and so they are quite problematic.
The problem of the appropriate IT solutions for supporting collaboration between
supply chain business-partners is not new and it has been approached with several
standards and protocols implemented in numerous enterprise information systems.
The application like ERP (Enterprise Resource Planning), CRM (Customer
Relationship Management), and WMS (Warehouse Management System) contains
valuable data that can be utilized by the decision support systems (DSS). Moreover,
the digital transformation of business and society presents enormous growth
opportunities offered by technologies such as the Internet of Things (IoT), Big
Data, advanced supply chain, blockchain technologies, and artificial intelligence.
This digital transformation is characterized by a fusion of advanced technologies
and the integration of physical and digital systems, the predominance of innovative
business models and new processes, and the creation of smart products and services
(Baumgaertel, Ehm & Kasprzik, 2018). However, information integration problems
Figure 2. Heterogeneous data sources in a global supply chain
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often exist. Specifically, this problem is often attributed to heterogeneous hardware,
different data formats, and pressure to improve a system’s performance, as shown
in Figure 2. The problem with information interchange is related to issues of data
exchange between business-partners operating independently designed information
systems. From a logistics point of view the issues in supply chain visibility (SCV)
is the ability of parts, components or products in transit to be tracked from the
manufacturer to their destination and traced from the customer to the manufacturer.
The aim of enhancing SCV is to improve the traceability of business process
actions and reactions along the global supply chain. Innovative SCV technology
promotes near real-time response to global supply chain business environments; and it
improves operational performance of many high-tech industries (e.g. pharmaceutical,
automotive, apparel). The objective of such data collection and analysis in the
supply chain is to provide greater visibility of business operations. In other words,
this greater visibility can be interpreted as “the ability of supply chain mangers to
know exactly where things are at any point in time, or where they have been, and
why”. Collection of this data is not enough; the enterprises need new software tools,
business process management practices, and properly trained personnel to interpret
the hidden contextual meaning in the data.
In addition, the important challenges in supporting huge heterogeneous data
integration in global supply networks are: (i) increasing number of business alliance
partners due to globalization of business processes, (ii) different business practice and
infrastructure facilities within participating business-partners, and (iii) differences
in data exchange formats and standards among business-partners. Moreover, data
capture and transmission mechanisms (e.g. bar coding, radio frequency identification
technique, electronic data interchange, wireless networking infrastructure and
protocols, global positioning system’s capability) produce huge amounts of supply
chain transportation data that, if properly controlled and shared, can enhance
performance and agility of global supply chain networks. To harness this value-
added service of data to global enterprises, a single representation data format is
very essential. The global standardization organizations (e.g. Global Standardization
1 – GS1) provides a partial solution to the problem of heterogeneous data formats.
These organizations have defined a detailed Global Product Classification system
(GPC) that can be used to identify products that match criteria. The example of a
standard, which reasonably facilitates information exchange in SCV is the Global
Trade Item Number (GTIN). There are also other operational standards (e.g. Global
Data Synchronization Network) available for improving trading partnerships.
However, this unique codification of products (e.g. GETIN) are not enough for
transferring knowledge from the producer all the way to the ultimate customer. The
main issue of providing detailed information on the product and its history (such
as when, where and by whom it was produced, packaged, and transported) can be
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crucial to supply chain operational management. However, integrating data from
multiple heterogeneous sources requires dealing with different data models, schemas,
and query languages. The semantic web has provided several new methods for data
integration. This chapter provides an integration of relational database and XML
data with the help of ontology.
Section 2 of the chapter outlines the background of data integration problem.
Section 3 describes the structure of a data integration framework. Section 4 presents
different concepts of semantic mapping; it includes an RDF graph model, relational
data model, and XML data model. In addition, some principles for semantic mapping
between data source schemas and ontology have been introduced. After this, an
algorithmic semantic query rewriting and optimization techniques are discussed.
Section 6 concludes the chapter with summary remarks.
BACKGROUND OF DATA INTEGRATION PROBLEM
In today’s digital age, data is the supply chain operation’s lifeblood. Whether
recruiting new staffs in London or New York, gaining new customers, or closing the
accounting books at the end of every day, data keeps everything running smoothly.
It enables business organizations to innovate, make smart and timely decisions, and
maintain a quality level of supply chain operational service. To provide a certain
level of operational service, business needs to capture data, clean them if it is
appropriate, integrate different business activities data, and process them to make
corporate decisions. Therefore, a database management system is an essential part
of a supply chain’s day-to-day operations.
Modern database management systems are heavily influenced by the relation
database model (Codd, 1970). In this model, a database schema represents the logical
configuration of all or part of a relational database. It can exist both as a visual
representation and a set of operational conditions known as integrity constraints that
govern a database. These constraints are expressed in a data definition language,
such as SQL (Structured Query Language). As part of a central repository all the
data and metadata, a database schema keeps track of the classes of objects (or
entities) that make up the database, including tables or relations, different views,
stored procedures, and more.
Typically, a database schema conveys – the logical constraints that apply to the
stored data in the database. The mechanism of creating a database schema is called
data modelling. When following the three-schema approach to database design, this
step would follow the certain of a conceptual schema. Conceptual schemas focus
on an organization’s information. There are two main kinds of database schema:
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A logical database schema conveys the logical constraints that apply to the stored
data. It may define integrity constraints, views, and tables.
A physical database schema lays out how data is stored physically on a storage
system in terms of files and indices.
At the most basic level, a database schema indicates which tables or relations
make-up the database, as well as the attributes including on each table. Thus, database
schema is an essential part of heterogenous information system.
Database technology was introduced in business communities since the late 1960s
to support (initially rather simple using third generation procedural programming
languages - e.g. COBOL (Common Business Oriented Language) and RPG (Report
Program Generator)) business information providing applications. The software
of the day provided a file-oriented record processing’ model. Typical programs
sequentially read several input files and produced new files as output. COBOL
and several other programming languages were designed to make it easy to define
these record-oriented sequential tasks. As the number of business applications
and data repositories rapidly grew, the need for integrated data became apparent.
Consequently, first integration approaches in the form of multi-database systems
(Hurson& Bright, 1991) were designed around 1980s e.g. MULTIBASE (Landers
& Rosenberg, 1982). This was a first exemplar in a notable history of research in
data integration. The development continued over mediators (e.g., Garlic (Carey et
al., 1995)) and agent systems (e.g., InfoSleuth (Bayardo et al., 1997)), to ontology-
based (e.g., OBSERVER (Mena et al., 1996)), peer-to-peer (P2P) (e.g., Piazza
(Halevy et al., 2003)), and web service-based integration approaches (e.g., Active
XML (Abiteboul et al., 2002); SWSDF (Pal, 2017)).
In many supply chain business applications, the number of data providers and
amount of available data is increasing. Heterogenous data integration is now a very
commonly used notion in supply chain operation management research. However, it
appears that the problem of data integration resided initially in the lack of formalisms
for representing data, and subsequently in the lack of standardization in the use of
data formalism representing the same datasets. This latter case is known as logical
heterogeneity (Hull, 1997) or semantic heterogeneity (Ceri & Widom, 1993) and
stems from the fact that the same information resided in multiple overlapping data
storages represented with different formats or different instance values.
Structured datasets from supply chain business customers can be used to explore
some of the research issues in data heterogeneity. General concepts like name
and surname may be represented by two attributes by some information system
developers. Others may represent them in one unique attribute Name + Surname.
The two cases highlight how even a simple and well understood concept can result in
different representations. It is worth noting that the conceptual, logical and physical
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representation of data and related information is obtained after the requirements
and specifications pass through users, business analysts, data specialists, systems
developers and other software project workers, each having their level of knowledge
and preference for data representation. In this way, different representations are
possible for the same conceptual pieces of data; and all of them could be accurate
and complete. This highlights the standardization problem in data representation.
In this way, there is a spectrum of approaches for resolving the problems arising
from semantic heterogeneity. One key method is to standardize databases and data
representations through the development of a global data model. Many practitioners
and academics have provided detailed discussions on various aspects of semantic
heterogeneity (Kim et al., 1993; Hammer & McLeod, 1993; Batini et al., 1986;
Kim &Seo, 1991) for database systems. Most of these discussions highlight one
crucial point that the types of heterogeneity between data sources to be integrated is
a first step in developing an integration solution. Many other issues were identified
e.g., (i) getting an integrated view of overlapping data sets; (ii) identification and
specification of the relationship between replicated data; and (iii) keeping replicated
data ‘synchronized.
Given that the schemas and instances of data sources to be integrated are usually
different, any integration system must also handle instance inconsistency. This is
generally achieved using two components: wrapper (Wiederhold, 1992) and mediator
(Ullman, 1997). A wrapper is a tool that can access a local data source, and then
extract and translate data from the local schema to an external global schema. An
integration system is usually composed by two or more wrappers. They feed data
to a mediator that reconciles and presents the local data to the final user, or to other
systems as a unified view. The unified view is the only point of access for the final
users who see the unified view independent of the integrated sources. This provides
simplicity to the end user who can better focus on integration and manipulation of
the repositories, rather than on the integration process.
The relation between the global schema and local schemas is characterized
mainly by two types of approaches: Local As View (LAV) or Global As View
(GAV) (Lenzerini, 2002). The first asserts that each local schema is a view over the
global schema and can be used whenever there is a global reference model for the
local repositories. The second considers the global schema as a view over the local
schemas (Halevy, 2001). The global schema is obtained by analyzing, mapping and
synthesizing the local schemas into a unique reference model that can simultaneously
express the concepts of each independent data source, and offer users a transparent,
unified overview.
A Global-Local As View (GLAV) approach (Friedman, Levy, & Millstein, 1999)
has also been proposed to combine the advantages of the previous approaches.
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Without analyzing the approaches further, it must be said that the type of approach
changes the semantics of the querying and integration processes.
One other important aspect of data integration is the architecture of the integration
framework. Simplifying the numerous types of proposed architectures, one may
conclude that the most frequently adopted solution for data integration is a central
integration repository, federation approaches, and data exchange scenarios for
distributed networks.
In the first case, a global point of reference is considered for integrating data from
various sources (Beneventano et al., 2000; Chawathe et al., 1994; Carey et al., 1995;
Roth et al., 1996), either through a materialized view, or through a mediator that
accesses the individual data sources and extracts it from subsequent reconciliation and
integration. A federation approach is like the first case but is focused on maintaining
the physical division of the data sources. In distributed networks (think data sources
in peer-to-peer networks) data is exchanged between single data sources (Arenas et
al., 2013; Fagin et al., 2005b).
One of the main differences between building a central integration repository
and data exchange is that, in the first case a single point of access is offered to the
user who can seamlessly access the combined data sources through the interface
(known as global schema architecture). In the second case, data is exchanged directly
between two points of interest through a series of mappings and translation rules
that convert data from the source schema to the target schema for critical discussion
(Fagin et al., 2005a; Fagin et al., 2005b).
The different kinds of integration architecture radically change the semantics of
the integration process. Without extending the discussion to the rigors of critical
analysis, it must be emphasized that the main advantage of a mediator architecture
is the unified global view through which the users have the possibility of accessing
all data sources contemporaneously with a single query. The main disadvantage
is the complexity required to analyze and synthesize a global scheme, as in real-
life cases data integration systems need to combine a multitude of sources. Such
systems rely on wrappers that can interface the mediator to each local source for
rewriting the global query into a local query that is compatible to the schema of the
local source and converting the result to the schema required by the mediator. The
process introduces an overhead in accessing the data sources, both when rewriting
the global query, as well as when translating and integrating data from all the data
sources into a unified answer.
In this way, the reason for integration is twofold: First, given a set of existing
information systems, an integrated view can be created to facilitate information
access and reuse through a single information access point. Second, given a certain
information need, data from different complementing information systems is combined
to gain a more comprehensive basis to satisfy the need (Ziegler & Dittrich, 2007).
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The other issue of heterogeneous data integration is data cleaning, also known
as data cleansing or scrubbing, deals with detecting and removing errors and
inconsistencies from data to improve the quality of data. These problems are present
in single data collections, such as files and databases, and it can be due to misspellings
during data entry, missing information or other invalid data. When multiple data
sources need to be integrated, for example, in data warehouses, federated database
systems or global web-based information systems, the need for data cleaning increases
significantly. This is because the sources often contain redundant data in different
representations. To provide access to accurate and consistent data, consolidation
of different data representations and elimination of duplicate information become
necessary. Data warehouses (Chaudhuri &Dayal, 1997) (Jarke et al., 2000) require and
provide extensive support for data cleaning. They load and continuously refresh huge
amounts of data from a variety of sources so the probability that some of the sources
contain “dirty datais high. Furthermore, data warehouses are used for decision
making, so that the correctness of their data is vital to avoid wrong conclusions.
In the database design, semantics can be considered as end-user’s interpretation of
data and schema items according to their conceptualization of the worlds in a problem.
In heterogeneous data integration, the type of semantics discussed is almost always
real-world semantics that are involved with the mapping of entities in the model
or computational world onto the real world; and it concern human interpretation
of purpose and use of data and information. In this context, semantic integration
is the activity of grouping, combing or completing data from various sources by
considering explicit and precise data semantics to avoid that semantically incompatible
data is structurally merged. That is, semantic integration must ensure that only data
related to the same or very closely similar real-world object or concept is merged. A
preconditionfor this is to resolve semantic ambiguity regardingintegratable data by
explicit metadata to find-out all relevant implications assumptions and underlying
context information.
In one way to resolve semantic heterogeneity in the supply chain database research
is to exhaustively specify the intended real-world semantics of all data and schema
elements. However, it is impossible to completely define what a data or schema
element denotes or means in the database world (Shethet al., 1993). Therefore,
database schemas do typically not provide enough explicit semantics to interpret data
always consistently and unambiguously (Sheth& Larson, 1990). These difficulties
are further worsened by the fact that semantics may be embodied in data models,
conceptual schemas, application programs, the data itself, and the minds of users.
Moreover, there are no absolute semantics that are valid for all potential users;
semantics are relatives ((Garcia-Solaco et al., 1996). These problems regarding
semantics are triggering many heterogeneous data integration importantresearch
challenges.
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An important step during database integration is to determine relations between
schema elements from different local databases. Finding meaningful relations is in
turn based on a sound understanding of the meaning of the schema elements, that
is, their semantics. To that end, one can rely on formal ontologies (Gruber, 1993)
available for local schemas. In simple, ontology can be defined as explicit, formal
descriptions of concepts and their relationships that exist in a certain universe
of discourse, together with a shared vocabulary to refer to these concepts can
contribute to solve the problems of semantic heterogeneity. Compared with other
classification schemes, such as taxonomies, thesauri, or keywords, ontologies allow
more complete and more precise domain models (Huhns& Singh, 1997). With respect
to an ontology a user group commits to, the semantics of data provided by data
sources for integration can be made explicit. Based on this shared understanding,
the danger of semantic heterogeneity can be reduced. For instance, ontologies can be
applied in the application of the Semantic Web to explicitly connected information
from web documents to its definition and context in machine-processable form;
therefore, semantic services, such as semantic document retrieval, can be provided.
In database research, single domain models and ontologies were first applied
to overcome semantic heterogeneity. AS in SIM (Abiteboul&Polyzotis, 2007), a
domain model is used as a single ontology to which the contents of data sources
are mapped. Thus, queries expressed in terms of the global ontology can be asked.
In general, single-ontology approaches are useful for integration problem where
all information sources to be integrated provide nearly the same view on a domain
(Wache et al., 2001). In case the domain views of the sources differ, finding a common
view becomes difficult. To overcome this problem, multi-ontology approaches (e.g.
OBSERVER (Mena et al., 1996)) describes each data source with its own ontology;
then, these local ontologies must be mapped, either to a global ontology or between
each other, to establish a collective understanding. This concept is changing the state
of art of heterogenous database integration, in real-world applications.
DATA INTEGRATION FRAMEWORK
The proposed data integration framework is shown in Figure 3. The framework
consists of four distinct components: application layer, mediating layer, wrapper
layer, and heterogeneous data source layer.The application layer communicates with
end-users; mediating layer contains a mediator which allows integration; wrapper
layer contains software-based wrappers for each data resource; and source layer
contains a set of heterogeneous data sources. The data integration system has a set
of source descriptions that specify the semantic mapping between the mediated
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schema and the source schemas. It uses these source descriptions to reformulate a
user query into a query over the source schemas.
Query Processor: A database system needs to respond to requests for information
from the end-user; and the dedicated software component which deals with the
user-request to produce the required output is simply known as query processor.
A database query is the vehicle for instructing a database management system
(DBMS) to update or retrieve specific data to/from the physically stored medium.
The actual updating, and retrieval of data is performed through various “low-level
operations. Examples of such operations for a relational DBMS can be relational
algebra operations (e.g. select, project, join, and so on). How a DBMS processes
queries, and the methods it uses to optimize their performance, are topics that will
be covered in the later part of this chapter in the context of semantic data storage
and querying facilities. There are three phases that a query passes through during
the DBMS’ processing of that query: parsing and translation, optimization, and
evaluation.
Most queries submitted to a DBMS are in a high-level language such as SQL.
During the parsing and translation stage, the human readable form of the query is
translated into forms usable by the DBMS. These can be in the forms of a relational
algebra expression, query tree, and query graph (Beg & Connelly, 2017).
The system in discussion parses, translates, rewrites and dispatches the user
query to related data sources. When users pose their queries expressed in SPARQL
(Ducharme, 2013) using terms from mediated schema, the parser analyzes the query,
verifying if it is in accordance with SPARQL system. Rewrite implements the query
rewriting work with reference to source descriptions.
Mediated Schema: In the present framework, the mediated schema has two roles:
(i) it facilitates the end-user access to the data with a uniform query interface to
serve the formulation of a query on all sources; (ii) it provides a shared vocabulary
set for wrappers (i.e. a software system working with a data source responsible for
querying, processing the results and mapping them in the global schema according to
the metadata from the data dictionary) to describe the content in every data sources.
The mediated schema is expressed using RDFS (Resource Description Framework
Schema). Moreover, ontology has been used in the mediated schema.
Semantic Module: The queries are posed in terms of the mediated schema.
To answer a query, the rewriter needs descriptions that relate the content of each
data source to the classes, attributes and relations in the mediated schema. Each
data source is described by one or more SPARQL queries. These semantically rich
descriptions help the rewriter to form queries and direct the query dispatcher to
distribute queries to specific data sources.
Wrapper Layer: Initial work on data integration predates the recent efforts to
standardize data exchanges. Thus, every data source might have its own format for
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presenting data (e.g. object database connectivity from relational databases, HTML
from web servers, binary data from an object-oriented database). As a result, one
of the major issues was the “wrapper creation problem”.
In the present framework, the wrapper module provides an SPARQL view
representing a data source, and a means to access and to query the data source. It
translates the incoming queries into source-specific queries executable by the query
processor of the corresponding sources.
Data Storage Layer: The data storage layer, in this framework, is a conglomeration
of pre-existing, heterogeneous, autonomous data sources.
Semantic Mapping
Everything on the web can be expressed in terms of object or resource: a webpage, a
profile, person’s name, a piece of content like raw material price, global trade item
number (GTIN), and so on. In semantic web, each of these resources can be described
using standard framework called resource description framework (RDF). One can
think semantic web as a stack of different technologies, from the simplest to most
powerful and expressive; RDF is in the medium level, just above XML and XML
schemas (Lassila& Swick, 1998) as shown in Figure 4. RDF is a language for creating
data model for expressing statements about objects and their relations. Statements
Figure 3. Diagrammatic representation of the proposed framework
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are defined by triples that are composed of subject, predicate and values. Triples
are used to store data and make it easier for machines to process and understand
the data. Subject refers to a resource; predicate denotes the relationship between
the subject and the object, where object is the value (Antoniou &Harmelen, 2004).
However, only describing resources is not enough; the relationship between
resources and types of relations are important to make sense. Both syntax (structure)
and semantics (meanings) need to be considered. RDF is represented in XML form.
The RDF model consists of three things: resource, property and statements, as
shown in Figure 5. Each resource has properties and resource represented by a class
or a type. Like a website, URL represents a document of class (webpage) and has
properties like created date, creator, language of the page, type of content, and so
on. The values of the properties represent the current state of the resource. It is like
an object (instance of a class) in object-oriented programming. Figure 7 showsthe
possible representation of resource. This is shown in Figure 6 in XML.
There are various names used in XML document for tags and attributes.
Depending upon the domain, the names can have different meanings. For example,
the tag title’ may represent book name in an XML document that contains book
details. The same tagmay represent name of firm when information about the firms
is stored in XML format. An XML spaces names to avoid element name conflicts.
The primary use of such names in XML documents is to enable identification of
Figure 4. Semantic web layer stack
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logical structures in documents by software modules such as query processors,
stylesheet-driven rendering engines (to convert into HTML), and schema-driven
validators (to conform to structure). Multiple namespaces can be used in the same
XML document.
RDF Schema is a vocabulary description language that extends RDF in order to
include some basic features for defining application specific classes and properties.
It enables definition of sub classes, sub properties and domain and range restrictions
on properties (Antoniou &Harmelen, 2004).
RDF statements show relationships between resources and properties. The RDF
statement has a form called triple: subject-property-object (as shown in Figure 5c). For
example, RDF statement English is the language of web page http://www.abc.co.uk/
intro.htm. In this statement, http://www.abc.co.uk/intro.htmis a resource (subject),
language is the property (predicate) of the resource, whose value is English (object).
The example in Figure 6a represents statements: URL http://www.abc.co.uk/intro.
htm represents a web page; which is created by John Smith; it is created on 4 July
2018; the language of the webpage is English. As in natural language, composite
sentences are possible. A statement itself can be the object for a composite statement.
For example, the statement: web page http://www.abc.co.uk/intro.htm is created by
John Smithwho is a 34 years old teacher. In this example, [John Smith-age-34, John
Smith-Occupation-Teacher] is object/value for property: creator of resource: http://
www.abc.co.uk/intro.htm as shown in Figure 6c.
Figure 5. Generic resource structure
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RDF statement in the form of subject-predicate-object is more general purpose
or represents a meta-model. It just defines the structure in general. To model
meaningfulcomposite statements, RDF schemas are defined. The RDF schema
provides information about the interpretation of the RDF statements and the
relationships with other resources. It can be treated as a template to create similar
kind of statements (Antoniou &Harmelen, 2004).
However, RDF lacks more advanced capabilities in defining the relationships.
For example, it does not provide set cardinality, equality, disjointedness, and so on
(Cure & Blin, 2015). These capabilities emerge in the semantic web world with the
advance of Web Ontology Language by W3C, which is briefly explained below.
Web Ontology Language (OWL)
Due to the limitations of RDF, the semantic web technology needed a more expressive
ontology language through the end of 1990s. There were several proposals for the
new language such as Simple HTML Ontological Extensions (SHOE), the Ontology
Inference Layer (OIL) and DML+OIL (Antoniou &Harmelen, 2004). Moreover,
W3C launched the standard for a Web Ontology Language that is called OWL. W3C
organization expanded the earlier work of OIL and improved the integration of it
with RDF. OWL solves the deficiencies of RDFS by providing additional vocabulary
like relations between classes (e.g. disjointedness), conjunction of classes, property
characteristics (e.g. symmetry), cardinality (e.g. one or more, at most one), and so
on (Cure & Blin, 2015).
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RDF Graph Model
The RDF is a standard for representing knowledge on the web. It is particularly
designed for building the Semantic web and has been widely adopted in database
and data mining communities. The simple model of assertions leads to a network
of information resources, interrelated by properties which establish relationships
between resources and property values. In this way, RDF models a fact as a triple
which consists of a subject (s), a predicate (p), and an object (o). The value of a
statement is captured by URI references. Thus, one can intuitively understand a
collection of information resources and RDF statements depicting them in a graph.
To emphasize this characteristic, the term RDF Graph is defined as a set of RDF
triples; hence, any collection of RDF data is an RDF Graph.
DEFINITION 1 (RDF Terms, Triples, and Variables)
Formally, any RDF dataset is a set of RDF triples. One can consider an RDF
triple <s, p, o> from the RDF triple-set <S, P, O>. Let us assume there are a pair
of wise disjoint infinite sets I, B, and L (IRIs, Blank nodes, literals). A tuple (s, p,
o) is called an RDF triple. In this tuple, s is the subject, p the predicate and o the
Figure 6. Sample resource and schema
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object. We denote the union by T (RDF terms). Assume additionally the existence
of an infinite set V of variables disjoint from the above sets.
DEFINITION 2 (RDF Graph)
An RDF graph is a set of RDF triples. Figure 7 shows a part of RDF ontology. In this
diagram, there is a relation “write” between concepts “Manager” and “Publication”,
indicating the relationship between authors and their works. The relation “belong
to” between “Manager” and “Organization” indicate what organizations manager
belongs to. The relation “man-name” and “man-email” point a manager’s name and
email. The same applies to “pub-title”, “pub-year” and “org-name”.
As RDF databases increase in size to approach tens of thousands of triples,
sophisticated graph matching queries expressible in language like SPARQL
(Prud’hommeaux&Seabornr, 2013) become increasingly important. As more and
more RDF database systems come ‘online’ and as RDF gets emphasized by both
established companies (e.g. Oracle, Hewlett Packard), as well as from a slew of
startups, the need to store and efficiently query massive RDF datasets is becoming
increasingly important. Moreover, large parts of query languages like SPARQL
increasingly require that queries (which may be viewed as graphs) be matched against
databases (which may also be viewed as graphs) – the set of all possible “matches
is returned as the answer. The formal concepts of query graph and subgraph follow.
Figure 7. Part of RDF ontology
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SPARQL Protocol of RDF Query Language (SPARQL)
After the improvements in Semantic Web during the last decade, there was a need
to create a query language to process data that are stored in RDF format, as XML
query language did not satisfy the needs (Antoniou &Harmelen, 2004). Although
there were other query languages before, in 2008 W3C announced the standard for
ontology query language, which is SPARQL (Prud’hommeaux&Seabornr, 2013). It
is a simple query language that resembles SQL and extracts information from RDF
graphs. A query can consist of triple patterns that the RDF graph is composed of,
and conjunctions and disjunctions (Prud’hommeaux&Seabornr, 2013).
Table 1. above is a small example of a SPARQL query, which is supposed to
return all creators and their corresponding dates.
An SPARQL query usually contains a set of triple patterns, much like RDF
triples, except that any of the subject, predicate and object may be a variable, whose
bindings are to be found in the RDF data. This chapter addresses the SPARQL
queries with ‘SELECT/WHERE’ option, where the predicate is always instigated as
an URI (Uniform Resource Identifier). The SELECT clause identifies the variables
to appear in the query results, while the WHERE clause provides triple patterns to
match against the RDF data.
Overview of Query Graph and Subgraph
A network can be modeled as a graph G = {V, E, ∑, ȴ} where V is a set of vertices
and E ⊆ V x V is a set of edges.∑is a vertex label set and ȴ: V → ∑denotes the
vertex labelling function. For each notation, the vertex set of G is denoted as V(G)
and its edge set is denoted as E(G). The size of G is defined as │V(G)│, the size of
its vertex set. Analogously, the graph queries posed upon the network can be modeled
as a graph as well. This chapter focuses on the case of connected, undirected simple
graphs with no weights assigned on edges.
Table 1. SPARQL example
PREFIX archive: <http://www.abc.co.uk/archive>
SELECT ?date ?language ?creator
WHERE
{ ?creator archive:has-created ?date }
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A graph is a subgraph of G, denoted as ⊆ G, if ⊆ V(G), ⊆ E(G), and ∈ . In other
words, one can say that G is a supergraph of and G contains .
DEFINITION 3 (GRAPH QUERY) Given a network G and a query graph Q,
the graph query problem is to find as output all distinct matching of Q in G.
EXAMPLE: Figure 8(a) and Figure 8(b) show a network sample G and a
query graph sample Q, respectively. Here the numeric identifiers have been used
to distinguish different vertices in a graph. A subgraph of G with V( = {8,5,7,9}
coloured in grey is isomorphic to Q and hence return as an answer to the graph
query. It is worth noting that there exists multiple matching of Q in G. For example,
given a triangle graph Q with A, B, C as the label for each vertex, respectively. All
the matchings of Q in G, as shown in Figure 9(a), are {1,2,3}, (6,5,3}, {8,5,7} and
{11,10,7}.
Relational Model
The relational model (Codd, 1970), built on a mathematical basis, provided the
foundation for current relational database systems. A query language is a language
in which a user requests information from the database. One can categorize query
languages as being either procedural or non-procedural (Silberschatz, Korth, &
Sudarshan, 1997). The difference lies in their approach to obtain the result. When
a user wants to obtain a result using a procedural language, they need to instruct the
system to perform a specific sequence of tasks on the database. In a nonprocedural
Figure 8. A network G and a query graph Q
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language, the user only needs to describe the desired information without giving
the system a specific procedure.
Relational algebra is a good example of procedural language, while relational
calculus is representative of non-procedural languages (Silberschatz, Korth, &
Sudarshan, 1997). However, most query languages used in current relational database
systems combine elements of both the procedural and non-procedural approaches. The
relations are stored in a database and the results from a database can be obtained by
using database queries. In the field of relational databases, SQL became a standard
that is now being used worldwide.
The term relation is used here in its accepted mathematical sense. Given sets D1,
D2, …, Dn, R is a relation on these n sets if it is a subset of the cartesian product
D1D2… Dn. R is said to have degree n, often called n-ary. An n-ary relation R can be
represented as a table with n column, which has the following properties: (i) each
row represents an n-tuple of R; (ii) the ordering of rows is immaterial; and (iii) all
rows are distinct.Normally, one column (or combination of columns) of a given
relation has values which uniquely identify each element (n-tuple) of that relation.
Such a column (combination) is called a primary key. A common requirement is
for elements of a relation to cross-reference other elements of the same relation or
elements of a different relation. We shall call a column of relation R a foreign key
if it is not the primary key of R, but its elements are values of the primary key of
some relation, S.
In the later part of this chapter, various concepts will be illustrated with reference
to two example databases. Some of the relations in those databases, are managers and
proceedings. These relations are shown in Table 2 (a) and 2 (b). Each manager and
proceeding are unique; each manager can have zero or more papers in a proceeding.
A manager can write and publish multiple papers.
The Relational Data-Base Management Systems (RDBMS) uses SQL (Standard
Query Language) as the vehicle for instructing its database to update or retrieve specific
data to/from the physically stored storage. The actual updating, and retrieval of data
Table 2. (a) The manager relation, (b) the proceeding relation
Attribute Length Key Attribute Length Key
ManagerID 10 YES ProceedingID 15 YES
Name 30 NO Year 8 NO
ISBN 13 NO
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is performed through various ‘low-level’ operations. Examples of such operations
for a relational DBMS can be relational algebra operations such as project, join,
select, cartesian product, and so on (Silberschatz, Korth, & Sudarshan, 1997). With
this back-ground information, it is worth considering the specific implementation
issues for the proposed framework.
As shown in Figure 9(a), suppose there are two heterogeneous relational databases,
each has several tables containing information about authors and papers.
XML Model
Extensible Markup Language (XML), a W3C recommendation, emerged as a standard
for data representation and interchange among various web-applications, providing a
simple means for more meaningful and understandable representation of web-contents.
An XML document need only be well-formed, i.e., its tags be properly nested, but
need not conform to a document type definition (DTD) or Schema. Hence, it is a
variation of semi-structured data – data which may be varied and not restricted to
any particular-schema. Management of semi-structured data by highly-structured
modelling techniques, such as relational and object-oriented models, not only leads
to a very complicated logical schema, but also demands much effort and frequent
schema modifications, and thus obstructs the use of such approaches in modelling
Figure 9. Two heterogeneous data sources: (a) the relational tables, (b) the XML tree
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XML data.Consequently, development of an appropriate and efficient data model
for XML documents has become an active research area with major current models
based on directed, edge-labeled graphs, and Description Logic.
In addition, some systems offer XML views of non-XML data sources such as
relational databases, allowing XML-based processing of data that are not physically
stored as XML. The basic characteristic of the XML Schema is that it can define
element attributes that can appear in a document, define which elements are child
elements, the order of these elements, and their cardinality. XML Schema provides
the user with ability to define an element or an attribute as a specific scope. The
User can define complex or simple elements (depending on whether they have
further structure on not) and cardinalities for them. Figure 9 (b) shows an XML tree,
which describes the schema of an XML document about papers and their authors.
Mapping Relational Schemas to Ontology
To solve the heterogeneity problem, the meaning of the relational schema must be
well described, which is called “source description”. Before presenting how source
descriptions are defined, it is worth considering how, in general terms, relational
schema can be mapped to RDF ontology.
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As mentioned above, RDF describes resources using a graph model. RDF Schema
(RDFS) provides modelling primitives for defining classes and properties, range and
domain constraints on properties, and subclass and sub-property relations.
The relational schema is based on entity-relationship diagram (ERD). Typically,
each entity is represented as a database table, each attribute of the entity becomes
a column in that table, and relationships between entities are indicated by foreign
keys. Each table typically defines a class of entity, each column one of its attributes.
Each row in the table describes an entity instance, uniquely identified by a primary
key. The table rows collectively describe an entity set.
There are some similarities and differences between RDF and the ER model.
Basically, ERD RDF Graphs have much in common. RDF can be viewed as a
member of the Entity-Relationship model family. Class in RDFs corresponds to
entity in ERD; property is kind of binary relationship; subclass and sub-property are
subsumption relations. Therefore, some principles for semantic mapping between
relational schema and RDF ontology are: (i) primary key of table is mapped to
class, (ii) columns in table are mapped to properties, (iii) column value is mapped
Figure 10. Semantic mapping between relational schemas and ontology
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to property value, (iv) each row key corresponds to an instance, (v) each row is
represented in RDF by a collection of triples with a common subject. As shown
in Figure 10, the semantic mapping between relational schemas and ontology are
marked by arrows with broken line.
Mapping XML Schemas to Ontology
In the present framework, RDF metadata needs to be defined here because RDFS
Class and RDF Property are enough for the specifications of classes and properties.
Considering XML elements, attributes and their relationships, the proposed
architecture proposes some principles below for semantic mapping between XML
schema and RDF ontology: (i) attributesare mapped into properties, (ii) simple-type
elements are mapped into properties, (iii) complex-type elements are mapped into
classes.
As shown in Figure 10, the semantic mappings between XML schemas and
ontology are marked by arrows with solid lines. In this example, attributes (e.g. title,
name, year) are mapped into properties in ontology. And, complex-type elements
(e.g. author, paper) are mapped into RDFS classes.
Source Description
After being mapped to ontology, source schemas must be described so that the query
rewriting algorithm can use them to generate executable query plans efficiently. The
functionality of SPARQL is used here.
Definition 4 (Source description) Given a data source P, its source description Dp
is a tuple (Qp, µ), where Qp is a SPARQL query and µ is a mapping from variables
appeared in Qpto corresponding columns in P.
Table 3. Different SPARQL queries used in the framework
database01.manager database01.proceeding
(
SELECT ?name
WHERE {?X man_name ? name},
{ ?name → Name}
).
(
SELECT ?title, ?year
WHERE {?X pub_title ?title.
?X pub_year ?year},
{?title → Title, ?year → Year}
).
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Each relational table is described by a SPARQL query over domain ontology.
The semantic of the databases are thus explicitly defined, and it is easy to add and
delete sources. Some of the relevant queries are presented in Table 3.
SEMANTIC QUERY REWRITING AND OPTIMIZATION
The problem of query rewriting considers how to reformulate a query from the
mediated schema to the underlying relational database. A survey and analysis of
different algorithms to solve the problem is given in (Pottinger & Halevy, 2001).
In this chapter, an algorithm is used to execute the query rewriting over the RDF
Graph model.
The SPARQ query language is based on matching graph patterns. The Graph
pattern contains triple patterns that are like RDF triples, but with the option of
query variable in place of RDF terms in the subject, predicate or object positions.
Definition 5 (Minimal Connectable Units: MCU):Given a SPARQLquery Q, a
data source P and its source description Dp = (Qp,µ), a MCU m for P is a tuple of the
form (Y, µ) where: Y is a subset of triple patterns in Qp; and µ is a partial mapping
from variables appeared in Qp to corresponding component in P.
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In the current system, as shown in ALOGRITHM01, an algorithm has been used
to find minimal connectable units and joining them. This algorithm consists of two
parts: find and join. It helps to reduce the number of rewritings in the heterogenous
data integration, as shown in Figure 11.
Table 4.
ALGORITHM01
// Find minimal connectable units – FindMCUs //
// Q is a SPARQL query, D is the source description of a data
source P has the form (QP, µ), where. µ is a subset. //
FindMCUs (Q, DP)
Initialize M = Ø;
For each triple pattern t in Q, do
For each triple pattern t’ in QP do
If exist a mapping ӷ that map t to t’, then
Find the minimal subset (denoted by Y) of triple
pattern of QP that is connectable.
Find the subset (denoted by µ) of µ that relative to Y.
M = M U <Y, µ’>;
End for
End for
Return M
// Join minimal connectable units part – JoinMCUs //
// Q is a SPARQL query, M is a set of MCUs, M = {m1, … mn },
where m = (Yi,, µi’), A is a set of rewritings. //
Initialize A = Ø;
For each minimal subset {m1, .. mk}of M such that Y1 U Y2 U Ykcover all triple patterns of Q.
Create the conjunctive rewriting Q’ contain all relative table to {m1, .. mk}
Add Q’ to A
End for
Return A
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It is worth to note that the presented algorithm (i.e. ALGORITHM01) has got
multiple parts that deal with the same triple partners (i.e. {1,4}, {2,5}, {3,6}). There
are eight different ways one can join these partners as shown in left-hand side of
the Figure 11. By using the proposed modification, the number of rewritings can be
drastically reduced. In this example, rewritings are reduced from eight to only one.
CONCLUSION
It is typical that global supply chain businesses run different but coexisting information
systems. Using these information systems, supply chain organizations try to realize
business opportunities in highly competitive markets. In this setting, the integration of
existing information systems is becoming more and more indispensable to dynamically
meet business and customer needs while leveraging long-term investments in
existing information systems infrastructure. For example, in business intelligence
(BI), integrated information can be used for querying and reporting on business
activities, for statistical analysis, online analytical processing (OLAP), and data
mining to enable forecasting, decision making, enterprise-wide planning, and, in the
end, to gain sustainable competitive advantage. For CRM, integrated information
on individual customers, business environment trends, and current sales can be
used to improve customer services. Enterprise information portals preset integrated
company information as personalized web sites and presents single information
Figure 11. Query rewriting optimization
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access points primarily for employees, but also for customers, business partners,
and the public. Moreover, in e-commerce and e-business, integrated information
enables and facilitates business transactions and services.
In addition, within this ambitious and broad aim, this chapter work focused on
two related but independent aspects: semantic integration and query interoperability.
Within the semantic integration problem, this chapter focused on XML-RDF
integration, and the use of ontology. Within the query interoperability problem, the
chapter queried restricted and heterogenous data interfaces with XML technologies.
The main problem highlighted is that integrating data from multiple heterogeneous
sources needs to deal with different data models, database schema, query languages,
and the chapter presents a framework. In this framework, ontology has been used
as the mediated schema to represent data source semantics. It is also describing a
method based on resource description framework graph patterns and query rewriting
techniques.
The proposed solution first analyzes the similarities and differences among RDF
schema, relational model and XML schema. It then discussed how to map relational
schema and XML schema to ontology. A data source describing method based on
SPARQL was defined. Heterogeneous data source schemas were described using
queries defined by SPARQL. Based on an RDF Graph model, the semantic of query
rewriting was defined, and a query rewriting algorithm is presented.
The essence of this research is to highlight semantic web computing application
in industry. The semantic web helps to structure web-based information to make it
more interoperable, machine-readable and thereafter to provide a means to relate
various information concepts more easily and in a reusable way. The semantic web
technology acts as an additional layer on the top of the web and is built around explicit
representations of information concepts and their relationships such as ontologies
and taxonomies. Furthermore, semantic web technologies are not only valuable on
an open environment like the web, but also in closed systems such as in real-world
application settings. Hence, these technologies can be efficiently deployed for domains
including web services, enterprise application integration, knowledge management
and electronic commerce, fulfilling existing gaps in current industrial applications.
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KEY TERMS AND DEFINITIONS
Linked Data: An approach taken to linking data such that it becomes more
useful / accessible than it would be in isolation.
Ontology: Information sharing among supply chain business partners using
information systems is an important enabler for supply chain management. There
are diverse types of data to be shared across supply chain, namely order, inventory,
shipment, and customer service. Consequently, information about these issues
needs to be shared in order to achieve efficiency and effectiveness in supply chain
management. In this way, information-sharing activities require that human and /
or machine agents agree on common and explicit business-related concepts (the
shared conceptualization among hardware / software agents customers, and service
providers) are known as explicit ontologies; and this help to exchange data and derived
knowledge out of the data to achieve collaborative goals of business operations.
Relational Database: Relational database systems support processing of
tuples of relations to generate a single result as a set of tuples. Relational algebra,
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relational calculus and structured query language (SQL) are used to specify queries
on relational databases.
Resource Description Framework (RDF): The RDF is a standard for representing
knowledge on the web. It is primarily designed for building the semantic web and
has been widely adopted in database and datamining communities. RDF models
a fact as a triple which consists of a subject (s), a predicate (p), and an object (o).
SPARQL: The SPARQL query language is a structured language for querying
RDF data in a declarative fashion. Its core function is subgraph pattern matching,
which corresponds to finding all graph homomorphism in the data graph for a
query graph.
SPARQL Query: A SPARQL query usually contains a set of triple patterns,
much like RDF triples, except that any of the subject, predicate and object may be
a variable, whose bindings are to be found in the RDF data.
SQL: Structured Query Language (SQL) a commonly-used language for
querying relational database systems.
Structured Data: Data are stored in accordance with a strict schema for database
management purpose.
Supply Chain Management: A supply chain consists of a network of key business
processes and facilities, involving end users and suppliers that provide products,
services and information. In this chain management, improving the efficiency
of the overall chain is an influential factor; and it needs at least four important
strategic issues to be considered: supply chain network design, capacity planning,
risk assessment and management, and performances monitoring and measurement.
Moreover, the details break down of these issues need to consider in the level of
individual business processes and sub-processes; and the combined performance of
this chain. The coordination of these huge business processes and their performance
improvement are the main objectives of a supply chain management system.
XML: Extensible Markup Language (XML) is a simple, very flexible text format
derived from SGML (Standard Generalized Markup Language). While XML was
originally designed to meet the challenges of large-scale electronic publishing, it
plays an increasingly significant role in the exchange of a wide variety of data on
the web.
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Chapter 6
DOI: 10.4018/979-8-3693-0159-3.ch006
ABSTRACT
The smart supply chain (SSC) attempts to improve the general concept of the supply
chain. The existential philosophy of Industry 5.0 is to develop the previous generation
of the industry. Smart supply chain in the Industry 5.0 can be introduced as the
Supply Chain 5.0 which includes three essential features. This study aims to review
the smart supply chain. For this objective, smart supply chain opportunities (SSCO)
and smart supply chain challenges (SSCC) are analyzed based on Industry 5.0.
This study explains the industrial revolutions from the first one to the fifth one. In
this chapter, SSC and Industry 5.0 are identified and defined briefly. Thus, SSC and
Industry 5.0 are connected meticulously. For precise investigation, the opportunities
and challenges of SSC are explained. As a result, the conceptual framework has been
achieved. Using the Delphi method to reach a consensus of a group of experts to
validate the extracted indicators is necessary for this chapter. Finally, the conceptual
framework demonstrates a smart supply chain based on Industry 5.0.
Opportunities and
Challenges of Smart Supply
Chain in Industry 5.0
Aminmasoud Bakhshi Movahed
Iran University of Science and Technology, Tehran, Iran
Ali Bakhshi Movahed
Iran University of Science and Technology, Tehran, Iran
Hamed Nozari
https://orcid.org/0000-0002-6500-6708
Azad University of the Emirates, Dubai, UAE
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Opportunities and Challenges of Smart Supply Chain in Industry 5.0
1. INTRODUCTION
The main purpose of this section is to identify and analyze the most important
opportunities and challenges of smart supply chains in Industry 5.0. A supply chain
is defined as an intricate logistics system (Schiffling et al., 2022) that consists of
facilities. Another definition of the supply chain is a network between an enterprise
and its suppliers to provide and spread a specific product from the step of origin to
the step of consumption (Li, 2020) involving the smart technologies in the supply
chain (Zhang et al., 2022) leads to smart supply chains (SSCs) in the whole chain.
Nowadays, the fast expansion of technologies such as the Internet of Things (IoT),
Big data (BD), artificial intelligence (AI), and Blockchain has led to the emergence
of SSCs (Li, 2020). The quick and efficient growth of smart technologies such as AI,
Blockchain, cloud computing, and IoT has contributed to the innovation of supply
chains, which appear so-called smart supply chains (Liu & Zhou 2021). Thus, setting
up a smart supply chain includes the adoption of new technologies. Implementing
SSCs is difficult for small industries. Since they have insufficient financial resources
to invest (AlMulhim, 2021); they may have difficult tasks. SSC has a complicated
vision. Precisely, understanding the smart supply chain vision takes time (Wang
et al., 2022) because the concept of SSC is almost new to people. For this reason,
companies use new technologies to understand SSC (He & Xiang, 2021).
Industry 5.0 widely transforms global industries all around the world. It aims to
place the health of humans at the core of manufacturing systems (Leng et al., 2022).
The execution of partial automation within the industry context and production context
marked the beginning of what is usually referred to as Industry 3.0 (Mohamed et al.,
2023). Industry 4.0 is the foundation of Industry 5.0 (Mourtzis et al., 2022). Surely,
this question pops into the reader’s mind what is the difference between Industry
4.0 and Industry 5.0? The center of industry 4.0 is technology, while the center of
industry 5.0 is value (Xu et al., 2021). Despite this, there are some technologies
in Industry 5.0 such as IoT, Cyber-Physical Systems, Big Data Analytics (BDA),
Additive Manufacturing, Digital Twins, and Industrial Robotics (Mohamed et al.,
2023). Furthermore, Fig. 1 explains the improvement journey of industry generations
from 1760 to 2021 which explains the start of industrial revolutions and the subjects
of that. The development trend of industry generations leads to the last generation
which is called the fifth generation of industry.
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Opportunities and Challenges of Smart Supply Chain in Industry 5.0
According to the researchers, creating concepts and values are some of the 2030
megatrends in the whole industrial world. So, industry 5.0 will be an effective player
in the future world of industry. Furthermore, the three prominent specifications of
Industry 5.0 are human-centricity, sustainability, and resiliency (Huang et al., 2022).
Also, Industry 5.0 relies on three basic principles: human-centricity, sustainability,
and resilience (Caravans & Jancelewicz, 2022). So, it can be observed that it is
necessary to know the three leading characteristics of the industry 5.0 and the
definition of each one can be a separate topic. Supply chain 5.0 is a new concept of
industry in the whole world. In addition, Fig. 2 shows the three feathers of industry
5.0 in the following.
Figure 1. The evolution to Industry 5.0
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Opportunities and Challenges of Smart Supply Chain in Industry 5.0
Industry 5.0 emphasizes the comprehensive penetration of AI to attain people-
oriented, developmental sustainability and resilience against risks (Xu et al., 2021;
Yuan et al., 2022). Society 5.0 was obtained from the implementation of Industry
5.0 and by the expansion of Industry 5.0, society 5.0 was created. As a description,
Society 5.0 is human-centered. Also, it can create harmony between economic
development and social responsibility (Kasinathan et al., 2022).
There is a relationship between Industry 5.0 and the supply chain. Industry 5.0
revolution includes a network of connected devices and systems across the supply
chain (Dwivedi et al., 2023) to help intelligent manufacturing based on the specific
needs of customers. Also, SSC and Industry 5.0 are connected. With a quick look
at Industry 5.0, SSC is one of the key success indicators of modern enterprise
organizational performance (Yuan et al., 2022). SSC can decrease cost and time
of delivery, create novel operational strategies, provide stable quality, and extend
flexibility to cope with fast changes in the business environment (Wong and Ngai,
2019; Yuan et al., 2022). Some technologies can help smart supply chains. An SSC
powered by IoT, and AI must have highly accountable and agile calamity management
systems (Nozari et al., 2022) for sure in the new world.
There are some opportunities and challenges in the Smart supply chain. Smart
supply chain opportunities (SSCO) are important in this chapter because they play
Figure 2. Three dimensions of Industry 5.0
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Opportunities and Challenges of Smart Supply Chain in Industry 5.0
a vital role in the efficiency of commodity distribution companies (Liu et al., 2021)
and create a future for people. Identification of smart supply chain challenges (SSCC)
is necessary too. Customer expectations include quality, delivery time, and major
drivers of various changes in SSC management (Thangaiah et al., 2022). Additionally,
supply chain management has moved into a new stage of an SSC (Xin & Xu 2022).
So, this study attempts to first identify the SSCO and SSCC and second analyze them.
There are some smart supply chain opportunities (SSCO) such as improving human
predictions and increasing the analysis accuracy of supply chain managers which the
authors will explain. Increasing the capability of human decision-makers (Kerrigan
et al., 2021) can help to predict human actions. Continuous use of technologies such
as Big Data Analytics (BDA) by business partners for SSC helps companies improve
supply chain capabilities with more accurate predictions about market needs. Supply
chains provided by BDA capabilities convert to business importance to develop a
sustainable and competitive supply chain (Cheng et al., 2022). If the analysis accuracy
of supply chain managers increases, the quality and demand meeting will increase
too (Yuan et al., 2020). By using information extracted from technologies such as
BD and AI, the thinking power of supply chain managers is updated.
Also, there are some other smart supply chain opportunities (SSCO). For example,
Human capital defined as the economic value of human resources connected to
capability, knowledge, ideas, and innovation constitutes the power to establish a
strong social capital (Kimbal et al., 2020). On the other side, there are some smart
supply chain challenges (SSCC) in the world of supply chain including increasing
the complexity of supply chain management, instability from profitable behaviors,
and lack of staff expertise. Enterprises should be eager to manage or mitigate risks
associated with growing supply chain complexity (Chhetri et al., 2022). Also,
retailers must choose the optimal inventory level to engage in profitable behaviors
(Kusuda, 2022). So, retailers and the whole elements of the supply chain must be
aware of profitable behaviors.
Additionally, the false choice of sharing trusted data and information across
the supply chain leads to extreme inventory, administrative costs, and operational
challenges (Princes, 2020). Surely, supply chain failures and challenges affect in
different ways and along different timelines (Pope et al., 2023). Some authors have
affirmed that Industry 5.0 helps to create personalized products, intelligent robots,
and systems through the presence of supply chains (Frederico, 2021). Industry 5.0
applications of smart manufacturing, smart supply chain management, and cloud
management require efficient coordination and synchronization (Taneja et al.,
2023). For achieving this purpose, accurate implementation of Industry 5.0 should
be considered. It needs Everyone’s effort in companies.
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Opportunities and Challenges of Smart Supply Chain in Industry 5.0
2. LITERATURE REVIEW
A new world needs a new concept for updating and progressing. In this situation,
the smart supply chain is explained widely to readers. SSC is used in many different
industries and countries. An extensive statistical analysis of the literature on SSC
reveals the industry’s history, including scholarly work, major concerns, and future
research prospects (Mishra et al., 2023). Applying the concept of the smart supply
chain in the agricultural field (Perdana et al., 2020) can be one of the many various
industries. According to the characteristics of SSC, many case studies approach
with data collected (Wei et al., 2023) are gathered in databases.
Furthermore, the feasibility and functional efficiency of the SSC platform
(Huang et al., 2022) is important for companies and enterprises. The application
of SSC technologies can be observed in various countries around the world.
Moroccan industry is one of them (Chbaik et al., 2022). SSC has some advantages
for enterprises and SMEs. Enterprises at SSC supported by a new generation of
information technology play a crucial role in achieving stability of price and supply
in the necessities market and preventing the public from panic buying (Xu et al.,
2023). In this context, depending on the network platform, SSC finance effectively
and efficiently solves financing issues for small and medium enterprises (Liu et al.,
2023). In the following, the main concepts are explained.
2.1. Industry 5.0
In recent years, the term Industry 5.0 has emerged in several sources associated with
various concepts (Coelho et al., 2023) such as IoT, AI, Big data, text mining, and
many other technologies. Industry 5.0 is using techniques and text mining (Akundi et
al., 2022). Industry 5.0 is a combination of organizational principles and technologies
to design and manage operations (Ivanov, 2023). Industry 5.0 technologies are
assumed to enable better connectivity through the Internet of Everything (Fazal et al.,
2022). Some researchers believe that Industry 5.0 is regarded as the next industrial
revolution (Maddikunta et al., 2022) for the world of industry. Surely, ethics and
humans are important in Industry 5.0. It puts the workers’ health together with other
human values at the center of the manufacturing processes (Golovianko et al., 2023).
There are some points in Industry 5.0 that readers should know these. Industry
5.0 emerged as an attractive vision of an industry that aims beyond efficiency and
productivity towards respecting human values and contributing to crucial societal
needs (Golovianko et al., 2023). The power of Industry 5.0 is a societal aim beyond
occupations and development to become a resilient provider of success (Grabowska
et al., 2022).
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Opportunities and Challenges of Smart Supply Chain in Industry 5.0
Industry 5.0 is reviewing the presence of the human workforce and employees
in factories and companies, where man and machine would work in conjunction
to augment the process efficiency by making full use of human brainpower and
innovation through their integration with the present intelligent systems (Khan et
al., 2023). Additionally, Industry 5.0 is a new paradigm for manufacturing that aims
to revolutionize the way products are designed and developed (George & George,
2023). Unfortunately, emerging the concept of Industry 5.0 tackles societal troubles
and concerns (Ghobakhloo et al., 20233) by its modern paradigm.
2.2 Smart Supply Chain
A smart supply chain is an unprecedented networked mercantile framework different
from localized models and focuses on systematic supply chain implementations (Lee
et al., 2023). SSC can use some new technologies. In recent years, the development
of SSC has become more and more important for global organizations and companies
with physical internet to improve their competitiveness (Long et al., 2022). However,
emerging cutting-edge information technologies such as IoT, Cyber-Physical Systems
(CPS), and Blockchain technology (BCT) bring opportunities to provide an SSC
(Viriyasitavat & Hoonsopon, 2022). SSC uses several technologies such as BD, IoT,
Blockchain, AI, and Advanced Robotics (AR) to analyze data and identify trends
and opportunities (Bouti & Khoukhi, 2023). An SSC is engineered to be agile and
flexible based on the application of improved smart technologies (Chen et al., 2020).
Smart supply chains (SSCs) are designed and constructed to be flexible and agile
enabling personalized products and services (Kuo et al., 2021; Chen et al., 2020;
Liu et al., 2021).
There are some advantages for individuals and firms in the implementation of SSC.
Measuring the risks of the SSC (Liu et al., 2022) is essential too. SSC provides its
stakeholders with the ability to optimize and streamline their processes while getting
the aim of decreasing production costs and expenses of the company (Chbaithek et
al., 2023). Additionally, an SSC improves the collaborative relationships between
the stakeholders in the supply chain, such as manufacturers, and consumers (Kuo
et al., 2021). Understanding transformation towards SSC and its impacts will guide
and inspire employees in restructuring their supply chain (Tripathi & Gupta, 2020)
and it has led to an improvement in manufacturing performance.
Also, forecasting the demand plays a crucial role in SSC (Sardar et al., 2021).
SSC is concerned with providing the proper goods at the proper time with the proper
amount at the proper place at the proper price under the proper conditions for the
proper customer (Azizi et al., 2021). Furthermore, the Smart industry is acting well
in the system of SSCs (Nowicka, 2020). So, it is important to use the smart industry
for sure. An SCC could help people get out of their poverty by generating better
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Opportunities and Challenges of Smart Supply Chain in Industry 5.0
market opportunities and value (Rünzel et al., 2021) according to the case studies
found by the scholars. Just to add information to readers, there is smart supply
chain innovation (SSCI) too. SSCI has become a key solution for enterprises and
companies to improve their competitiveness (Wang et al., 2021). In addition, SSCI
is increasingly relying on the development of smart technologies (Long et al., 2022).
2.3 Smart Supply Chain Opportunities
There are some SSCO including Strengthening human capital, Growth of production
productivity with sustainable innovation, and resilient production and supply. Applying
supply chain employees to new industry technologies leads to the strengthening of
their capabilities, including increasing agility, improving decision-making power, and
growing individual creativity. There is an effect between supply chain management
and motivation for the performance of employees (Sutia et al., 2020). If the number of
smart employees increases, a smarter supply chain will be created. It is necessary to
recognize that employees are vital to production and service delivery. The managers
of the supply chain must be able to analyze situations cognitively and positively and
communicate with members of organizations, especially during challenging times
(Keller et al., 2020). Also, it is critical for supply chains to increase the productivity
rate and economic rate of nations (Goel et al., 2020). So, improving the economic
performance of the supply chain in Industry 5.0 while respecting and paying attention
to employees and the environment is essential.
For sure, the management of energy-consuming technologies, and the development
of the productivity of innovative sources with less energy in the supply chain
leads to the reduction in costs. Developing the management of energy-consuming
technologies is a low-cost strategy to decrease energy consumption (Tian & Shi,
2022). Also, responsible production infrastructures, and the control of consumerism
based on the increase of green purchases while maintaining the competitiveness of
companies in the chain can lead to the reduction of waste. From a cost calculation
point of view, the consumer engaging in green behavior (Parker et al., 2023) can
reduce costs and waste.
Additionally, the Development of flexible production capacity and advancements
in flexible business processes, focus on industry as a resilient factor, leading to social
welfare growth. The theory of resilient infrastructure emphasizes a requirement
for infrastructure that is flexible and agile (Helmrich et al., 2020). These types of
theories can make life easier. With the expansion of the resilience concept, scholars
and employees of modern companies have paid more attention to resilient cities (Liu
& Song, 2020) more and more. Furthermore, companies will perform amazingly.
For example, the motivation of companies and enterprises is to help employees pay
attention to their health and right sitting in addition to work (Matuska et al., 2020).
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Opportunities and Challenges of Smart Supply Chain in Industry 5.0
Especially, there are 5 opportunities for SSC in the present study including
Improving the accuracy of analysis and the power of human prediction, Transparency
Increasing, Sustainable automation, Sustainable innovation by sharing responsibility
for consumption and production, and Capacity expansion of resilient infrastructures.
2.3.1. Improving the Accuracy of Analysis
and the Power of Human Prediction
Analysis accuracy makes validity. There are many methods for improving the
accuracy of analysis. Results of some articles show that the methods are highly
effective in improving analysis accuracy (Meghdouri et al. 2023). Also, models
decrease analysis time complexity while improving the accuracy of analysis (Lin
et al., 2023). High-resolution models and high-resolution optimization models
have created conditions for progressing the accuracy of analysis and credibility of
that (Wang et al., 2023). The present possibility of a natural calamity and intrinsic
weakness do not fall within the power of human prediction or even effective action
(Rangos et al., 2020). But there are many events that humans can predict well. So,
by improving analysis accuracy humans can predict well.
2.3.2. Sustainable Innovation by Sharing
Responsibility for Consumption and Production
Business success increasingly depends on sustainable innovation (Costa & Matias,
2020). It shows that Sustainable innovations are an essential matter in the world of
business. Generally, it refers to new products, services, processes, and organizational
methods and marketing types that seek significant sustainability impacts (Aka, 2019;
Keränen et al., 2023). Boosting sustainable patterns of consumption and production
decreases the stress of the environment and will accommodate the basic needs of
humanity (Glavič, 2021).
Figure 3. Smart supply chain opportunities
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Opportunities and Challenges of Smart Supply Chain in Industry 5.0
2.3.3. Capacity Expanding of Resilient Infrastructures
The extant literature on resilient infrastructures is rich and focuses on water systems,
security, and transport (Delina et al., 2020). Probably, resilient infrastructures can
enable important benefits for the design and architecture of urban eras and cities
(Tubridy, 2023). So, it shows that expanding capacity in the urban areas is achievable.
Resilient infrastructures include climate resilience and infrastructure, risk reduction,
and structural measures (Pai et al., 2022). Also, resilient infrastructures can be
defined as systems with the ability to implement change management (CM) and
learn from previous unforeseen events (Mehvar et al., 2021).
2.3.4. Transparency Increasing
The use of technologies such as Blockchain in the supply chain makes information
visible and reliable. Block-chain-based technologies can improve the visibility of
information (Dutta et al., 2020). Clarification like this can reduce fraud, theft, and
breach of contracts, information, and obligations. Lacking trust as an issue may
provide a potential field of application for Blockchain technology (Durach et al.,
2021). For example, by using IoT with the help of sensors embedded in various
devices, companies can learn about changes in time and geographical location and
update their processes and supply chain in real-time. Multiple IoT forms enable
additional capabilities in data auto-capture, visibility, intelligence, and information
sharing for greater integration of supply chains (De vass et al., 2022).
2.3.5. Sustainable Automation
The use of tools such as smart robots in supply chain processes leads to better
automation in various functions such as ordering, distributing, and transporting
products. The advent of AI tools is set to enhance the functioning of the supply
chain (Ojha et al., 2021) in the same way. With the growth of automated circular
processes, it will be possible to reuse, repurpose, and recycle more natural resources.
2.4. Smart Supply Chain Challenges
Transforming from the supply chain to the smart supply chain management (Noordin,
2022) can be a challenging topic. To overcome this obstacle, identifying a thorough
assessment to motivate the manufacturing firms is crucial. So, motivating employees
is an opportunity for SSC. Interestingly, opportunities and challenges can link
together. On one hand, motivating employees is an opportunity for SSC on the other
hand, transforming the supply chain to a smart supply chain is a challenging topic.
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Opportunities and Challenges of Smart Supply Chain in Industry 5.0
There are some smart supply chain challenges (SSCC) including Increasing the
complexity of supply chain management, Instability from profitable behaviors, and
Lack of staff expertise. The formation of an SSC in Industry 5.0 due to the rapid
changes in the environment and the variety of customer needs due to the difficulty in
identifying high-risk factors and sensitivity to customer needs, causes the complexity
of the supply chain processes for business partners. Customer requirements are
the essential driving forces of product development (Li et al., 2023). A window of
opportunity is presented for future research to investigate the complexity of supply
chain collaboration (Huang et al., 2020) through the process between stakeholders.
Growing changes in the market, demand, laws, and regulations resulting from new
technologies and over-reliance on human goals may increase instability in the
supply chain and lead to the adoption of profit-making guidelines by commercial
partners. Using models can advance self-interested decision-making (Henninger,
2021). Thus, it affects self-interested actions. It is also possible that the partners
prioritize the partisan interests over the interests of the smart supply chain system.
The possibility of using technologies by the smart conditions of the supply chain
requires the development of skills and increasing the capabilities of employees at
the level of the supply chain. With the establishment of smart systems in the supply
chain, employees will also need to be familiar with understanding changes, training,
performance improvement, time, and cost allocation. The daily routine of the people
working in the smart office (Matuska et al., 2020) proves it.
Especially, there are 4 challenges for SSC including Lack of Privacy protection,
Inconsistency from incomplete information release, Increasing self-interested actions,
and Lack of human capital skills.
Figure 4. Smart supply chain challenges
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Opportunities and Challenges of Smart Supply Chain in Industry 5.0
2.4.1. Lack of Privacy Protection
The use of technologies such as Blockchain, IoT, Big data, and AI leads to increasing
privacy concerns for the supply chain and individuals. Blockchain is defined as a
technology that is stable and secure (Chen et al., 2020) in the smart supply chain.
Privacy and security are given significance more specifically in the context of the
supply chain industry (Ravi et al., 2022). On the other hand, privacy and security
are the most common issues of IoT (Shahzad et al., 2022).
2.4.2. Inconsistency From Incomplete Information Release
Access to accurate and timely information at the right time by technologies such as
AI and big data has significant challenges. AI is one mechanism that can be used to
enhance supply chain resilience by expanding the capabilities of business continuity
(Modgil et al., 2022). At the same time, increasing the speed of data transmission
and making decisions in situations where access to sufficient information is not
possible for employees’ leads to errors and inconsistencies in the starting process.
Also, the low speed of data transmission leads to security issues (Zhang et al., 2021).
2.4.3. Increasing Self-Interested Actions
According to the articles, sometimes the consequences are the intentional outcomes
of self-interested actions (Hands, 2021). Additionally, it is important to know how
the money phenomenon could have emerged from the self-interested actions of
many individuals (Nientiedt, 2023). The depletion of shared resources due to self-
interested actions by individuals (Kraner et al., 2023) can happen if self-interested
actions increase. Self-interested actions are motivated by future anticipation of
rewards from the organization which could take the form of bonuses, promotions,
or higher status (Sheedy et al., 2021). So, surprisingly it can be an opportunity for
companies too.
2.4.4. Lack of Human Capital Skills
Some key aspects of the development of human capital include information,
Internet, technology, training, education, new abilities, automation, communication,
innovativeness, professionals, productivity, AI, and IoT (Sima et al., 2020). But lack of
human capital causes troubles. Furthermore, it should be considered how significant
strategic human capital questions can be addressed with big data analytics (Hamilton
& Sodeman, 2020). The impact of human capital on the process of urbanization
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Opportunities and Challenges of Smart Supply Chain in Industry 5.0
is very important (Wang & Xu, 2023). So, the lack of human capital decreases the
speed of modernization.
3. APPROACH AND FINDING
As a result, it seems a successful SSC needs a conceptual approach. Before
presenting the conceptual framework, it is necessary to use the Delphi method to
reach a consensus of a group of experts to validate the extracted indicators. In this
section, after presenting the Delphi results, the conceptual framework of SSC based
on Industry 5.0 is presented.
3.1. Delphi Method
The Delphi technique is defined as a research approach to obtain consensus by using
a series of questionnaires and providing feedback to participants who have expertise
in key areas. This technique is used to screen indicators or reach an agreement on
the importance of indicators (Yousuf, 2019).
3.1.1. Delphi Descriptive Statistics
To perform the Delphi method, a Delphi team and panel were formed. The opinions
of the Delphi team were provided to the Delphi panel for aggregation. Descriptive
statistics of the Delphi team and panel are given in Tables 1 and 2.
Table 1. Descriptive statistics of the Delphi panel
Work
Experiences Job Career Academic Degree Age
25 Years Professor Ph.D. in Industrial Engineering 54
10 Years Associate Professor Ph.D. in Software Engineering 41
8 Years Assistant Professor Ph.D. in Information Technology Management 37
5 Years Assistant Professor Ph.D. in Industrial Management 34
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3.1.2. Delphi Results
Delphi steps were done in 3 rounds. 2 rounds are qualitative and one is quantitative.
In 2 qualitative rounds, opinions about opportunities and challenges were announced.
Considering that no new qualitative opinion was obtained in the second round, the
third round was held quantitatively. The consensus index in the quantitative round was
that 75% of the opinions were in one of the three ranges (1 to 3, 4 to 6, and 7 to 9).
3.1.2.1 First Round of Delphi
In this step, the questionnaire was given to the experts to review and express their
opinions. The opinions obtained in the first round of Delphi are listed in Table 3.
Table 2. Descriptive statistics of the Delphi team
Work
Experiences Job Career Academic Degree Age
25 Years Associate Professor Ph.D. in Industrial Engineering 49
15 Years Assistant Professor Ph.D. in Industrial Engineering 45
12 Years Manager of logistics and supply chain Ph.D. in Industrial Management 44
10 Years Manager of systems and methods Ph.D. in Industrial Management 41
10 Years Production planning manager Master of Industrial Engineering 40
9 Years Information security analyst Master of Industrial Engineering 38
9 Years Data Architect Master of Industrial Engineering 37
7 Years Product quality manager Master of Mechanical Engineering 34
5 Years Market research analyst Master of Business Administration 33
5 Years Product Manager Master of Public Administration 31
5 Years Information Technology Security Manager Master of Software Engineering 31
5 Years Data Engineer Bachelor of Software Engineering 30
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As indicated in the table above, the opinion of the experts includes correction,
integration, or deletion, and they agree with some factors. These comments are the
basis for designing the second round of the Delphi questionnaire.
3.1.2.2 Second Round of Delphi
In this step, a questionnaire was designed based on the opinions provided in the
first step. In this step, no new qualitative opinions were obtained and the experts
only expressed their agreement and disagreement with the opinions of the previous
round. The results of the analyses are given in Table 4:
Table 3. First-round results of Delphi
Explanation Point of
View Opportunities
Integration with 2 Integration Improving human predictions
Integration with 1 Integration Increasing the analysis accuracy of supply
chain managers
Remove due to covering the concept in other
sectors Remove Strengthening human capital
Agreed by 11 experts of the Delphi team Agreement Transparency increasing
Agreed by 10 experts of the Delphi team Agreement Sustainable automation
Correction to “sustainable innovation by
sharing responsibility for consumption and
production”
Correction Growth of production productivity with
sustainable innovation
Correction to “Capacity expanding of
resilient infrastructures” Correction Resilient production and supply
Explanation Point of
View Challenges
Removal due to lack of practical and
semantic alignment with the importance of
technologies
Remove Increasing the complexity of supply chain
management
Agreed by 11 experts of the Delphi team Agreement Privacy protection
Agreed by 11 experts of the Delphi team Agreement Inconsistency from incomplete
information releasing
Correction to “increasing self-interested
actions” Correction Instability from profitable behaviors
Correction to “lack of human capital skills” Correction Lack of staff expertise
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At the end of this step, because no new qualitative opinion was obtained and no
new opportunity or challenge was proposed, the factors were confirmed.
3.1.2.3 Third Round of Delphi
In this step, to identify important opportunities and challenges, a quantitative
questionnaire was prepared. The range of 1 to 9 is used in this questionnaire. The
basis for reaching a relative opinion consensus is that 75% of the respondents mark
in one of the ranges 1 to 3, 4 to 6, or 7 to 9. If 75% of the opinions are in the range
of 7 to 9, the relevant factor has reached a consensus and is approved; but if 75%
of the results are answered in the intervals 1 to 3 or 4 to 6; then the index reaches
consensus and is rejected. In other cases, the index does not reach a consensus and
is transferred to the next round. The results of this round are given in Table 5.
Table 4. Second-round results of Delphi
Explanation Opportunities
11 persons agreed and 1 person did not
answer
Improving the accuracy of analysis and the power of
human prediction
12 people agreed without declaring a
qualitative opinion Transparency Increasing
11 persons agreed and 1 person disagreed
without declaring a qualitative opinion Sustainable automation
10 persons agreed without declaring a
qualitative opinion and 2 persons did not
answer
Sustainable innovation by sharing responsibility for
consumption and production
10 persons agreed and 2 persons
disagreed without declaring a qualitative
opinion
Capacity expanding of resilient infrastructures
Explanation Challenges
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According to Table 5, all the factors were approved by the experts.
3.2. Conceptual Framework
To better understand the most important functions of SSCO and SSCC, a conceptual
model of the main factors is shown in Fig. 5.
Table 5. Third-round results of Delphi
Interpretation Standard
Deviation Average Opportunities
Consensus and
approval 0.17 2.79 Improving the accuracy of analysis and the power of
human prediction
Consensus and
approval 0.69 1.95 Transparency Increasing
Consensus and
approval 0.32 2.41 Sustainable automation
Consensus and
approval 0.38 2.32 Sustainable innovation by sharing responsibility for
consumption and production
Consensus and
approval 0.78 1.84 Capacity expanding of resilient infrastructures
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4. CONCLUSION
Smart Industry plays a vital role in the smart supply chain system (Nowicka et al.,
2020). SSC is known as the integration of the supply chains in the industry 5.0
technologies. For example, IoT-based supply chain applications show a conceptual
framework of the IoT applications necessary for SSC (Lee, 2020). Collectively,
technologies are referred to as SSC technologies (Prieto & Martín-Peña, 2023).
Thus, the supply chain will be smarter by applying industry 5.0 technologies.
More and more, scholars are eager to research smart factories and smart supply
chains and emphasize the significance and the influences of advanced technologies
such as IoT, cloud services, and 3D printers (Chung et al., 2018). Smart supply chain
Figure 5. Conceptual model of SSC in Industry 5.0
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Opportunities and Challenges of Smart Supply Chain in Industry 5.0
finance effectively and efficiently solves financing problems for small and medium
enterprises (Liu et al., 2023) from a practical point of view.
From the operational aspect, verifying the structural relationship between business
performance and dynamic capability in the smart supply chain environment of small
and medium manufacturers (Kim & Park 2021). Smart supply chain management
practices facilitate firms to attain more sustainability in the environmental, economic,
and social dimensions with innovative technologies in the supply chain (Organ et al.,
2020). SSC enhances the quality and efficiency of factory operations and increases
all indexes of the designed system (Li et al., 2022). Also, it is determined that smart
supply chain management, mediated by smart technology trends in developing and
developed countries (TIAN, 2023) has a global role.
This chapter develops the literature and creates a conceptual framework with
the impact of Industry 5.0. So, it is important to know the main opportunities and
challenges of SSC to identify advantages and disadvantages in the concept of Industry
5.0. Thus, risks and opportunities can be evaluated. The necessity of SSC leads to
some advantages. SSC has a significant effect on some improvements in the aspects
of cost reduction, solution of supply and demand dislocation, and promotion of
industrial transformation and upgrading (Yonghui & Jiang, 2020). Advanced smart
technologies have created several innovations in managing supply chain activities
and thus accelerate the transformation of the traditional supply chain towards a
smart supply chain (Labbi & Ahmadi, 2021).
The SSC conceptual model in this chapter includes opportunities and challenges.
Opportunities in five components included Improving the accuracy of analysis and
the power of human prediction, Sustainable innovation by sharing responsibility
for consumption and production, Capacity expansion of resilient infrastructures,
Transparency Increasing, and Sustainable automation. Sustainable supply chain
management makes a positive impact on the picture of businesses, while SSC practices
provide a competitive benefit by providing flexibility, speed, risk management,
cost savings, and inventory accuracy (Organ et al., 2020). Also, challenges in four
components included Lack of privacy protection, Inconsistency from incomplete
information release, increasing self-interested actions, and Lack of human capital
skills.
As a conclusion, the proposed conceptual model included 4 challenges and 5
opportunities. There are some effects of the proposed conceptual model with 9
dimensions on supply chain 5.0 and businesses. Improve efficiency, fast response, cost
reduction, and Stabilization of the market relationship are defined in the following.
The supply chain can improve the efficiency and productivity of companies
by activating sustainable automation opportunities in the processes of production,
distribution, and inventory management through smart technologies. SSC with the
help of Industry 5.0 can use the increasing population rate to respond on time and
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Opportunities and Challenges of Smart Supply Chain in Industry 5.0
automatically to the challenging issues of companies by using an opportunity such
as increased transparency. Then it can start fixing them for customers immediately.
Operating costs will be significantly reduced by improving performance and using
resilient production as a new opportunity. The right time to buy is provided for
customers by using sensitive data extracted from industry 5.0 technologies, as well
as increasing the analysis accuracy in the supply chain,
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Chapter 7
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DOI: 10.4018/979-8-3693-0159-3.ch007
ABSTRACT
Artificial intelligence and machine learning are overcoming more businesses and
distinctive angles of our lives daily. Of course, the coordination industry isn’t absolved
from this. Manufactured insights and machine learning within the coordination
industry can play a vast and successful part in the field of the supply chain. By
utilizing this innovation, forms can be optimized, botches made by people can be
maintained a strategic distance from, and future openings and challenges can be
anticipated. In this manner, business productivity and success will be given. In this
chapter, subtle elements are mentioned about the benefits of utilizing and executing
manufactured intelligence technology within the supply chain, and by perusing these
things, you may get the significance of how counterfeit intelligence and machine
learning calculations can offer assistance in creating your commerce.
Employing AI in the
Sustainability of Smart
Commerce and Supply Chain
Esmael Najafi
Islamic Azad University of Science and Research, Tehran, Iran
Iman Atighi
Department of Industrial Engineering, Islamic Azad University, Kish, Iran
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Employing AI in the Sustainability of Smart Commerce and Supply Chain
INTRODUCTION
Artificial intelligence (AI) can potentially convert numerous perspectives of trade
operations. This innovation can be utilized in different areas such as information
examination and request determining, progressing coordinations and transportation
courses, and identifying wasteful focuses within the supply chain. This eventually
led to strides in responsiveness to request changes, decreased conveyance times,
and lower costs.
Supply chain management is critical as one of the main success factors in businesses
that produce goods and services. According to the ever-increasing developments in
technology and information, using artificial intelligence as one of the supply chain
management solutions is required (Fallah et al., 2021). Artificial intelligence is a
concept in which computers and systems are able to perform tasks that are. They
usually seem complicated for humans. In the supply chain provision field, using
artificial intelligence improves the performance and efficiency of existing processes
(Gallo et al., 2023).
Artificial intelligence (AI) can potentially convert numerous viewpoints of
business operations. This innovation can be utilized in different areas such as
information examination and request determining, making strides in coordination
and transportation courses, and identifying wasteful focuses within the supply chain.
It eventually leads to moving forward responsiveness to request changes, diminished
conveyance times, and lower costs (Kamran et al., 2023).
The use of artificial intelligence in supply chain management can help reduce
costs related to returns and after-sales services. By using intelligent algorithms in
producing goods and products, it is possible to obtain detailed information about
the quality and characteristics of the products and to take measures to increase
the quality and reduce the failure rate of the products. Also, by using artificial
intelligence, it is possible to analyze customers’ buying patterns and demand better
and identify the problems that may cause the return of goods (Kazancoglu et al.,
2023). By improving quality control and inspection processes, shipments that have
caused product returns can be avoided. Also, by improving the methods of after-sales
service and communication with customers, it is possible to manage customer needs
better and avoid sending inappropriate goods. Therefore, using artificial intelligence
in supply chain management can help reduce the costs related to the payment of
returns and after-sales services, improve the quality of goods and products, increase
customer satisfaction, and improve their shopping experience (Liu, 2023).
Using customer data makes it possible to achieve a more accurate prediction of
customer needs and improve sales accordingly. For example, by analyzing customer
purchase data, it is possible to achieve a more accurate prediction of their needs and
individual tastes and offer them related products. Also, by using purchase data, it
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Employing AI in the Sustainability of Smart Commerce and Supply Chain
is possible to achieve a more precise forecast of customer demand and inventory
of goods. As a result, by optimizing production and supply processes, customers’
needs can be better met. Sales and marketing processes can be improved using
data collected from customers and sales. For example, by analyzing sales data, it is
possible to achieve a more accurate prediction of customer behavior and the factors
that influence their decisions and to improve sales by making appropriate changes
in sales and marketing processes. Using data analysis in sales can help improve
customers’ shopping experience, increase their satisfaction, improve production
and supply processes, and improve sales and marketing processes.
In summary, using artificial intelligence as one of the main tools in improving
supply chain management provides many organizational capabilities. These
capabilities include forecasting demand, improving production and distribution
performance, reducing costs, and increasing productivity. Considering these
issues, using artificial intelligence in supply chain management is necessary and
very effective. Artificial intelligence technology in supply chain management can
improve performance, increase customer satisfaction, and improve the company’s
competitiveness.
ARTIFICIAL INTELLIGENCE, VALUE
CHAIN, AND APPLICATIONS
Artificial intelligence is one of the most essential transformative technologies of the
digital age that can help move towards digital transformation. Artificial intelligence
consists of two parts: intelligence and artificial intelligence. The word intelligence
means the function of the mind in communicating with the environment, and the word
fake, which means artificial, is attributed to intelligence. Of course, this is not a very
accurate definition of artificial intelligence. Artificial intelligence is very different
from intelligence in other sciences, such as psychology, and related concepts, such
as the power of speech, reason, and understanding of meaning (Lu et al., 2023).
Artificial intelligence seeks to make activities smarter, and this goal can appear
according to the nature of different technologies. Artificial intelligence is closely
related to other fields of technology, such as the Internet of Things and big data.
Artificial intelligence is presently playing a developing part in IoT applications
and advancements. Ventures and acquisitions in new companies that coordinated
these zones have developed exponentially. Numerous IoT stage suppliers offer
coordinates AI capabilities such as machine learning-based analytics. 2.5 exabytes of
data are created each day. Analyzing all these tremendous data is incomprehensible;
consequently, we cannot extricate all important designs and data. This range is where
artificial intelligence and quantum computers come together. Powerful quantum
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Employing AI in the Sustainability of Smart Commerce and Supply Chain
processors must handle massive data sets and AI to analyze them very granularly
(Widder et al., 2023).
If all the choices of the AI framework are put away within the blockchain, we’ll
have an endless database, and we will be able to examine the choices made by the AI
and get their rationale. In expansion, information security is additionally ensured since
the data put away within the blockchain cannot be fashioned. One of the challenges
of blockchain is that all information is recorded and stored on all computers. The
number of blocks increases, and this chain becomes heavier over time. Blockchain
storage methods can be optimized with the help of machine learning algorithms.
Trends such as the expansion of mobile phones and the Internet of Things have
created changes in cloud technology. Still, the most significant change can come
from the convergence between the cloud and artificial intelligence (Najafi et al.,
2022). The relationship between the cloud and artificial intelligence is two-way. The
cloud can provide artificial intelligence with the information it needs to learn, and
in return, artificial intelligence can provide information that feeds the cloud. This
relationship can revolutionize the development of artificial intelligence, and the
effort of cloud providers such as IBM to enter into artificial intelligence research
demonstrates this importance (Mariappan et al., 2023).
In common, it can be said that any innovation that creates more brilliance and
esteem is influenced by artificial intelligence innovation, and its advance is tied to it.
In general, artificial intelligence has replaced and supplemented human intelligence,
and any activity and technology that can be controlled by human intelligence and
used by humans can be maintained or replaced by artificial intelligence (Nozari et
al., 2021). For example, robots and unmanned birds that used to receive data from
the environment and interact automatically with their environment based on it can
now learn from this data and need less human control. The artificial intelligence
value chain is shown in Figure 1.
Figure 1. Artificial intelligence value chain
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Employing AI in the Sustainability of Smart Commerce and Supply Chain
AI-based instruments can offer assistance in deciding ideal stock levels by
analyzing information and chronicling supply and request patterns. This could offer
assistance to avoid intemperate generation and capacity costs. AI-based estimating
apparatuses can offer assistance to diminish request and supply changes by utilizing
information collected from clients, providers, producers, and merchants to control
the bullwhip impact.
USING ARTIFICIAL INTELLIGENCE IN
SUPPLY CHAIN MANAGEMENT
Artificial intelligence arrangements are accessible for organizations to attain way
better performance in supply chain management. These arrangements have different
highlights: demand-determining models, transparency throughout the supply chain,
coordinated commerce planning, energetic scheduling optimization, and physical
stream computerization, all based on prescient models and relationship investigation
better to get the causes and impacts in supply chains, counting these are highlights.
Artificial intelligence makes it possible to improve many existing processes. Modern
supply chain robotization isn’t conceivable without artificial intelligence (Nozari
et al., 2023). Counterfeit insights empower supply chain mechanization advances
such as advanced laborers, distribution center robots, self-driving vehicles, robotic
process automation (RPA), etc., to computerize tedious and error-prone assignments.
Successful implementation of AI-based supply chain management allows early
adopters of this technology to improve their logistics costs by 15%, inventory levels by
35%, and service levels by 65% compared to their competitors. These improvements
can be seen in many areas of the supply chain, including:
Automation of processes
Artificial intelligence can perform repetitive and time-consuming processes such as
data entry and shipment tracking automatically. As a result of this action, while
improving productivity and reducing errors in the entire process, employees
will have the opportunity to focus on more specialized activities (Nozari et
al., 2019).
Demand forecasting
Using artificial intelligence as a powerful tool in demand forecasting can significantly
improve demand forecasting and future demand estimation. Using artificial
intelligence algorithms, it is possible to perform a detailed analysis of customer
buying patterns and changes in different markets and obtain an accurate forecast
of future demand (Nozari et al., 2022).
Progressing the stability and execution of the supply network
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Employing AI in the Sustainability of Smart Commerce and Supply Chain
In improving the supply network’s stability and performance, using artificial
intelligence can help managers improve the supply network’s stability and
performance by applying intelligent algorithms. By analyzing the available
data, it is possible to identify the patterns of customers, suppliers, and different
processes, and by using intelligent solutions, a lot of improvement in the
performance of the supply network can be achieved (Aliahmadi et al., 2023).
Improve warehouse management
In improving warehouse management, using artificial intelligence can significantly
improve warehouse management and reduce costs related to inappropriate
inventories. By using intelligent algorithms, it is possible to predict warehouse
stocks accurately, and by using innovative solutions, a lot of improvement in
warehouse management and reduction of costs related to inappropriate stores
can be obtained (Nozari et al., 2022).
Improving delivery and distribution processes
In improving delivery and distribution processes artificial intelligence can help
reduce costs and improve productivity in delivery and distribution processes.
Intelligent solutions can improve delivery and distribution processes, and
productivity can be increased by reducing costs.
Improving the quality of products and items
In the field of improving the quality of goods and products, the use of artificial
intelligence can help improve the quality of goods and products and reduce
the rate of failure and return. By applying intelligent solutions, it is possible
to improve the quality control and inspection processes, and by reducing the
failure and return rates, the costs related to the payment of returns and after-
sales services can be reduced.
Risk Reduction
Artificial intelligence has the ability to predict risks in the supply chain and identify
unusual patterns with its analytical capabilities. In this regard, relying on this
valuable data, we will be able to implement valuable protective measures
throughout the supply chain. Also, by taking advantage of this capability,
companies can predict factors causing delays in the supply chain, such as
climate or political changes, and actively adapt to these challenges.
Improve the ability of communication between suppliers and customers
In improving the ability of communication between suppliers and customers, using
artificial intelligence can help improve the knowledge of communication
between suppliers and customers. By using intelligent solutions, it is possible
to improve communication processes between suppliers and customers, and
by improving communication ability, it helps to satisfy customers and enhance
their shopping experience.
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Employing AI in the Sustainability of Smart Commerce and Supply Chain
The utilization of artificial intelligence in supply chain administration can offer
assistance to decrease costs related to returns and after-sales administrations. By
utilizing intelligent algorithms, within the handle of creating merchandise and items,
it is conceivable to get point-by-point data almost the quality and characteristics of
items and to require measures to increase the quality and reduce the disappointment
rate of items. Also, by using artificial intelligence, it is possible to better analyze
the buying patterns and demand of customers and identify the problems that may
cause the return of goods. By improving quality control and inspection processes,
shipments that have caused product returns can be avoided. Also, by improving the
processes of after-sales service and communication with customers, it is possible
to better manage customer needs and avoid sending inappropriate goods. Therefore,
the use of artificial intelligence in supply chain management can help reduce the
costs related to the payment of returns and after-sales services, and also improve the
quality of goods and products, customer satisfaction, and improve their shopping
experience (Nozari et al., 2021).
Figure 2 shows the effects of artificial intelligence on the supply chain.
Figure 2. Supply chain with AI
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Employing AI in the Sustainability of Smart Commerce and Supply Chain
A cross-sectional evaluation of Artificial Intelligence within the supply chain
depends on components such as innovation, end-users, sending, features, application,
and locale. Based on this component, artificial intelligence within the supply chain
market is isolated into programs and equipment. The equipment portion, moreover,
needs memory, processors, and a strong organization.
Based on innovation, artificial intelligence within the supply chain market is
portioned into text-aware computing, standard dialect preparation, machine learning,
and computer vision. The premise of artificial intelligence division arrangement
within the supply chain market is separated into cloud, default, and crossover.
Based on applications, artificial intelligence within the supply chain advertise is
fragmented into stockroom administration, provider relationship administration,
supply chain arranging, armada management, logistics and transportation, and
hazard administration. Based on end-users, the AI within the supply chain market
is fragmented into food and refreshment, car, retail, fabricating, aviation, customer
gadgets, and others (Razzaq et al.,2023).
CONCLUSION
Over the past two decades, due to the increased flow of data and complexities created
in business scenarios, there has been an increased interest and traction in using artificial
intelligence in various industries. Currently, the potential of artificial intelligence is
being used in multiple business sectors and operations. Artificial intelligence helps
design thinking of business systems and learns from data to gain insights without
involving any human input. Organizations can use artificial intelligence to identify
shortcomings in their supply chain and appropriately distribute assets.
AI has the potential to assist businesses in creating the finest conceivable items
by rapidly distinguishing client desires, gaging the showcase, exploring diverse
disappointment modes, optimizing inside and outside supply chains, and empowering
and sustaining a more imaginative workforce through the mechanization of routine
errands.
In summary, the use of artificial intelligence as one of the main tools in improving
supply chain management provides many capabilities for organizations. These
capabilities include forecasting demand, improving production and distribution
performance, reducing costs, and increasing productivity. Considering these issues,
it seems that the use of artificial intelligence in supply chain supply management
is necessary and very effective. The use of artificial intelligence technology in the
field of supply chain supply management can lead to better performance, increase
customer satisfaction, and improve competitiveness.
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Employing AI in the Sustainability of Smart Commerce and Supply Chain
The mentioned items are some of the most critical and up-to-date artificial
intelligence applications in the supply chain and logistics that businesses can use
to improve their profitability. The speed of technological progress makes these
applications increase daily, and it will likely affect all parts of this field shortly.
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Chapter 8
DOI: 10.4018/979-8-3693-0159-3.ch008
ABSTRACT
Traditional supply chain administration regularly depends on centralized frameworks,
manual forms, and data silos. This could lead to wastefulness, lack of transparency,
and expanded risk of extortion and falsification. As businesses proceed to expand
globally and customer requests increments, there is a developing requirement for
more prominent straightforwardness, effectiveness, and security in supply chain
administration. Using blockchain technology, businesses can see the movement of
goods throughout the supply chain in real-time. It enables data sharing among all
parties involved, provides a source of truth, and fosters trust among stakeholders.
Blockchain technology can offer assistance in computerizing and streamlining supply
chain forms, counting acquirement, inventory administration, and procurement. This
may lead to taking a toll on investment funds and expanded operational proficiency.
In this chapter, a conceptual system for intelligent supply chains based on blockchain
is given. It shows the causal connections of the compelling components in these
smart supply chains.
A Conceptual Framework for
Blockchain-Based, Intelligent,
and Agile Supply Chain
Masoud Vaseei
https://orcid.org/0000-0002-9221-2128
Islamic Azad University, Lahijan, Iran
Copyright © 2024, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited.
151
A Conceptual Framework
INTRODUCTION
A supply chain, as its title recommends, could be an organization of all individuals,
organizations, assets, exercises, and advances included in making and offering
an item. A supply chain incorporates everything from the conveyance of crude
materials from the provider to the producer to its last conveyance to the conclusion
client. In a few products, speed plays an imperative part within the supply chain
and can be exceptionally compelling. In a few merchandise that require nonstop and
unaltered conveyance, the part of “keeping information and data in a secure put”
will be exceptionally compelling and down to earth. The mystery of reaching these
components lies within the fundamental and viable characteristics of blockchain,
in which blockchain innovation can play a progressive part within the supply chain.
The worldwide supply chain has become a tremendous and complex framework
businesses utilize to make and disperse their items universally. Its complexity has
driven numerous mechanical advancements within the past few long time, counting
receiving blockchain innovation. Blockchain is the spine of advanced monetary forms
and non-fungible tokens (NFTs). But since then, it has become an arrangement for
different global businesses. Blockchain innovation has revolutionized healthcare,
government, and video diversions. The use of blockchain within the supply chain
has progressively entered (Nozari et al., 2022a).
The application of blockchain in the supply chain concerns most businesses that
can use this technology to track every transaction. Sharing documents, personal
information, and digital currencies is also possible. Corrupting is extremely difficult
since the ledger is fully distributed across the network. To change the catalog, you
must simultaneously record the changes at every node in the entire network. If this
is not done, the network detects that one record does not match the others and marks
the transaction as broken (Nozari et al., 2021a).
Blockchain innovation permits companies to track exchanges with more noteworthy
security and straightforwardness. The potential effect on supply chain execution
is colossal. The foremost crucial use of blockchain within the supply chain is that
companies can follow the history of an item accurately from the point of origin to
where it is presently. With the assistance of this innovation, parties collaborating on a
typical stage can significantly diminish the time delays, overhead, and human mistakes
frequently related to exchanges. Decreasing mediators within the supply chain also
reduces extortion’s dangers. At long last, where extortion happens, comprehensive
records empower organizations (Nozari et al., 2021b). A shared blockchain record
gives a dependable, tamper-free review path of the supply chain’s data, stock, and
finances. Companies can synchronize coordination information, track shipments,
and mechanize installments employing a shared blockchain. In addition, they can
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A Conceptual Framework
do this without essentially changing their bequest frameworks while sharing as it
were relevant data (Nozari et al., 2023c).
Generally, blockchain technology has the potential to revolutionize supply
chain administration and bring the straightforwardness, proficiency, and security
required to move products. As this innovation develops, we are likely to see more
businesses and businesses utilize blockchain arrangements to make strides in their
supply chain operations and meet developing customer requests. For this reason, in
expansion to looking at the measurements and key components of blockchain, this
chapter and its impacts on the supply chain, a conceptual framework is displayed
as a blockchain-based smart supply chain execution map.
BLOCKCHAIN IN THE SUPPLY CHAIN
As its name recommends, the supply chain may be an organization of all individuals,
organizations, assets, exercises, and innovations in making and offering an item. A
supply chain incorporates everything from the conveyance of crude materials from the
provider to the producer to its last transportation to the conclusion client. Essentially,
each item that concludes the client speaks to the endeavors of numerous organizations
and partners collectively called the supply chain. In a supply chain, organizations
are often associated with an arrangement of “physical” and “informational” streams.
“Physical flows” incorporate the development and capacity of products and materials,
and “data streams” include coordination between accomplices to control the day-
by-day stream of small and large products and materials within the supply chain
(Nozari et al., 2023a).
Speed plays a vital role in the supply chain of some goods and can be very
influential. For example, meat and dairy products require a precise and orderly
supply chain. Seasonal goods or goods that can only be used in specific periods
also need “speed to adapt” to the conditions, and the order in carrying out supply
chain processes is an important issue (Nozari et al., 2023b).
In some goods that need continuous and unchanged distribution, “keeping data
and information in a safe place” will be very effective and practical. The secret to
reaching these factors lies in blockchain’s primary and functional characteristics,
in which blockchain technology can play a revolutionary role in the supply chain
(Nozari et al., 2021c).
The traditional supply chain model is based on trust and causes people to be
unaware of essential parts of the supply chain stages, which has caused many
problems. Creating a blockchain structure and infrastructure can solve these problems.
In general, with the development of new technologies and technologies, different
industries, like it or not, are forced to use them to compete with competitors. The
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A Conceptual Framework
supply chain industry has also undergone many changes with recent developments and
rapid production growth. For example, the development of artificial intelligence has
encouraged companies active in the field of the supply chain to use this technology
to improve the quality control system (Nozari et al., 2021b).
In general, the benefits of using blockchain in the supply chain can be summarized
in the following two cases:
Blockchain is quick, cost-effective, proficient, and straightforward, which seems
an advantage for worldwide supply chains from nourishment to precious stones
to cars. At the center of the blockchain is the decentralized record, which
comprises scrambled pieces or hubs of put-away, chained information that frame
a real-time source of truth that can be shared between different parties. The
blockchain record is straightforward and secure, making it a center innovation
for each division, counting supply chain and coordination.
Blockchain-based open record frameworks permit companies to oversee their stock
all through the supply chain, and shrewd contracts are modified, advanced
contracts that consequently trigger or record related occasions when certain
conditions are met. It gives a way for supply chain partners to collaborate and
share data and cash more viably.
The impact of blockchain in the supply chain is shown in Figure 1.
154
A Conceptual Framework
EMPLOYING THE BLOCKCHAIN IN DIFFERENT
PARTS OF THE SUPPLY CHAIN
Supply chains are at the heart of conveying products to clients promptly and have
taken a toll. In any case of what sort of item an organization produces or offers,
keeping clients fulfilled and accomplishing monetary objectives depends on building
a proficient and solid supply chain arrangement. Achieving client fulfillment
requires consistent collaboration and coordination over the esteem chain of suppliers,
manufacturers, banks, controllers, coordination benefit suppliers, and retailers. At
the same time, disturbance within the supply chain causes expanded fetched and,
more critically, misplaced income. Worse, these disturbances are exacerbated by
Figure 1. The impact of blockchain on the supply chain
155
A Conceptual Framework
wasteful forms built on incapable data (data that’s not solid and straightforward)
(Tootian et al., 2022).
To control these disturbances, organizations look for straightforwardness,
adaptability, and agility in their supply chains. As a portion of practical innovations
in organizationssupply chains, blockchain builds belief, transparency, and agreement
among all partners, benefiting each on-screen character and guaranteeing adaptable
commerce results. Blockchain potential extends past cryptocurrency applications
and is presently recognized as an essential instrument to progress supply chain
productivity and viability. Coordination requires complex universal directions to
supervise the development of merchandise worldwide. Due to data asymmetry within
the expansive volume of data streams, such a framework is inclined to mistakes
or debasement among intermediaries (Nozari et al., 2023b). The capacity to set
up moment trust in recorded exchanges can improve effectiveness in numerous
capacities related to supply chain operations, counting financial trades, operational
deals, contracting, sourcing, etc., without the select requirement for a centralized
framework. Blockchain innovation gives the plausibility of documentation and
introduction of archives. As a result, offices such as total following and following
where merchandise is put and how to get ready, purchase, apportion, and utilize
them are also given (Fallah et al., 2021).
It is clear that utilizing this innovation moves forward transparency and
responsibility and encourages the method of confirmation of products and materials.
In expansion to this increasing speed of the stream of merchandise, convenient
conveyance of items and more noteworthy straightforwardness in coordination
exercises are the benefits that will gather to all supply chain partners through the
appropriation of this innovation. Moreover, in such a circumstance, the vertical
integration of businesses is considered more since the costs related to developing
items between middle people are decreased by expanding straightforwardness
(Toloie-Eshlaghy et al., 2013).
In a conventional progressive supply chain, the information stream over the
organization regularly mirrors the stream of products. In a disseminated record
environment utilizing blockchain, all information and data can be shared in a
decentralized way so that parties can see the same information. In such a circumstance
and when transmitting data, there’s no requirement for each supply chain performing
artist to act as a mediator between adjacent accomplices. More accurately, each hub
must be able to see exchanges to endorse or dismiss them, but this endorsement or
dismissal depends on the nature of the supply chain program (Chen et al., 2017).
The taking after are illustrations that illustrate the potential of blockchain in
diminishing supply chain costs and making strides in benefit levels.
Improved tracking and transparency
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A Conceptual Framework
By implementing a blockchain beside the Internet of Things, gadgets such as
intelligent sensors and RFID labels record the development time of items
at entirely different stages of the supply chain and their status (temperature,
vibration, mugginess, etc.) more successfully. At that point, this information is
put away on a blockchain, and savvy contracts are connected to guarantee real-
time permeability (Najafi et al., 2022). It implies more exact permeability and
precise data into the following handle, which can assist companies in recognizing
and addressing issues quickly. A conveyed organization that carefully offers
assets and information can diminish stock misfortune and squander and dispose
of the requirements for paper-based workflows. It implies any extra capacity
and labor costs required to prepare and oversee physical reports are dispensed
with (Eisapour et al., 2013).
Making payments more efficient
By implementing a blockchain beside the Internet of Things, gadgets such as smart
sensors and RFID labels record the development time of items at entirely
different stages of the supply chain and their status (temperature, vibration,
mugginess, etc.) more successfully. At that point, this information is put away
on a blockchain, and savvy contracts are connected to guarantee real-time
permeability (Najafi et al., 2022). It implies more exact permeability and precise
data into the following handle, which can assist companies in recognizing and
addressing issues quickly. A conveyed organization that carefully offers assets
and information can diminish stock misfortune and squander and dispose of
the requirements for paper-based workflows. It implies any extra capacity and
labor costs required to prepare and oversee physical reports are dispensed with
(Eisapour et al., 2013).
Tracking and interception
Information asymmetries and irregularities among supply chain members are
continuously displayed, making boundaries to following particular exchanges
and commodities. Downstream members within the supply chain frequently
require data for almost an item, counting the gathering handle, fabric records,
and cautionary notices. The keenness of a product’s exchange records requires
broad forms and controls that are not effortlessly accomplished. Employing a
conveyed record, the merchandise exchange between two parties distinguished
as two addresses on the blockchain can be recorded. The business incorporates
extra area, date, cost, and amount of data. Blockchain can ensure each exchange
record, permitting all parties to the form to follow the initial measurements
and beginnings of crude materials or components (Chen et al., 2022).
Payment process
Blockchain can moreover progress installment handling within the supply chain,
where buyers use a supply chain finance (SCF) stage to pay their suppliers’
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A Conceptual Framework
solicitations. Supply chain finance, or SCF, maybe a term that depicts a set of
technology-based arrangements that diminish financing costs and make strides
in commerce effectiveness for buyers and vendors included in an exchange. SCF
strategies incorporate exchange robotization, end-to-end receipt endorsement,
and settlement handling. According to this show, the buyers concur to endorse
their suppliers’ solicitations in SCF so that the bank or other outside speculators
can do financing. These banks pay the supplier’s receipt quickly after getting the
endorsement of the solicitations from the buyers after deducting their expenses.
Advertising this short-term SCF credit that optimizes working capital and
gives liquidity to both parties offers distinct benefits to all members. Whereas
providers get speedier to get to the money they owe, buyers have more time
to reimburse the bank. As a result, the parties can utilize the accessible cash
for other ventures to smooth the pertinent operations (Bayanati et al., 2022).
Logistics and transportation
The capacity to track a holder shipment along its travel from root to goal has genuinely
been a critical supply chain challenge. It has not changed much within the past
50 years. The complex preparation includes about 30 substances: merchants,
exporters, shipping armadas, clearing specialists, shipping lines, shipping
companies, surveyors, banks, charge specialists, well-being organizations, and
protection brokers. The shipping following preparation is manual and paper-
based, including hundreds of communication occasions. Around 55 reports are
required to secure an exchange, counting commercial solicitations, pressing
records, certificates of the root, shipping enlightening, bills of the filling
(standard contract of carriage), products assessment certificates, traditions
clearance records, shipping solicitations, and letters of credit (Bayanati., 2023).
Another challenge within the supply chain is following the amount, details, and
root of holders, trailers, and beds. By encoding protection arrangements, traditions
clearance, and data related to a shipment, blockchain can disentangle shipping
forms and diminish the handling time of a stack (Nahr et al., 2021). A disseminated
advanced ledger can be utilized to preserve blockchain exchanges. Ready to transfer
sales and data such as pressing records, solicitations, certificates of the root, trade
endorsements, purport licenses, information for conveyance and clearance, bills
of lading, marine protections, and merchandise review certificates to the record of
the particular parties. Recording these things within the joint document can give a
total see of the papers and exchanges related to a holder for traditional operators,
shipping lines, shipping armadas, and surveyors (Moeini et al., 2013).
These benefits can decrease misfortunes, particularly amid the deterioration of
perishable products. It can guarantee the completeness and exactness of archives
and encourage control and extortion in reports. Since exchanges recorded on the
158
A Conceptual Framework
blockchain are permanent, no party can change the records. The dispersed ledger’s
straightforwardness can viably impact asset allotment, transportation arranging, and
energetic alteration of costs based on supply and request since data such as capacity,
fetched and conveyance time, and gauges for distinctive transportation courses are
given to the recipients. Utilizing blockchain to upgrade worldwide coordination
exchanges can progress free trade between companies and nations by lessening
the costs of mediators such as cargo brokers. This decrease in costs can decrease
the expenses of transporters and, eventually, the customer costs (Aliahmadi et al.,
2022a). In Figure 2, the blockchain-based supply chain architecture is shown.
Blockchain highlights can be combined with the Internet of Things, sensors,
and data analytics. The combination of these innovations led to the discovery of
data related to cargo travel. It makes it conceivable to anticipate the sum of delay,
harm, and entry time. The joint record can record data related to such dangers and
help carriers comply with protection controls. For illustration, on the off chance
that the log appears in geological zones known for robbery, guarantees can offer
Figure 2. Blockchain-based supply chain architecture
Source: Schütte et al. (2018)
159
A Conceptual Framework
remarkable protection scope for ships that go to those zones. Protection claims may
be paid sooner because the blockchain data on the record is used to settle claims
rapidly without entering the bulky records required to confirm a claim (Aliahmadi
et al., (b)2022). Safeguards can respond quickly to item condition changes amid
transportation utilizing shrewdly contract capabilities. It incorporates following
and confirming the time and put of conveyance confirming the proprietorship and
status of the resource at any point in its chain of guardianship. This capability will
be noteworthy for high-value resources, such as jewels and works of craftsmanship,
regularly subject to different dangers. Such data will be necessary to insurers and
other parties, such as proprietors, shippers, banks, and coordination benefit suppliers.
Utilizing blockchain within the record guarantees that data is permanent and cannot
be changed or erased (Fallah et al., 2021).
CONCLUSION
One of the most important and fascinating new technologies today is “Blockchain.”
With the emergence of this technology and its use by the most prominent companies,
it has created many developments in maintaining security, privacy, etc. The use of
the Internet of Things and artificial intelligence technologies in the supply chain has
been associated with high costs. For that reason, these technologies have not been
able to be widely used. Still, while being highly efficient, the blockchain and its
infrastructure for companies active in this field are associated with cost reduction.
Blockchain technology allows companies to track exchanges with more
noteworthy security and straightforwardness. By utilizing blockchain within the
supply chain, companies can follow an item’s history from its beginning to where
it currently is. With the assistance of this capable innovation, parties collaborating
on a typical stage can drastically decrease the time delays, overhead, and human
error frequently related to exchanges. Lessening mediators within the supply chain
also diminishes extortion’s dangers. Blockchain effectiveness makes worldwide
supply chains more proficient by permitting companies to total and affirm trades
specifically. Coordinates installment arrangements, reduces the time between
arranging and installment handling and guarantees appropriate and convenient
product development. Considering the scope of supply chain action in different
industries, there’s a noteworthy space for developing blockchain innovation within
the supply chain. Blockchain can revolutionize a part by empowering end-to-end
traceability along the supply chain, the speed of item conveyance, coordination, and
financing. Blockchain can be an effective tool to kill abandons. Presently, it is time
for directors of different businesses to assess the potential of blockchain within the
supply chain for their trade. They ought to connect endeavors to create unused rules,
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A Conceptual Framework
test with diverse advances, run trials with changing blockchain stages, and make a
biological system with other companies.
In general, it can be said that blockchain benefits a lot from the network effect.
Once a critical mass is built up in a supply chain, it’s easier for others to jump
on board and reap the benefits. Companies can look to other stakeholders in the
supply chain and competitors to indicate the timing of development of a blockchain
prototype. The application of blockchain in the supply chain is one of the most
important applications of blockchain that will affect our daily lives.
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Chapter 9
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DOI: 10.4018/979-8-3693-0159-3.ch009
ABSTRACT
The logistics industry faces an adaptation process and is impacted by advances in
technology, just like other industries. For this adaptation process to be accomplished
correctly, the state of technology in today’s age must be accurately understood and
applied. Essentially, the concept of Logistics 5.0 refers to the methods in which
logistics is used in Industry 5.0. The notion needs to be taken seriously by both the
government (to offer incentives and opportunities for businesses to compete in this
area) and the private sector (to investigate current developments and ensure their
implementation in order to stay ahead of its competitors). The purpose of this research
is to introduce the concept of Logistics 5.0 and explain how it works, as well as to
inform the general public, executives in businesses, and academics on the subject.
The study compared Logistics 5.0 to Logistics 4.0 and explains the changes it made.
INTRODUCTION
Following the introduction of Industry 4.0, when Industry 4.0 applications were
realized, the idea of Industry 5.0 emerged, and numerous concepts were created (Xu et
al., 2021). A requirement for companies that want to survive in the logistics industry,
the notion of Logistics 5.0 has also been characterized as a component of the concept
Evaluation of Logistics
5.0 vs. Logistics 4.0
Esra Boz
KTO Karatay University, Turkey
Anderson Rogério Faia Pinto
University of Araraquara, Brazil
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Evaluation of Logistics 5.0 vs. Logistics 4.0
of Industry 5.0. Therefore, the applications in Logistics 5.0 aim to incorporate the
“human” factor into Logistics 4.0 processes. This new phenomenon, Logistics 5.0,
is very important. Because Logistics 5.0, the logistics of the future, must be used in
order to keep up with the rest of the world. In order to be sustainable and advance
their level of development, nations must react to Logistics 5.0 and include these
actions into their strategic plans. Countries must provide incentives to companies
and make an effort to encourage them in order to make this harmonization process
easier and faster. However, in order to determine how far these can be taken, it is
important to comprehend the organizations’ perceptions of Logistics 5.0.
In the literature, there are studies related to Logistics 5.0. Bolatan (2021) explains
the transactions from Logistics 4.0 to Logistics 5.0 in the study and clarifies the
Society 5.0. Trstenjak et al. (2022) develop the strategic plan based on a decision
support system to accurately implement the requirements and technologies of Logistics
5.0. The literature review is done in the other study whose results are that there are
a lot of gaps in the literature about Industry 5.0 in terms of supply chain (Frederico,
2021). Jafari et al. are doing bibliometric analysis about differences between Industry
4.0 and Industry 5.0 in terms of smart logistics in their study (Jafari et al., 2022).
Fornasiero and Zangiacomi propose new models for the supply chain to facilitate
adaptation to the new technologies of Industry 5.0 (Fornasiero and Zangiacomi,
2021). Karmaker et al. examine the challenges of applying Industry 5.0 in supply
chain interruption created because of the Covid 19 pandemic (Karmaker et al.
2023). Minculete et al. explain the Industry 5.0 based on the information society and
clarify the supply chain management 5.0 based on the past and the future economic
difficulties (Minculete et al, 2021). Nayeri et al. develop the decision support system
to examine the responsive supply chain 5.0 based on Industry 5.0 in the healthcare
system, therefore the responsive supply chain 5.0 is introduced in the study (Nayeri
et al. 2023a). Yuan et al. studied the supply chain innovation announcements on
shareholder value within the context of Industry 4.0 and Industry 5.0 (Yuan et al.,
2022). Varriale et al. examine the relationship between digital technology involving
3D printing, artificial intelligence, blockchain, computing, digital applications,
geospatial technologies, Internet of Things, immersive environments, open and crowd-
based platforms, proximity technologies and robotics and sustainable supply chain
management (Varriale et al. 2023). Nayeri et al. develop decision support systems
based on multi criteria decision making and mathematical modelling to decide the
selection of the new technologies of Industry 5.0 used in supply chain (Nayeri et al.
2023b). Chowdhury et al. discuss the challenges encountering in industrial systems
the transaction from supply chain 4.0 to supply chain 5.0 (Chowdhury et al. 2022).
As it can be seen, the studies in the literature have focused more on specific
issues and research, and there is no study that focuses only on the difference
between Logistics 4.0 and Logistics 5.0 and provides detailed explanations of the
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Evaluation of Logistics 5.0 vs. Logistics 4.0
development of the Logistics 5.0 perception, used technologies in the Logistics
5.0, and the understanding of their concepts about it. This study was done to fill
these gaps. The closest study to this paper is done by Chowdhury et al. However,
while the study focuses on only the challenges in the transition from supply chain
4.0 to supply chain 5.0, this study focuses on the general definition and content of
Logistics 5.0. By describing the scope of Logistics 5.0 in conjunction with Logistics
4.0, as well as the technology and procedures used in the logistics of the future, this
study intends to aid people and companies in understanding these processes. This
chapter is organized as follows: the impact of Industry 4.0 revolution on science
and the motivation and research gaps are explained in Section 1. In Section 2, the
concept of Logistics 5.0 and how it differs from Logistics 4.0 are discussed. Section
3 defines how Logistics 4.0 and Logistics 5.0 use technology. The conclusion and
suggestion for additional research are offered in Section 5, while the discussion is
presented in Section 4.
2. LOGISTICS 5.0 CONCEPT
Three main components comprise Logistics 5.0: human-robot interaction, green
logistics, and quality of life (Bolatan, 2021). The aims of Industry 4.0 concentrated
entirely on digitization and, in general, on removing the human element from
production (Yaşar and Ulusoy, 2019). However, it was recognized that there was
a need for people and that humans had to be involved in the process in some way
with the establishment of dark factories in this manner (Öztemel and Gürsey, 2020).
In order to incorporate humans in Industry 4.0, also known as Industry 5.0, new
processes began to be developed. Because of this, the first component is rised. That
is why the core of Logistics 5.0 is human and robot collaboration. Additionally, in
order to ensure sustainability in the modern world, logistical procedures must be
carried out in a green manner (Al-Minhas et al., 2020). Green logistics is thus a
second component of Logistics 5.0 (Trstenjak et al., 2022). Additionally, Logistics
5.0 prioritizes enhancing people’s quality of life by providing them with faster and
more reliable resources. These 3 components formed the basis for Logistics 5.0.
2.1. Human-Robot Interaction
Human-robot interactions were developed to use the ability of both human and robot
or cobot (Hentout et al., 2019). As seen in Figure, humans sent to intent, which is
what they want to do (Veselic et al., 2021). Then robots give the feedback based
on the intent, therefore; both contribute to the environment (Veselic et al., 2021).
According to Sheridan (2016); there are four areas of application i) robots perform
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Evaluation of Logistics 5.0 vs. Logistics 4.0
routine tasks- humans inspect the robots, ii) robots do nonroutine duties in dangerous
area or inaccessible environments instead of people iii) automated vehicles in which
the passenger is the humans, iiii) robots that provide entertainment, teaching, comfort,
and assistance. The role of humans varies according to these usage areas of robots. In
some, it controls remotely, in others it trades directly, but all the robots interact with
humans. Figure 1 demonstrates the interaction of “human-robot” in Logistics 5.0.
2.2. Green Logistics
While the aim of logistics was to reduce costs and increase profits in supply chain
activities, it has now turned into the concept of “green logistics” and its purpose has
been to consider environmental and social targets while trying to reduce costs and
increase profits (Seroka-Stolka, 2014). In other words, green logistics emphasizes
the suppression of the damage caused by logistics to the environment in the logistics
process and performs the purification of the logistics environment for the best use
of logistics resources (Zhang et al. 2020). Thus, while the costs are considered in
green logistics, it also contributes to sustainability. Green logistics is not related to
only greenhouse gas and carbon emissions, it comprises all the procedure from the
raw material until it delivers the customers (Bajdor, 2012). Green logistics include
measuring the environmental impact of different distribution strategies, reducing
Figure 1. Interaction of “human-robot” in Logistics 5.0
Source: Adapted from Veselic et al. (2021)
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Evaluation of Logistics 5.0 vs. Logistics 4.0
energy use in logistics activities, and managing waste reduction and treatment
(Sbihi and Eglese, 2010). Figure 2 demonstrates the interaction of “green logistics”
in Logistics 5.0.
Green logistics has influences on three dimensions: economy, society, and
environment. (Vienažindienė et al., 2021). In Particular, one of the most fundamental
causes of carbon emissions underlying problems such as global warming and
climate change is the use of fossil fuels (Özsoy, 2015). Because of this, logistics
and transportation have a large share in carbon emissions worldwide (Alım; Ercan,
2022). Therefore, environmental problems affect lots of logistical decisions in supply
chain management (Murphy; Poist, 2000). Green logistics has economic effects as
well as environmental effects. In other words, it makes the related product or service
more economical with the provision of green logistics conditions. In addition, in
some cases, this may seem the opposite in the short term, but long-term analyzes
always show that green logistics has a high economic contribution (Kumar, 2015;
Wang et al., 2013). Green logistics also has a social impact including the subject
of healthcare, security, equality, and access (Kutlu; Ercoşkun, 2021; Aldakhil et
al., 2018). In order for companies to fully implement green logistics, they need to
take decisions by considering these three factors, and they also need to implement
the practices required by green logistics. Some main green logistics practices
(Vienažindienė et al., 2021):
Figure 2. Interaction of “green logistics” in Logistics 5.0
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Evaluation of Logistics 5.0 vs. Logistics 4.0
Route optimization and warehousing processes
Use the alternative renewable energy
Obtain the recycle the waste
Use of the systems of information technology and e-document.
Evaluate and select to the partners according to environmental factors
Reducing the number of vehicles
Maximum place use
Application of innovative packaging technology
2.3. Quality of Life
Every product and service that makes people’s life more comfortable and reliable
is actually an Industry 5.0 product. Today, technology aims to increase the quality
of human life by enabling the use of robots instead of humans in jobs where people
will get tired and worn out or carry any risk for people. Products for this purpose
in logistics management appear as Logistics 5.0 products, for example driverless
vehicles, autonomous trucks, and robotic taxi. The production of this and similar
products is increasing with Industry 5.0 in order to eliminate situations such as death
and injury, fatigue and wear on people and for people to live a better-quality life.
3. UNDERSTANDING LOGISTICS 5.0
In this section, we clarify Logistics 5.0 by explaining the history of Logistics 5.0,
the difference between of Logistics 5.0 and Logistics 4.0, the used technologies,
and the difficulties to adapt to Logistics 5.0.
3.1. The History of Logistics 5.0
Industry 4.0 focuses more on new technology, dark factories, and smart systems, but
it pays less attention to human aspects and society (Jafari et al., 2022). Indeed, the
concept of Society 5.0 was introduced by Japanese governments due to the concern
of not focusing on people in technology transitions, and this concept was used to
include people in the advanced technology used (Fukuda, 2020). Therefore, the
concerns of people and society in the industrial transition led to the emergence of
Industry 5.0 (Jafari et al., 2022). Thus, new solutions have begun to be turned to the
benefit of society and people and the period is dubbed as Industry 5.0. Historical
development of Logistics is given in Figure 3.
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Evaluation of Logistics 5.0 vs. Logistics 4.0
Figure 3 shows that Logistics 1.0 stemmed from the Industry 1.0 and in this term
mechanization of transport emerged. In terms of transportation, humans started
to use steamers/aircraft ships rather than animal forces. Then, in the Logistics 2.0
term, automation of handling systems was started to use thanks to electric power
and mass production. After, Logistics 3.0 was developed by force of computers and
information technologies, therefore warehouse management system and transport
management systems were developed, and logistics management system was
mechanization. Afterward, Logistics 4.0 emerged thanks to the internet of things and
artificial intelligence. It is a system that reflects sustainability to personal customer
demands without any cost increase and at the same time develops them by using up-
to-date technologies in logistics (Winkelhaus; Grosse, 2020). Logistics 5.0, which
is an extension of Logistics 4.0, covers the applications of Industry 5.0 in supply
chain management, and it focuses on the symbiotic of the human and technology.
3.2. The Differences Between Logistics 4.0 and Logistics 5.0
Industry 5.0 is not a radical technological revolution compared to Industry 4.0 (Jafari
et al., 2022). Actually, it is the extent of Industry 4.0 (Jafari et al., 2022). Because
of this, the differences between Logistics 4.0 and Logistics 5.0 are not very clear.
Both serve fundamentally to human, and society; but there is a fine distinction.
The difference is that Logistics 5.0 focuses more on environment and human and
excessive personalized order. For example, an autonomous vehicle (electric vehicle)
is the product of Logistics 5.0. Because the aims of the product are to diminish
Figure 3. Historical development of logistics
Source: Adapted from Wang (2016)
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Evaluation of Logistics 5.0 vs. Logistics 4.0
the risk of wounding and dead the human, annihilate the fatigue occurring while
driving the car, and preserve the environment by cutting up the greenhouse gas and
carbon emissions.
3.3. The Used Technologies in Logistics 5.0
There are several technologies developed in Industry 5.0 including big data analytics,
edge computing, artificial intelligence, cobots, 6G, digital twins, blockchain, internet
of things as given in Figure (Xu et al. 2021; Maddikunta et al. 2022). Figure 4
summarizes the key enabling technologies of Industry 5.0.
Figure 4. Key enabling technologies of Industry 5.0
Source: Adapted from Maddikunta et al. (2016)
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Evaluation of Logistics 5.0 vs. Logistics 4.0
Big Data Analytics: Big data includes the mass of structured or unstructured
data has been commonly characterized in the literature by 6V–velocity, volume,
variability, veracity, variety, velocity (Mishra et al. 2018; Jahani et al. 2023). Big
data analytics involves the data analysis techniques using extract from different
sources and different formats (Choi et al., 2018), and it makes the unstructured data
meaningful. Examples of the use of big data in logistics processes: By analyzing
the products that customers want, investments and policies related to the logistics
processes of these products can be made, changes can be made in products and
customers with big data to reduce logistics costs during product distribution.
Edge Computing: Edge computing’s downlink data represents cloud service,
uplink data represents Internet of Everything, and edge computing edge means
random computing and network resources between data source and cloud computing
center’s path (Satyanarayanan, 2017). It is a new computing model that combines
near-user resources at geographic or network distance to provide compute, storage,
and network service for applications (Zhao, 2018; Cao et al., 2020). Edge computing
has been proposed in some studies to streamline the process of unmanned aerial
vehicle deployment and to secure data on delivery (Li et al., 2022).
Artificial Intelligence: Artificial intelligence is a central component of Industry 5.0
and is geared towards automating manufacturing processes in general; it is also the
primary focus of cooperation between man and machine (Akundi, 2020; Jeyaraman
et al., 2022). It plays an important role in today’s manufacturing (Ulusoy et al.,
2019). Thanks to artificial intelligence, options such as autonomous vehicles, robots
used in storage and shelves are applied in the logistics sector (Aylak et al., 2021).
Cobots: Cobots consist of the words collaborative and robot. Therefore, according
to Figure 5, Cobots work with humans and they provide many benefits in terms of
productivity, ergonomics, and quality in the process (Pizoń et al., 2022). Cobots are
not programmable machines, but they can sense and understand human presence
(Maddikunta et al., 2022). Cobots can be used in many applications in logistics
processes such as material handling, assembly of materials, packaging, quality
control, transportation, delivery of products to customers and receiving returned
products from customers (Maddikunta et al. 2022).
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Evaluation of Logistics 5.0 vs. Logistics 4.0
6G and Beyond: 6G comes after 5G technology and is a network technology
that can provide high capacity and low latency. The 6G framework is an informed
network, comprehensive usability, holographic network, and ubiquitous network
(Basu et al. 2022; Adel 2022).
Digital twins: A digital twin is the creation of a real entity in a digital environment
by accurately simulating it. This structure created in the digital environment represents
the structure in the real environment and can perform functions such as monitoring,
simulation, forecasting, optimization (Boyes; Watson, 2022). It is used in many fields
such as general logistics, e-logistics, cold chain logistics, military logistics (Zhu
et al., 2023). For example, it helps in monitoring resources and making strategic
decisions in military logistics (Zhu et al., 2023). A material is created in a digital
environment and after the real data is continuously transferred, measurements such
as the life of the material, wear, and accident rates can be made on the digital twin.
Blockchain: Blockchain is a database used for storage in a decentralized network
(Zheng et al., 2018). In addition, a blockchain provides integrity-protected data
storage and allows for process transparency (Wüst; Gervais, 2018). It is triggering a
large number of projects in different industries (Nofer et al., 2017). Blockchains can
also be used in transportation and logistics (Pournader et al., 2020). For example, an
RFID tracking device in a buyer’s warehouse is directly connected to the blockchain,
where data can automatically appear, and payment information and contracts can
Figure 5. Illustrative example of Cobots
Source: Taesi et al. (2023)
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Evaluation of Logistics 5.0 vs. Logistics 4.0
be created automatically as soon as products are delivered (Pournader et al., 2020).
Thus, data and processes are controlled by the relevant parties.
Internet of Things: The Internet of things is a superset of the internet of things
(Deshpande; Iyer, 2017). The networked connection of people, processes, data
and things, and the increasing value as “everything” joins the network (Miraz et
al., 2015). It is built upon the “four pillars” of people, data, process, and things
(Miraz et al., 2015). It brings people, processes, data, and things together so that
it can generate new capabilities and data (Deshpande; Iyer, 2017). Actually, it is
fundamental to big data analytics, cyber-physical inter connectivity, and artificial
intelligence, moreover; can be used for space optimization, environment monitoring
and process management in logistics processes, and smart storage (Wu et al., 2023;
Trab et al., 2018).
3.4. The Difficulties to Adapt to Logistics 5.0
The difficulties and opportunities experienced in the transition from Industry 4.0 to
Industry 5.0 are in general parallel with the difficulties and opportunities experienced
in the transition from Logistics 4.0 to Logistics 5.0. In fact, it can be said that these
processes are similar to the difficulties and opportunities of integrating into a
completely new system. Because, in the transition from Logistics 4.0 to Logistics 5.0,
some products and systems need to be changed to a certain extent, and problems such
as resistance to change, inability to adapt, and rejection of change may arise. There
are some studies in the literature to understand these problems (see: Chowdhury et
al. 2022; Salimova et al. 2019; Demir et al. 2019; Hamdani et al. 2019; Paschek et
al. 2022; Gagnidze 2023; Adel 2022). In addition, in the study of Demir et al., the
issues related to robots are classified as follows (Demir et al., 2019):
Evaluation in organizational behavior
Acceptance of robots in the workplace
Evaluation in organizational structures and workflows
Evaluation in work ethics
Discrimination against robots or people
Privacy and trust in a human-robot collaborative work environment
Education and training
Redesign of workplaces for robots
In order to comply with Logistics 5.0, some difficulties arise regarding the issues
given above. Some of these difficulties are listed below:
Setup costs and setup time: Since Logistics 5.0 products are technology-based
products, they require an investment cost before being used and transitioned.
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Evaluation of Logistics 5.0 vs. Logistics 4.0
Replacing the machines that companies use and the processes they apply with new
ones can be seen as a waste of both time and cost for them in the short run. Even if
this is not the case in the long run, adapting to Logistics 5.0 processes and products
at the beginning may be perceived as a loss for companies in the short term. The
most basic and simplest challenge is the initial investment cost of this adaptation
process and the time it takes to get used to these innovations (Chowdhury et al.
2022; Salimova et al., 2019).
The difficulties working with robots: Since the logistics 5.0 era is a time when
robots and humans will work together, humans must be able to adapt to this unity.
However, during the adaptation process, problems such as people not being prepared
for this psychology, ethical gaps in the difficulties experienced, and the fact that the
legal regulations of robots have not been realized yet may occur (Demir et al., 2019).
Dynamics of information technology departments: Information technology
departments in companies need to deal with the necessity of robots and machines
required for Logistics 5.0 (Demir et al., 2019; Hamdani et al., 2019). The requirement,
updating and maintenance needs of the machines to be used must be met by this
unit. Therefore, information technology departments are expected to follow the
constantly updated technology, adapt and be sustainable in this regard.
Lack of government policies and support: Especially small and medium-sized
companies may be suffering from both material and moral deficiencies for the
transition to logistics 5.0 practices and policies (Hamdani et al., 2019). Therefore,
this transition will be facilitated if government regulations and support in this regard
encourage them. However, if this support and regulation is lacking, the transition
will be very difficult and slow.
4. DISCUSSION
The use of the steam engine in the 18th century is shown as the development that
caused the 1st Industrial Revolution, while the preference of electricity in mass
production is seen as the beginning of the 2nd Industrial Revolution (Klingenberg
et al. 2022; Kurt 2019). Information technologies and electronic systems, which
allow automation to become widespread in manufacturing, formed the basis of the
3rd Industrial Revolution in the 1970s (Bauer et al., 2014; Özçelik et al. 2022). The
foundation of the 4th industrial revolution started with the development of technology
for the creation of objects equipped with sensors and smart control units, such as
machines, plants or products, that enable objects to communicate with each other
(Lukac, 2015). The 5th industrial revolution is cyber-physical systems and it aims
to create human-machine cooperation based on sustainability (Leng et al. 2022;
Pizoń and Gola 2023).
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Evaluation of Logistics 5.0 vs. Logistics 4.0
All of these revolutions have brought with them a series of innovations and these
innovations affect every sector as they are generally technological developments (Kurt
2019; Morrar et al. 2017; Brynjolfsson and McAfee 2011). The field of logistics
was also affected by these developments and experienced various innovations in
the history of industrial revolutions (Delfmann et al. 2018; Cimini et al. 2020).
For example, with the invention of the steam engine in 1st Industrial Revolution,
railway networks were developed and the foundations of air transportation were
laid (Gerhátová et al. 2021).
Industry-based findings were also reflected in the transition from Logistics 4.0
to Logistics 5.0. In other words, human-robot collaboration has started to be used in
this field as well (Cimini et al. 2020; Jafari et al., 2022). Thus, robots (cobots) that
work with humans in storage and transportation have been developed and put into
use for better quality management of processes. The main purpose of human-robot
interaction is based on the operation of robots in jobs where people will get tired
and there is a risk of death and injury to people (Gervasi et al. 2020). Thus, robots
do not perform the tasks completely, instead these robots are managed by humans
and try to understand people’s feelings, thoughts and demands (Nahavandi 2019).
Thus, the basis of robots that can analyze the risk of the consequences of events that
people think about in the near future, realize these events instantly or explain the
reason to people by rejecting their thoughts, has begun to be laid in this era. The end
point of human-robot interaction that we can predict is the production of robots that
act with human thought or feeling. Autonomous robots have formed this foundation.
In addition, in order to ensure sustainability in super smart societies, the concept
of green logistics came to the fore with Logistics 5.0, and this concept, whose
foundations were laid in Logistics 4.0, began to be fully implemented in Logistics
5.0 (Jafari et al., 2022; Trstenjak et al. 2023). Thus, sustainability, which is one of
the objectives of the Industry 5.0 process, has also been reflected in the logistics
processes in this way (Jafari et al., 2022; Trstenjak et al. 2023). Green logistics;
covers activities such as green purchasing, green production, green distribution, green
reverse logistics, green packaging (Yildiz Çankaya and Sezen 2019). Accordingly,
sustainability rules and control are applied and continuity is ensured starting from
the supply of the raw material (Akbal 2022). Many green-friendly practices such
as reducing the carbon footprint to increase energy efficiency, adopting alternative
and effective transportation techniques, and choosing environmentally friendly
vehicles in transportation are important practices for sustainability in the field of
logistics (Akbal 2022).
Some concerns were expressed in some studies in the Industry 4.0 process (Yaşar
and Ulusoy, 2019; Badri et al.2018; da Silva et al. 2020; Tang and Veelenturf 2019).
One of these concerns is technological unemployment (Yaşar and Ulusoy, 2019;
Kuzior 2022). However, with the advent of Industry 5.0, this concern has largely
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Evaluation of Logistics 5.0 vs. Logistics 4.0
disappeared. Because in Industry 5.0, since robots are working with humans, their
human duties do not completely disappear, instead they are partially reduced.
5. CONCLUSION
Logistics 5.0 is not a conceptually groundbreaking revolutionary movement. Instead,
it is a qualified process that continues by making up-to-date additions to Logistics
4.0. However, in order to adapt to this process today, first of all, the concept of
Logistics 5.0 should be understood, and the innovations brought by this concept
should be known. This study was built on this requirement. Therefore, in this study,
we clarify the Logistics 5.0 concept by explaining the differences between Logistics
5.0, the difficulties to adapt, the used technologies, and the history.
This study examined the Industry 5.0 concept only in terms of Logistics 5.0.
Therefore, the reflections of Industry 5.0 in other sectors have not been analyzed.
This is the first limitation of this study. The second limitation is that the measurement
characteristics of the compliance process to Logistics 5.0 are not given, only the
definitions and sample applications necessary for understanding the concept of
Logistics 5.0 are given.
It is aimed that this study will form a basis for future studies. As a continuation
of this study, the measurements of the compliance process to Logistics 5.0 can be
analyzed, a road map can be determined by analyzing the steps in the harmonization
process for companies and countries. In addition, new technologies developed,
perceptions of people or companies in this process, incentives and opportunities of
governments on Logistics 5.0 can be analyzed and compared with previous processes.
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Chapter 10
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DOI: 10.4018/979-8-3693-0159-3.ch010
ABSTRACT
The integration of advanced technologies into the various components of the supply
chain is what makes up a digital supply chain. By harnessing the power of digital,
companies gain valuable insights into the roles and relationships of each participant,
leading to an evolution of the entire network. Today, digital is an integral part of
modern supply networks and industries. In this chapter, the authors dive into the
world of digital supply chains and explore how advanced technologies are shaping the
logistics industry. They examine the evolution of supply chain digitalisation and its
importance to modern businesses. They also look at the role of data analytics and its
impact on improving supply chain performance. Finally, they present the application
of a selected data analysis method to the database of the logistics department of an
international industrial company to better understand its current state.
INTRODUCTION
To be successful in business, large organizations need to manage their supply chains
as well as they can. In fact, the supply chain is the series of events and steps that
occur between a company or organization and its employees or partners to acquire
Leveraging Digital Data
for Optimizing Supply
Chain Performance
Mohamed Salim Amri Sakhri
https://orcid.org/0000-0002-7814-6443
VPNC Laboratory, Faculty of Law, Economics, and Management Sciences of
Jendouba, Tunisia
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Leveraging Digital Data for Optimizing Supply Chain Performance
raw materials or inputs that are used to make finished or semi-finished products. It
can also be defined as the links between producers and consumers that ensure the
right products get to the right people, at the right time and under the right conditions.
This can involve a wide range of activities, from sourcing raw materials to processing
them into finished products and packaging them for sale (Ramzan et al., 2021).
Recently, a new concept has emerged to support and evolve the traditional supply
chain: the Digital Supply Chain (DSC). This phenomenon consists of an inventory,
order and delivery management system that uses technology to streamline processes
and increase efficiency. The term DSC comes from the idea that companies need to
be able to combine data, AI, and software to add value and look to the future and
the business of tomorrow (Ghadge et al., 2020). DSC was first introduced in the
1970s with the advanced automation of production using electronics, computers, and
industrial robotics. It then evolved, especially from the 1990s onwards, to include
information systems and the use of digital technology (Lee et al., 2022).
The digital supply chain has brought many benefits to companies. It has increased
company profits by reducing the costs associated with inventory management and
shipping (Amri Sakhri et al., 2022). It has also saved companies time by eliminating
the need to manage outdated information about the availability or location of their
product at any given time, thus avoiding lost sales or overstocking. DSC is also more
accurate because it tracks inventory at every stage of its lifecycle, from the time it
enters the system to the time it leaves, and uses real-time data to make adjustments
as needed (Lee et al., 2022).
Digitalization is a major advantage for companies to control their data flows and
encourages the use of innovative methods to collect, transform and analyze data from
different sources. An increasing number of industries are using digital technology
to harness their industrial data, analyze it, identify strengths and weaknesses in
their supply chain and take appropriate action. These can now be found in the
pharmaceutical, manufacturing, food, chemical, engineering, and automotive
sectors (Kumar et al., 2022; Lee et al., 2022; Peng et al., 2022). These companies
use these practices to gain a deeper understanding of their internal and external
environments, enabling them to adapt quickly to changing market dynamics. Our
research is driven by a desire to apply data-driven techniques to identify and solve
supply chain problems. This new approach to data analysis harnesses the power of
technology to identify and address challenges across a wide range of industries. We
want to apply it to show how it can be used from the implementation of different
technological systems capable of collecting and processing data, to transform the data
into relevant information capable of avoiding problems such as waste in industries.
In this article, we aim to explore the evolution of supply chain digitalization and
highlight its centrality to today’s businesses. We will study the profound impact of
data analytics on improving supply chain efficiency. Our exploration will encompass
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Leveraging Digital Data for Optimizing Supply Chain Performance
the complex process of data analysis, with a particular focus on the well-established
and widely recognized approach known as Exploratory Data Analysis (EDA). In
this context, we will carry out an analysis of data generated by different computer
systems of the logistics department of SAGEMCom Tunisia. We will also use data
visualization techniques to identify existing inefficiencies in their services. Finally,
we will make recommendations for the implementation of a corrective strategy to
reduce the losses generated by this department.
The rest of this paper is structured as follows. The next section begins with
a literature review, focusing on the body of research that has contributed to the
development of the DSC concept. In the third section, we will explain the data
analysis methodology used in our study. In the fourth section, we present the data
collected by SAGEMCom Tunisia on its transport and supply services. We examine
it using visualization tools to extract as much information as possible about the
physical and monetary flows associated with this department. Finally, we will make
recommendations to improve the performance of their supply chain. In the final
section, we will summarize our findings and present our conclusions.
LITERATURE REVIEW
Several researchers have invested in the study of the DSC concept. They have defined
its fundamentals, characteristics, and functionalities. Other researchers have used
it directly to take advantage of its benefits. In this section, we will present the most
recent and interesting research on DSC, to see the vision of researchers in this field
and the progress made so far.
Farhani et al. (Poorya, 2017) stated that supply chains are composed of various
activities that start with the acquisition of raw materials, the transformation of these
materials into finished products, the storage of these materials as finished goods
inventory, and finally the delivery to the final customers. They also defined the
dimensions of DSC, which are mainly:
Digital Performance Measurement: These are the key performance metrics to ensure
that all digital spend and investments are delivering improved performance,
Digital IT and Technology: These are the digital devices, systems and resources
that enable the creation, storage, and management of data,
Digital Human Resources: It is about optimizing HR processes by using social,
mobile, analytics and cloud technologies to make them more effective, efficient,
and connected,
Digital Suppliers: Implementing a digital supplier management strategy to create
an opportunity and need to deepen their relationships with customers,
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Digital Manufacturing System: This is the use of an integrated and collaborative
computer system to simultaneously create product and manufacturing process
definitions,
Digital Inventory and Logistics: These are digital technologies used to improve
inventory management, enhance logistics processes, and accelerate the execution
of industrial and commercial activities,
Digital customers: Customers who use digital channels and platforms to consume
content, engage with brands and complete a transaction.
Büyüközkan and Göçer (2018) defined the supply chain as a complex set of
activities that need to be coordinated and monitored. They concluded that digitalization
is necessary for the development of supply chains that offer both flexibility and
efficiency. They pointed out that digital solutions are redefining traditional supply
chains and that there are distinct characteristics associated with virtually all DSCs.
They identified eleven key characteristics that DSC aims to achieve, which are:
Speed: The ability to respond quickly to demand will be one of the key pillars of a
DSC as organizations look for new ways to deliver products quickly.
Flexibility: The digitization of supply chains implies the need for operational agility
with the ability to adapt to changing circumstances.
Global connectivity: The DSC has built efficient global hubs through the Internet
to deliver goods and services around the world.
Real-time inventory: The DSC makes inventory management more efficient and
continuously monitors inventory levels with digital tools and advanced analytical
capabilities to forecast future demand or contingencies.
Intelligent: DSC encompasses next-generation technologies that are based on
intelligent systems and agents with computing power and using sophisticated
algorithms that enable better decision-making, automated execution, and
operational innovation.
Transparency: DSC enables companies to act transparently, i.e., to have visibility into
the operation of all links in the chain and to be better prepared for disruptions
by anticipating, modeling the network, creating what-if scenarios, and instantly
adjusting the chain to changing conditions.
Cost-effectiveness: Digital technologies make it possible to control and significantly
reduce costs in almost every segment of the supply chain.
Scalability: When traditional supply chains are integrated with digitization, scalability
becomes less of an issue as it facilitates process optimization and duplication,
as well as anomaly and error detection.
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Innovative: Rapidly evolving technologies are driving logistics managers to look for
new ways to integrate these innovations into processes to remain competitive
and ensure supply chain excellence.
Proactive: The DSC imposes preventive actions to anticipate potential disruptions,
an efficient analytical framework and operational intelligence make it possible
to satisfy digital users.
Eco-friendly: Supply chains have a certain level of environmental impact. The new
generation of DSC may be able to extend the capabilities of green processes.
Ageron et al. (2020) defined the DSC configuration as a digital supply network
structure. According to them, the DSC is a dynamic system that relies on information
technology to integrate supply chain activities to smooth material flows and tends
to achieve better communication and interaction between partner companies in the
supply chain. This configuration depends on the objectives and strategies of the
organization. It provides greater visibility of material flows throughout the value
chain and provides real-time information to make accurate and timely decisions that
support the organization’s performance goals. They also asserted that technologies
such as the Internet of Things (IoT), AI and expert systems, machine learning,
robotics and mega data analytics are strategic enablers for DSC implementation.
They concluded that digitalization leads to design process optimization, product
optimization, planning and inventory efficiency, risk management, supplier
collaboration, operational efficiency, logistics optimization, sales optimization,
and after-sales service.
Iddris (2018) studied the concept of DSC and in his work identified the
technological factors conducive to DSC. These technological factors are mainly:
Big data analytics: It allows companies to collect large amounts of data from videos,
tweets, click streams and other sources. It is the application of advanced statistics
to any type of stored electronic communication to extract useful information
for the business.
Cloud computing: These are two applications delivered as web services that
synchronize supply chain management with an organization’s IT system. This
contributes to the scalability, cost reduction, accessibility, and efficiency of
supply chain operations.
3D Printing or Direct Digital Manufacturing: 3D printing is the use of additive
manufacturing-based technologies to print objects by fusing a variety of
materials with a laser.
Drones: These are unmanned aerial vehicles that can be used in the supply chain.
The advantage of using drones is that they can capture aerial data more easily
and quickly than humans.
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Leveraging Digital Data for Optimizing Supply Chain Performance
Mobile applications: These are software applications designed to run on a smartphone
or tablet to improve supply chain operations. These mobile applications facilitate
the generation of real-time information that reduces inventory and can lead to
revenue growth for the provider company.
Agrawal and Narain (2018) set up a digital supply chain framework and highlighted
the opportunities and challenges faced by DSCs. They provided a roadmap for
digital transformation of the entire organization, including its products, services
and the interaction of partners, suppliers, and customers with their business. They
also provided guidance for companies with a digital business model, both for early
entry as digital natives and for later adoption as digital migrants. They also defined
the entire industrial and commercial digitization architecture as digital planning.
They proposed the creation of a business network and the adoption of a common
vision to bring together their key business partners on a platform to create an easy
interaction point to ensure an effective digital business model.
Many researchers have developed powerful programs and algorithms that can
optimize various aspects of supply chain management. Their work has covered a
range of activities from optimizing delivery route management and replenishment
(Amri Sakhri, 2022), inventory management (Amri Sakhri & Tlili, 2015), production
management, resource allocation, sequencing, or even overall supply chain
management (Haddad et al., 2002). Other researchers have explored ways to improve
firms’ competitive advantage even under uncertain conditions (Rasi et al., 2022).
Their work has laid the foundations for significant advances in the understanding
and application of concepts such as digital supply chain management, considering
the challenges of uncertainty, resources, and competition.
In this section, we have outlined the most interesting research that has been
conducted to date to define and develop the concept of DSC. In the next section,
we will discuss the data analysis process that we will then use in our case study.
DATA ANALYSIS METHOD
The digitization of the supply chain has enabled the acquisition of a large amount of
data that can play an important role in understanding the current state of the supply
chain and predicting its future evolution. In order to extract this information and
knowledge from this data, a comprehensive data analysis process must be implemented.
The process of data analysis involves the collection, review, and analysis of data
from multiple sources to reach one or more conclusions and enable better decision
making. Among data analysis methods, exploratory data analysis (EDA) is the most
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Leveraging Digital Data for Optimizing Supply Chain Performance
widely used today (Sahoo et al., 2019). We will explore this method and its working
processes. Figure 1 illustrates the steps in the data analysis process outlined above.
To better understand how EDA works, we will briefly describe its various
components.
Data exploration: This is the data mining step. It consists of identifying the content
and characteristics of all the data collected from different sources. It is important
that the available data sources are reliable and correctly structured so that the
imported data is of the best possible quality. Through this step we will have
access to the size of the data, we will know the missing values of the data and we
will be able to find the possible relationship between the data and their visuals.
Data cleaning: The aim of this step is to create a better-quality database. This
step consists of checking the raw data, detecting corrupted data, cleaning,
and eliminating them if they are of poor quality (redundant, incomplete, or
incorrect), replacing them with other calculated values if they can lead to relevant
information, and then proceeding with validation. Data can also be structured.
Model building: This step is the transformation of the data. It starts by importing the
data into its destination (e.g., a system...) and then converting it into a format
supported by that destination. The imported raw data is then processed in the
system to be interpreted. In fact, statistical and/or machine learning models
are applied to describe the variable and its operation. Finally, this data is
transformed into visual data that can be perceived using the model.
Presenting the result: This final step makes the data usable. It is converted into a more
readable format (graphs, tables, etc.) and usually presented in a visualization
that is easy to understand and use. In fact, these visualizations do not just
communicate information or facts, but create, evaluate, and communicate
ideas, experiences, expectations, and perspectives.
Figure 1. Exploratory data analysis process
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In this section, we have defined the data analysis process that we are going to
adopt, and we have also described the steps of the data manipulation process in
order to obtain usable results and valuable information for companies. In the next
section, we will put these different steps into practice by applying them to real data
that we had from the company SAGEMCom Tunisia.
CASE STUDY: SUPPLY PROBLEM AT SAGEMCOM TUNISIA
In this section, we will use the EDA method to demonstrate the effectiveness of data
analysis in identifying supply chain dysfunctions from data generated by several
services of a real international company based in Tunisia. Indeed, the case study
is often used as a tool for exploratory research, highlighting the need for further
investment to investigate a problem. According to Crowe et al. (2011), the case
study represents a research approach that is able to generate a deep and multifaceted
understanding of a complex issue in its real-world context.
Framing the Work Environment
For this work, we have chosen the company SAGEMCom Tunisia, a French industrial
group specialized in information technology and communications for broadband
markets. SAGEMCom Tunisia is a limited liability company (SARL) created in
December 2002 and started production on 1 January 2013. It is located in Borj
Ghorbel, Ben Arous, Tunisia. It is now the Group’s first production site in the world
and the main Euro-Mediterranean center for electronics. The subsidiary develops
and manufactures a wide range of products and systems in the fields of electronics,
telecommunications and digital information processing and transmission.
Logistics is omnipresent in this subsidiary, and logistical activities are involved
in the various stages of the supply chain process. SAGEMCom Tunisia’s logistics
department manages three services: purchasing, supply and transport. In this work,
we have chosen to analyze the data relating to the logistics department and, more
specifically, to the supply and transport services, in order to gain visibility of the
material flow through the data generated by the systems of these two services. In
fact, these two services are very important in the company’s activity because they
are a source of costs if they are not well managed. Here is the link to the logistics
department database for the year 2021 that we used in our study: https://vu.fr/pHjB.
We are going to use EDA, which allows the data to be interpreted in both rows
and columns. We chose Python to analyze the data we collected. It is an object-
oriented, interpreted, and interactive programming language (Sahoo et al., 2019).
This programming language has matured and stable basic numerical libraries such
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Leveraging Digital Data for Optimizing Supply Chain Performance
as Pandas for manipulating numerical vectors, time series and data analysis, and
NumPy for manipulating matrices or multidimensional arrays and mathematical
functions that operate on them. In addition, Matplotlib, Seaborn and other libraries
integrated into the Jupyter Notebook platform provide an interactive research and
development environment with data visualization suitable for most users. The quality
of the documentation and the availability of base distributions have done much to
make Python accessible and useful to a wide audience.
Results Analysis
We will start by analyzing the data of the transport service in order to know its
importance and performance. This step will allow us to have a global vision of the
materials ordered by the company, their frequency, which type of transport is most
used, the costs generated by this service, which will allow us to detect if there are
problems in this service and thus go back to their sources.
In the Figure 2, we analyze the status of the transport service, the quantities
generated by each mode of transport and the importance of each mode in terms of
the costs involved. The bar chart below shows the annual frequency of deliveries
associated with the transport service by mode and the annual costs associated with
each type of delivery. The orange area of the bars represents the frequency and
cost of using the express mode and the blue area of the bars relates to the standard
delivery mode.
Figure 2. Annual shipping costs and quantities by transportation mode
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Figure 2 shows that the transport service uses two modes of delivery. The first
is the standard mode, which represents the daily delivery of raw materials. The
second is the express mode, which is a recourse mode when the company is faced
with an unexpected situation. Figure 2 shows that the standard mode is the most
frequently used mode compared to the express mode. Figure 2 also illustrates the
bifurcation that results from the additional cost of express delivery. The use of the
express mode represents 14% of the total annual transport, this mode generates a
significant cost of about 27.71% of the total annual transport cost.
In fact, the economic price of using express delivery (unit price in euros 0.61)
is more than double that of standard delivery (unit price in euros 0.26), which is
why the company should use it only in urgent and unforeseen cases, trying to avoid
it as much as possible to guarantee the efficiency of the transport service. Figure 3
examines the distribution of express shipments by month in order to determine the
frequency of use of this mode and the period during which it is most frequently used.
The histogram in Figure 3 reveals that express delivery is used frequently and
every month, which causes the company to spend more money on these express
deliveries every month. This shows that the company’s transport service is exposed
to problems of wastage in terms of transport costs, which is notable because of the
frequent use of an expensive mode of transport that generates additional costs for
the company, and this is a direct result of poor planning of raw material procurement
carried out in other internal logistics services of the company. The company therefore
needs to understand the impact of these practices on the overall performance of its
supply chain and take corrective action to avoid these economic losses.
Figure 3. Number of express orders per month
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To find the source of the problem, a deeper study of the data must be carried
out to identify the product(s) that most frequently use express delivery and the
departments responsible for their orders, to review their procurement strategies and
take corrective action. In order to adjust shipments and avoid financial losses, we first
studied the components of express shipments to identify the most ordered item(s)
in monthly express shipments. We also selected raw materials to study those that
generate more than 50 shipments per year. The histogram in Figure 4 shows that,
according to the number of references for each order, five item references have a
high frequency of monthly express shipments, two of which are present with more
than 100 shipments per year. This implies a rapid intervention to identify internally
the causes and sources of these orders.
We will now examine the reasons for these shipments from the sources of order
generation. Figure 5 illustrates the different departments involved in the generation
of express orders.
Figure 4. Quantity of products using the most express mode
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Leveraging Digital Data for Optimizing Supply Chain Performance
According to the histogram in Figure 5, the most obvious reason for these rush
orders is related to the production department “Pole”. This tells us that materials
are ordered during the production process due to poor planning of the necessary
quantities of raw materials and that the quantities received in standard mode are
not sufficient and may lead to an early stop of production, which implies the use of
express mode to avoid stockouts. The second reason relates to the QM1 department,
which is responsible for quality control of the raw materials entering production.
In fact, some of the raw materials needed for production are stored in the
warehouse to be checked by the quality control team. This leads to problems in
getting stock into production on time, and problems with some components lead
to new stock being ordered to compensate for components that do not meet the
company’s quality standards. Other rush orders are placed with the Logistics and
Relay departments. These orders are negligible as they represent 202 orders out of
the 6139 orders generated annually by the two departments mentioned above (less
than 3.5% of the total orders).
Based on the results obtained, we will look at the Pole department, which generates
more than 70% of express orders, and take a closer look at the stores that make the
most use of express delivery.
Figure 5. Express orders by department
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Leveraging Digital Data for Optimizing Supply Chain Performance
Figure 6 reveals that five shops are responsible for orders from references that
require the use of express transport. The VIC shop is in the lead with more than
3,000 orders delivered by express transport. It is followed by PVE and AQF with a
frequency of more than 1,000 express orders per year. CO3 also receives materials
for production by express delivery with a frequency of around 500 orders per year,
and GVN comes last with a negligible frequency of less than 100 orders delivered
by express delivery per year. From Figure 6, we can identify the sources of express
deliveries. It will now be easy to understand, correct and effectively reduce this
number.
It can be concluded that there is a major supply problem, which makes the available
stock of raw materials insufficient to maintain the production cycle and requires a
revision of the company’s replenishment policy. This is because the company operates
on a ‘pull’ basis, where supply follows customer orders. Such a flow structure requires
a precise replenishment policy rather than random or historical replenishment. A
replenishment policy based on tracking raw material consumption is more effective
in this type of industry. Similarly, the use of advanced order forecasting techniques,
such as machine learning or artificial intelligence methods, can help predict stock-
outs that may occur during the planned production process.
Figure 6. Express orders by location (store)
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CONCLUSION
Today we live in an age where companies have access not only to their own data,
but also to data from other companies and organizations around them, and even to
public documents such as census surveys or government economic reports and can
use this information as part of their decision-making process when planning how
best to serve their customers. In this article, we have first discussed the concept
of DSC. Then we explained what data analysis is and the most common methods
for performing it. And finally, we looked at a practical case where we used supply
chain data from an international company to understand their current state based
on the information we extracted and to make recommendations on how to address
their problems.
ACKNOWLEDGMENT
The database was collected by the SAGEMCom Tunisia Transport Service. The
authors would like to thank the staff of the Logistics Department for their help.
Special thanks to Mr. Elyes Badri: Logistics Responsible, SAGEMCom Tunisia.
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Copyright © 2024, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited.
Chapter 11
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DOI: 10.4018/979-8-3693-0159-3.ch011
ABSTRACT
Environmental issues emerge along with the development of firm performance, and
it is a challenge to the business world. The aim of this study is to investigate the
impact of green supply chain management (GSCM) practices on firm performance.
In addition, this study also examined the role of green innovation in between GSCM
and firm performance. The data is collected from 369 participants across 123
multinational corporations (MNCs) operating in Pakistan through purposive sampling
technique. SmartPLS is employed to analyze the data. The results reveal that GSCM
has positive and significant impact on green innovation and firm performance.
Moreover, green innovation mediates the relationship between GSCM and firm
performance. Researchers, practitioners, and industry leaders, while designing their
environmental policies to experience the comparative benefits for both business and
society, can use this influence of environmentally friendly practices.
Resist With Traditional
or Promoting Green:
How Innovation Stimulates Firms’ Supply
Chain Management Performance
Shahid Khalil
Malaysia University of Science and Technology, Malaysia
Seyed Mohammadreza Ghadiri
Malaysia University of Science and Technology, Malyasia
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INTRODUCTION
Environmental challenges arise following the growth of a company’s performance,
creating new challenges to the business sector. With the pressure from the government,
business competition, the community, and investors, companies must pay full
attention in supply chain and business development to the environment to provide
benefits to the firm performance by implementing green operations, so that green
supply chain management and green innovation are considered capable of improving
firm performance. Green supply chain management is a method for addressing
issues such as I) stakeholder adoption of green practices, II) stakeholder desire to
implement GSCM, III) hurdles faced by stakeholders to GSCM implementation,
and 4) implications for firm performance (Wibowo et al., 2018). Supply chain
management refers to a company’s interaction with its suppliers, distributors, and
customers, in which the organization strives to preserve the environment across the
supply chain. By generating green products, the deployment of GSCM can increase
company performance in terms of profitability and green innovation (Seman et
al., 2019). As a result, the number of businesses using GSCM to improve their
performance will expand.
Green innovation is a notion that can mitigate the adverse environmental effects
while improving business performance to boost public trust, cost efficiency,
productivity, and market share (Agustia et al., 2019). Adopting green innovation is a
difficult step to take since it involves new aspects such as green process management,
ecosystem reconstruction, and green product R&D, as well as a departure from the
traditional work system in terms of organizational structure and employee performance
(Ge et al., 2018). Green innovation is possible if the company also considers the
environment’s influence, such as an unpredictable climate and limited natural
resources. As a result, the organization must make innovative modifications to its
business activities while also considering environmental implications (Khaksar et
al., 2016). Green innovation can be beneficial for changes in firm performance (Ma
et al., 2018), as an increase in firm performance can create a competitive advantage.
Earlier studies have shown green supply chain management improves business
performance, even though green supply chain management requires huge costs (Geng
et al., 2017). Nevertheless, the green supply chain management has no significant
impact on the performance of the firms because few company owners or managers
had implemented green supply chain management (Namagembe et al., 2016). There
was a significant effect of green supply chain management on green innovation,
in which when companies implemented green supply chain management, it would
increase green innovation (Abu Seman et al., 2019). Companies adopted green supply
chain management and green innovation due to pressure from external stakeholders,
which is to improve firm performance (Burki, 2018; Seman, Zakuan, Jusoh, Arif
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& Saman, 2012) . There is a positive influence between green innovation and firm
performance, which indicated that technological advances in innovation that took
account of environmental impacts would be able to heightens firm performance
(Handayani, Wahyudi & Suharnomo, 2017). Thus, there is an increasing need for green
supply chain management, green innovation, and firm performance in companies in
Indonesia. The purpose of this research was to assess how companies in Indonesia
can improve firm performance through green innovation and green supply chain
management. Good firm performance can assist the company to increase production
optimally, have adequate human resources, expand market share and increase profits
(Abeysekara, Wang & Kuruppuarachchi, 2019).
The direct and indirect consequences of green supply chain management, green
innovation, and firm performance were investigated in this study. This research
intends to lessen the literature gap regarding green supply chain management, green
innovation, and firm performance for MNCs operating in Pakistan. The major driver
in increasing firm performance is top management’s choice to deliver green supply
chain management guidelines (Chu et al., 2017). However, the green supply chain
management study must be considered because there are still gaps, as the firm’s
performance objectives are focused on in different ways (Liu et al., 2018). Green
supply chain management will promote green innovation in the presence of external
pressures, which will enhance the firm performance (Seman et al., 2019). Green
innovation was shown to absorb the concerns of the managerial environment to
boost firm performance (Xue et al., 2019). To address this gap, this study aimed to
address the following questions: 1) do green supply chain management and green
innovation affect firm performance? 2) does green supply chain management affect
green innovation? and 3) can green innovation mediate the effect of green supply
chain management on firm performance?
LITERATURE AND HYPOTHESIS DEVELOPMENT
Green Supply Chain Management
Green supply chain management is a supply chain that aims to reduce waste, improve
ecosystem quality, eco-efficiency, and material recycling process. In practice, green
supply chain management which is in the form of measures in terms of technology,
installation of new equipment, providing training for the supplier, and allocating
employees is aimed at earning significant profits by paying attention to environmental
efficiency (Drohomeretski, Da Costa & De Lima, 2014; Sugandini, Muafi, Susilowati,
Siswanti & Syafri, 2020). To increase the production of a company and due to
the government regulations regarding environmental impacts, it obliges company
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managers to implement the green supply chain management concept (Dolat-Abadi
et al, 2021; Khaksar et al., 2016). GSCM has the goal to improve firm performance
in terms of economic, environmental, operational, and social performance (Geng
et al., 2017).
Green supply chain management can solve problems in various ways, including:
implementation of green practice for stakeholders, lack in motivation to implement
green supply chain management for stakeholders, obstacles in the problem of
implementing green supply chain management for stakeholders, overall performance
implications (Wibowo et al., 2018). By implementing green supply chain management,
the company can hold or minimize demands from external factors, such as government
and consumers or customers (Abu Seman et al., 2019). Green supply chain management
can motivate many companies to achieve to maintain and protect the environment
for future generations (Sharma, Chandna & Bhardwaj, 2017).
However, green supply chain management is not only integrated in relation to
the process of product manufacture and delivery to customers but must also be
considered in the initial stage of product design to the final of product use and waste
disposal (Tan, Zailani, Tan & Shaharudin, 2016). It is very challenging to manage
the resources required to implement and apply green supply chain management
without the support and commitment from company management (Govindan, Muduli,
Devika & Barve, 2016). In a circular economy, green supply chain management is
an effort to optimize resources and as a solution to deal with environmental impacts
and supply chains (Kazancoglu, Kazancoglu & Sagnak, 2018).
Green Innovation
Green innovation is an advancement in company technology to produce
environmentally friendly products, save energy, prevent pollution, recycle waste,
and improve environmental management practices that support sustainability. Green
innovation is an essential factor for companies in production and resources in taking
account to environmental impacts, and this is the fact that shows that the importance
of green innovation is the environmental concern which is currently being increased
around the world (Ghazanfari et al, 2019; Khaksar et al., 2016). In implementing
green innovation, companies can increase production, maximize internal activities,
and reduce operating costs through environmentally friendly innovation (Aguilera-
Caracuel & Ortiz-de-Mandojana, 2013). In its practice, green innovation consists of
modifying product designs and processes of production activities from materials,
production and delivery which aims to reduce negative impacts on the environment
(Mohammadi et al, 2019; Chiou et al, 2011).
In dealing with increasing challenges and environmental pressures, company
managers must realize that green innovation is a crucial factor in company strategy to
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achieve a competitive advantage, fulfill market needs, meet stakeholder expectations
and sustainable development in improving firm performance (Soewarno et al, 2019;
Mohammadi et al, 2018). Besides, the relationship between green innovation and
competitive advantage can be explored by using the RBV (resource-based view) of
each company (Nanath & Pillai, 2017).
Green innovation becomes a force as the main driver in market share and enhancing
the company’s reputation for carrying out company strategies (Lin, Chen & Huang,
2014). Companies that implement green innovation will be able to survive and be
able to create new opportunities to compete in an increasingly competitive market
share and also provide information to stakeholders because, with the green innovation
policy, the company has the opportunity to develop and become the main player in
the global market (Weng, Chen & Chen, 2015; Xue et al., 2019).
Firm Performance
Firm performance is a multidimensional concept with three indications that might
boost a company’s profit growth rate: production, finance, and marketing. Companies
encounters a multitude of risks in establishing, maintaining, and improving business
performance as a result of uncertainty and an increasingly competitive market
(Halim et al., 2017). Firm performance refers to how well a corporation meets its
production, resource, marketing, and financial goals (Abeysekara et al., 2019).
Multidimensionality, dynamism, and comparability are the three categories of
corporate performance. Because there are many stakeholders, different strategies,
and different sizes of comprehension, multidimensionality is a disagreement of
opinion. Senior managers strive for dynamism in managing firm performance in
order to provide superior long-term and short-term returns for shareholders. Finally,
comparability refers to the proper benchmarking of competitor companies in terms
of market share (Fei & Hedley, 2013).
Green Supply Chain Management and Green Innovation
The connection between stakeholders in a company’s supply chain who can establish
green innovation to face pressure from external elements such as the government
and regulators is the relationship between green supply chain management and
green innovation. Green supply chain management and green innovation have a
synergistic relationship in which green supply chain management has a significant
and beneficial impact on green innovation (Seman et al., 2019). This demonstrates
that the organization prioritizes green supply chain management as a key driver of
green innovation. Companies will benefit substantially from the collaboration between
green supply chain management and green innovation in improving product design,
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product manufacturing methods, and boosting compliance to lessen environmental
consequences (Chiou et al., 2011). As a result, the researchers came up with the
following hypothesis:
H1: Green supply chain management has a positive impact on green innovation.
Green Innovation and Firm Performance
Green innovation, which is the technology for generating environmentally friendly
products, has been shown to enhance marketing and sales, resulting in dependable
company performance. Achieving market share recognition is a sign of a company’s
success and a mark of green innovation’s accomplishment. According to Ma et al.
(2018), organizations that use green innovation can enhance their performance by
1) employing recycled resources to cut costs and increase revenue and 2) modifying
environmentally friendly product designs to increase sales and profits. Companies
that apply green innovation will get a “first-mover advantage,” including competitive
product prices, improved corporate image, greater market share opportunities, and
competitive benefits, which can be quantified both financially and non-financially
(Weng et al., 2015). As a result, the researchers came up with the following hypothesis:
H2: Green innovation has a positive impact on firm performance.
Green Supply Chain Management and Firm Performance
Green supply chain management, which is being used to save the environment, can
assist businesses in lowering raw material prices and increasing the usage of recycled
materials, resulting in increased profitability and improved firm performance.
Economy, environment, and operations are among the five primary factors of
green supply chain management and business success, according to (Geng et al.,
2017). Green supply chain management, according to (Choi & Hwang, 2015), can
be useful to a firm performance by assisting enterprises in developing modified
environmental management, which leads to improved firm performance. Green supply
chain management has a positive and significant impact on company performance,
demonstrating that it may help companies gain a competitive advantage and enhance
their financial performance over time (Khan & Qianli, 2017). There are disparities in
companies’ perspectives on implementing green supply chain management to boost
firm performance since organizations must understand the variables in green supply
chain management to implement them in the company and make them sustainable
(Kuei et al., 2015). The researchers presented the following hypothesis as a result
of this difference of opinion:
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H3: Green supply chain management has a positive impact on firm performance.
The Mediating Effect of Green Innovation
There have been a few past studies on how green supply chain management affects
corporate performance. However, additional variables like mediation are required to
associate green supply chain management and business performance directly. Green
innovation is the research’s mediating variable. Green innovation can demonstrate a
company’s ability to compete for market share, grow the economy, develop product
networks, and improve the socio-technical environment (Hazarika & Zhang, 2019).
Companies can considerably preserve and improve firm performance by using green
innovation to lessen the environmental impact talked about by external parties (Seman
et al., 2019). As a result, the researchers came up with the following hypothesis:
H4: Green innovation mediates the impact of green supply chain management on
firm performance.
CONCEPTUAL FRAMEWORK
RESEARCH METHODS
The target audience for the current research was MNCs sector operating in Pakistan
registered with Pakistan stock exchange (PSX). We approached only ISO 9001
accredited companies and have or have applied for or plan to use for ISO 14001 and
Figure 1. Green supply chain management, green innovation, and firm performance
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26000 certificates. The data was collected from MNCs sited in six major commercial
cities in Pakistan, including Karachi, Lahore, Multan Islamabad, Peshawar, and
Faisalabad via following a non-probability convenience sampling technique. The
selection of the abovementioned towns was based on population density as well as
these cities considered business hubs. Besides, the three major provinces of Pakistan
were also represented by these cities; for example, Karachi represents the province
of Sindh, Lahore, Multan, and Faisalabad represents Punjab, Peshawar represents
the province of Khyber Pakhtunkhwa (KP), and Islamabad is the separate territory
and capital of Pakistan. Target respondents were manager level employees (senior
managers, middle managers, and operation management managers) who are familiar
with the work related to supply chain management department, including purchasing,
warehousing, inventory and so on. Each level manager represented a firm and came
from a different company.
In addition, they are also the key people in their companies who exchange data
and enforce policies. The present research’s total population was included totally
180 companies listed with PSX. The target population 180 was sampled at 95%
confidential level and +/- of 5 confidential interval, then the samples’ size were
123 companies. Firstly, the personnel responsible for supply chain department in
the targeted firms were approached using purposive sampling. Afterwards, he/she
advised the next respondents in the concerned firm for all operational, middle,
and upper-level management staff by using the snowball sampling. Following this
approach, total respondents in this research were 369 respondents (= 123*3) and
used for the analysis. The researcher obtained 369 responses which were used for
data analysis in response to 123 targeted multinationals companies. In Tables I and
Table II, detailed demographic information is provided.
Questionnaire Design
We utilized a 19-item questionnaire to determine the three components, which we
have provided in Table 2. Several authors provided the questions utilized in this
study to quantify each construct: company performance (Paulraj, 2011), green supply
chain management (Rao & Holt, 2005), and green innovation (Kim et al., 2012).
An introduction letter from one of the authors’ academic institutions was included
in our questionnaire, and the objectives and merits of the research were provided
within the introduction letter. We ensured complete anonymity and confidentiality
for the respondents. We reversed certain questions from negative to positive and vice
versa before performing the real survey to avoid skewed findings. We also took into
account a variety of demographic and industry-related factors (dummy variables).
Furthermore, we conducted several causality tests to check that the association is
in the right direction. The results, however, are not reported in the document for
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brevity’s sake. SmartPLS is a program that is used to simulate structural equation
modeling (SEM).
Table 1. The composition of sample firms into province and cities
Province Cities Number of
Companies
Questionnaire
Distributed
Response From
Companies
Sindh Karachi 24 72 72
Punjab Lahore 23 69 69
-Multan 16 48 48
-Faisalabad 22 66 66
Capital City
(Separate Territory) Islamabad 27 81 81
Khyber
Pakhtunkhwa
(KP)
Peshawar 11 33 33
Total 123 369 369
Table 2. Demographic information
Specifics Description Values Percentage
Gender
Male
Female
SUM
220
149
369
59.60%
40.40%
100.00%
Total Responses
Medium
Large
SUM
252
117
369
68.29%
31.71%
100.00%
Job Level
Lower Management
Middle Management
Upper Management
SUM
123
123
123
369
33.33%
33.33%
33.33%
100.00%
Years of Experience
Less than 6 Years
6-10 Years
11-15 Years
More than 15 Years
Total
175
93
87
14
369
47.42%
25.10%
23.71%
3.77%
100.00%
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DATA ANALYSIS
We used SmartPLS 3.0 to examine the study’s model using partial least squares
(PLS) analysis. We used two-staged analytical modules for SEM, as recommended by
(Hair et al., 2014). We looked at the measuring model (reliability and validity of the
measurements) before putting the structural model to the test. A bootstrapping method
was utilized to investigate the significance of loadings and path coefficients (Hair
et al., 2016). Bootstrapping is a nonparametric approach for generating subsamples
from the main sample’s replacement using randomly produced observations. We next
use PLS to estimate the path model from this subsample. This technique is repeated
until a large number of subsamples are obtained, allowing us to estimate the statistical
significance of various PLS-SEM discoveries, such as path coefficients, Heterotrait-
Monotrait (HTMT), Cronbach’s alpha, and R2 values (Davison & Hinkley, 1997).
Data normality was checked since SEM requires that the normality assumption
of data not be violated. Skewness values ranged from _2.012 to _0.389, whereas
kurtosis statistics ranged from _0.039 to 3.031. As per Kline’s (2011) criterion, the
normalcy assumption was violated because few values exceeded 2 for skewness and
above 2 for kurtosis. As a result, we used PLS based SEM in this research. PLS-SEM
can provide a solid foundation for the confirmation of ideas and obtained data that
assist us in clarifying how theories are applied. In structural modeling, PLS-SEM
is an acceptable and well-established technique for calculating route coefficients.
Because of its capacity to measure intricate models and latent variables under
the non-normality assumption and handle small sample sizes, this technique has
been widely used in many research investigations, especially in management and
marketing, throughout the last decade (Hair et al., 2016). In reporting the findings of
this investigation, we used the style described by Henseler et al. (2009). According
to their style, we should first assess the variables’ reliability and validity by creating
accurate estimates for the PLS Algorithm measurement model.
After that, we use SmartPLS’ Bootstrapping option to produce an estimation of
a structural model. The results came from the estimate of the measurement model
shown in Figure 1, which looked at the correlations between the construct (latent
variable) and its indicators in general. Discriminant validity, composite reliability,
Cronbach’s alpha, average variance extracted (AVE), Spearman-Brown coefficient,
and Guttman split-half reliability coefficients were among the validity and reliability
tests conducted. Table 3 summarizes the validity and reliability findings. The indicator
level discriminant validity is measured using factor loadings. Each variable’s items
should have a strong relationship with its own variables and be less related to other
variables (Campbell & Fiske, 1959). The factor loadings indicate that all indicators
have the strongest association to their variables. The AVE values for each variable
are greater than 0.5, indicating acceptable convergent validity. Composite reliability
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and Cronbach’s alpha are both more than 0.7, exceeding the minimum acceptable
threshold. Furthermore, the consistency between the Spearman-Brown coefficients
and the Guttman split-half coefficients is fairly high for all variables. As a result, it
can be concluded that the structures are trustworthy.
The Fornell-Larcker test can also be used to determine discriminant validity.
Panel A of Table 3 shows the results of the Fornell-Larcker test. Following Fornell
& Larcker (1981), for a construct to be legitimate, the square root of AVE for each
(latent) variable must be bigger than any of the bivariate correlations for the variables
in issue, and our findings meet this requirement. According to the results, the square
root of the AVE for all variables is larger than any of the bivariate correlations.
Furthermore, by examining the HTMT ratio values, we were able to determine the
discriminant validity. According to Henseler et al. (2009), the maximum HTMT
value presented in Panel B of Table 4 should be less than 0.85, which is the most
conservative critical HTMT value. As a result, we concluded that discriminant
validity had been established.
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Table 3. Reliability and validity
Construct and Items FL CR CA SBC GSC AVE
Green Supply Chain Management
(GSCM) 0.80 0.71 0.75 0.76 0.55
GSCM1 0.730
GSCM2 0.756
GSCM3 0.763
GSCM4 0.784
GSCM5 0.719
GSCM6 0.709
GSCM7 0.763
Green Innovation (GIN) 0.89 0.79 0.92 0.86 0.54
GIN1 0.720
GIN2 0.750
GIN3 0.779
GIN4 0.769
GIN5 0.737
GIN6 0.730
Firm Performance (FP) 0.87 0.85 0.85 0.80 0.57
FP1 0.746
FP2 0.679
FP3 0.778
FP4 0.692
FP5 0.749
FP6 0.762
Table 4. Fornell-Larcker criterion and Heterotrait-Monotrait ratio (HTMT)
Panel 1: Fornell-Larcker Criteria Panel 2: Heterotrait-Monotrait Ratio
Variables GSCM GIN FP GSCM GIN FP
GSCM 0.743 - - - - -
GIN 0.569 0.765 - 0.555 - -
FP 0.493 0.510 0.738 0.673 0.573 -
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Structure Model
The structural model assesses the link between a study’s given variables. It’s just
regression analysis in disguise. Table 5 shows the structural model results, which
include a Beta value representing the value of the explanatory factors’ impact on the
dependent variable. The sign indicates the direction of the impact with a beta value.
The structure model also provides the t-statistics and p-value. These numbers are
used to determine the importance of a relationship. T-statistics must be larger than
1.96, or the p-value must be less than 0.05 to indicate a meaningful link. A sign with
t-statistics, like a sign with a beta value, also illustrates the relationship’s direction.
The R2 value, which indicates the strength of the association, is also included in the
structure model results. These parameters are critical when attempting to forecast
the future based on the findings of a study (Frost, 2014).
Green supply chain management and firm performance have a substantial positive
link, with a coefficient of 0.16, t-statistics of 3.00, and a p-value of 0.003. The value
of firm performance improves by 0.16 units for every one-unit change in GSCM. It
supports the first hypothesis (H1) that GSCM improves firm performance significantly.
According to the study, green supply chain management has a considerable impact
on green innovation, with a coefficient value of 0.36 and a p-value of 0.000. As a
result, the second hypothesis (H2) that GSCM has a considerable beneficial effect
on green innovation is valid.
Because the p-value is less than 0.05 and the t-values are much greater than 1.96,
the direct association between green innovation and company performance is also
positively significant. The coefficient of 0.59 indicates that a one-unit increase in green
innovation will result in a 0.59-unit increase in firm performance. It demonstrates
that green innovation has a large and favorable impact on business performance (H3).
Mediation Testing
Green innovation is used as a mediating variable in the suggested model of this study.
To determine if this mediation strengthens or weakens the relationship between the
dependent and independent variables, we can look at the indirect impacts of the
model and compare them to the direct impact. Preacher & Hayes (2008) proposed the
bootstrap confidence interval algorithm, which allows us to add 5,000 iterations to
determine the statistical significance of indirect effects between components. Green
innovation plays a big impact in favorably influencing the connection, according to the
findings. With the improved value of both t-statistics and p-values, the relationship’s
direction stays unchanged. In addition, the magnitude of the coefficient values
increases. As a result, the fourth hypothesis (H4) that green innovation mediates
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the impact of green supply chain management on firm performance is confirmed.
Table 5 presents an overview of both direct and indirect effects.
The Fit and the Quality Indices of the Model
The four metrics are used to assess the model’s quality indices. Hair Jr et al. (2016)
defined R2 / Adjusted R2, Stone-value Geisser’s of Q2 (Geisser, 1974; Stone, 1974),
which indicates indicator or predictive validity, Cohen’s (1988) effect size f2, and
the goodness of fit (GOF) (Henseler et al., 2009) measured by the standardized root
means squared residuals (SRMR). The R2 /Adjusted R2 values are used to calculate
predictive accuracy. Exogenous (independent variable) latent variables have a shared
effect on all endogenous (dependent) variables, and their magnitude specifies this.
R2 can have a value between 0 and 1. Where 1 denotes complete predicted accuracy,
which is unusually difficult to achieve. A value of 0.67 is considered strong, 0.33
is considered average, and 0.19 is considered poor prediction accuracy. For the
variable GSCM, the model’s predictive accuracy was rated as moderate, while for
the constructs GI and FP, it was rated as strong. For the measurement models of
GSCM, GI, and FP, the estimated R2 values are 0.26, 0.58, and 0.59 (adjusted R2:
0.26, 0.59, 0.60). The Stone-Geisser value of Q2 determines how close the model is
to what was predicted (the model predictive quality or the accuracy of the adjusted
model). As a standard of evaluation, Q2 values greater than zero should be acquired
(Hair et al., 2014). If Q2 = 1, the model is considered flawless, indicating that it
accurately mirrors reality. To determine how suitable each predictor construct is
on the dependent construct, Cohen’s indicator of impact size f 2 is obtained by
one-by-one inclusion and exclusion of the constructs in the model. According to
Cohen (1988), the independent predictor construct’s effect is “little” if the f2 value
is 0.02, “medium” if the value is 0.15, and “big” if the value is 0.35. We can deduce
that removing incentives from the model has a significant impact. Running the
Blindfolding module on the SmartPLS yields both Q2 and f 2. The Q2 values are
derived by assessing the general redundancy, and the f 2 values are generated by
Table 5. Direct and indirect effects
Directions Direct Effect Indirect Effect Total Effect T Stat. P Value
GSCM > FP 0.16 0.16 3.00 0.003
GSCM > GIN 0.36 0.36 8.15 0.000
GIN > FP 0.59 0.59 12.53 0.000
GSCM > GIN > FP 0.13 0.21 0.34 6.53 0.000
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reading the model’s commonalities. Table 6 demonstrates that the components are
significant for the general adjustment of the model and that the model is correct,
as evidenced by the Stone-Geisser indicator/predictive validity (Q2) and Cohen’s
indicator/effect size (f 2) values. Finally, a generic model adjustment indicator
should be estimated. In this regard, Hu & Bentler (1998) presented a GOF, which
is essentially an SRMR that depicts a model’s approximate fit. It expresses the size
of the model’s implication.
DISCUSSION
We anticipated that green supply chain management has a considerable positive
influence on firm performance based on the PBV. This association was shown to
be significantly positive, which is consistent with earlier research (Abdul-Rashid et
al., 2017). The findings also support the role of green innovation as mediators of the
relationship between GSCM practices and firm performance (Adams et al., 2016;
Kusi-Sarpong et al., 2019), providing empirical support for the role of innovation
as a stepping stone on the path to firm performance of GSCM practices (Adams
et al., 2016).
Green innovation mediates the link between green supply chain management and
company performance. The integration of GSCM practices across organizational
boundaries is required since these practices are linked to structures and procedures
from both suppliers and the focus business, potentially increasing the need for green
innovation. Furthermore, the chain of interaction with structures from external
stakeholders enhances the stakes for efficacy evaluation. According to NPT, the
communal appraisal can lead to attempts at reconfiguration or the modification
or reconstruction of a practice (May & Finch, 2009). GSCM methods, it is said,
can be successfully introduced and integrated into organizational routines without
the need for later green innovation to improve business performance. Process
innovations, particularly environmental management systems focusing on lean process
improvements, quality management, and standards, can help firms successfully
Table 6. The predictive relevance and cross-redundancy
Direction Q2F2
GSCM > FP 0.079 0.312
GSCM > GIN 0.321 0.451
GIN > FP 0.432 0.442
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regulate and monitor GSCM practice implementation (Dubey et al., 2015; King &
Lenox, 2001).
Managerial and Theoretical Implications
In terms of management and theoretical perspectives, the current study has
several implications. From an industrial standpoint, the findings mentioned above
demonstrate the importance of GSCM techniques in achieving firm performance in
the MNCs sector. These findings also demonstrate the critical significance of green
innovation in achieving firm performance goals, demonstrating that by incorporating
GSCM and GI practices, a company can achieve perfection in day-to-day operations,
resulting in strategic and competitive advantage. The structural analysis results show
that the effective application of GSCM and GI practices is directly linked to business
performance targets. Organizations that actively participate in social development
initiatives and are effectively involved in quality management activities have the
potential to outperform those that follow traditional techniques. Organizations should
commit to effective GSCM practices implementation by implementing innovative
processes to achieve business performance to achieve this goal.
The current study also shows that GSCM is equally important for large and medium-
sized organizations, implying that if medium-sized businesses successfully implement
GSCM, regardless of size, it may aid in the achievement of firm performance goals.
As a result of this research, managers of medium-sized enterprises can be certain
that they can reap the same benefits from GSCM procedures as giant corporations.
The current study also shows that the beneficial effects of GSCM operations are
not limited to enterprises operating in developed countries. Parallel effects can be
reached if organizations successfully implement GSCM activities in emerging or
underdeveloped areas.
From a theoretical standpoint, recent research adds to the existing literature on
GSCM, GI, and FP in a variety of ways:
This study fills a knowledge vacuum in the GSCM-FP link, particularly among
MNCs operating in Pakistan. This study also backs up proponents’ statements
that GSCM deployment can drastically boost a company’s productivity.
Using the Structural Model, this study confirms the PBV theory and investigates the
conceptual model’s robustness, which has seldom been done before.
Our study demonstrates the role of the GI in favorably mediating the link between
GSCM and FP, which has never been quantified before.
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Limitation and Future Research
Similar to prior research, the current study has several limitations. We gathered
information from respondents to design the questionnaire based on the firm’s real
production; nevertheless, because the questionnaire was dependent on respondents
perceptions, this could lead to bias. Even though the reliability and validity of the data
have been rigorously examined, biases cannot be eliminated. As a result, secondary
data from the enterprises can provide more information about the GSCM, GI, and
FP relationships. Furthermore, due to the widespread distribution of Covid-19, the
researcher was limited in terms of accessibility and response rate during the data
collection phase. Second, just six cities’ businesses were used as the target market
for data collecting. It is suggested that the study’s scope be expanded to include
other major cities and nations. Similarly, operational, medium, and upper-level
management have focused on data collecting while overlooking operational workers,
despite their perspective being more informative. As a result, the researcher can use
their impressions in the future when studying these elements further.
CONCLUSION
Given the growing environmental concern sparked mostly by the MNCs sector,
the importance of green growth has grown significantly in terms of achieving
sustainability. Green growth is particularly important for emerging countries, such
as Pakistan, where the phenomenon is still in its early stages and takes a developed-
country perspective. The Pakistani government has made major investments in
fostering green business practices in recent years. In this study, we looked at the
effect of GSCM in company performance and how green innovation mediates the
relationship between the two variables. The practice-based view (PBV) and essential
arguments built on existing research were used to develop four hypotheses tested
using structural modeling. The findings show that GSCM has a large and favorable
impact on firm performance and a high potential for improving business operations.
Furthermore, green innovation strongly mediates the association between GSCM
and company performance. The positive outcomes of GSCM in firm performance
in MNCs with the support of green innovation mediation suggest that if companies
properly embrace GSCM techniques, firm performance will improve even in
developing countries. However, to attain competitive advantage and green business
goals, the government’s role, and senior management commitment are required.
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Chapter 12
DOI: 10.4018/979-8-3693-0159-3.ch012
ABSTRACT
The cold chain is an essential part of the supply chain process for perishable products.
Recent studies have shown a decisive lack of efficient operational arrangements for
cold chain services in developing economies like India. The key integral factors of
cold chain industries have been identified on the basis of an extensive literature
review as well as analyzing the influencing factors through the KMO Test for
identification of the factors of cold chain performance. The end result will establish
a relationship between high driving powers with low dependences and high strategic
dependencies with low significance. It will also identify the major inhibitors, their
role in the operation, and their effect on a cold chain in India.
A Study on Factors
Affecting Cold Supply Chain
Performance in India
Azfar Imam
Zinka Logistics Solutions Pvt. Ltd., India
Nilanjan Ray
Institute of Leadership Entrepreneurship and Development, India
Niyasha Patra
https://orcid.org/0009-0002-0404-9664
Institute of Leadership Entrepreneurship and Development, India
Copyright © 2024, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited.
225
A Study on Factors Aecting Cold Supply Chain Performance in India
INTRODUCTION
A “cold chain” is the technology and process of production, keeping, and distributing
perishable items in a temperature-controlled condition. It safeguards a wide variety of
food and bio-products from degradation, temperature, humidity, light, or contaminants
and keeps these iced and preserved items fresh and intact. The prime challenges
are to maintain proper temperature and conditions throughout the process follow
the necessary guideline and serve a quality product to the end user. The very first
process of operations starts from the farms or production house itself followed by
transport it to consumers through various channels. A typical cold chain product
goes through several phases like pre-cooling, cold storage, refrigerated carries,
packing, warehouse, traceability, retailer, and consumers in its life cycle, and the
whole process is tracked by a strong information system.
Key management of the cold chain is to prevent avoidable losses. According
to the literature, as an effective service system, certain variables and factors must
be considered while building a cold chain process at the farm and logistics levels.
The main worries are to identify success factors from the list. Besides this, a set
of influences is also to be considered to construct a smart, sustainable, and cost-
control arrangement.
Figure 1. A typical cold chain
Source: Montanari (2008), Viswanandham (2006)
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A Study on Factors Aecting Cold Supply Chain Performance in India
LITERATURE REVIEW
Maintaining the quality of cold chain products in its life cycle should be the prime
concern for the organization (Salin and Nayga, 2003).
According to Pieter van Donk et al. (2008), to maintain the integrity of a food
product, food manufacturers have to put equal effort and importance or sometimes
more into their supply chain process rather than the recipe. Since these all are
peripheral commodities the chances of waste, loss, and loss of quality are always
very high. In this case to serve the purpose help of technology should be like VMI,
CPFR, EDI, QR, etc.
Patra & Ray (2018) has discovered the impact of digitization in a system and
it’s impact on consumer behaviour. Fearne and Hughes (2000) studied on UK fresh
produce industry and concludes few success factors like innovation, and cost control
should be focused more to improve this business.
Bogataj et al. (2005) and Valeeva et al. (2006) have discussed on the quality
retainment of perishable goods in their lifecycle. According to Ray & Chaudhuri
(2018), Jahre and Johan Hatteland (2004), Blanco et al. (2005), and Berger (2007),
quality of the goods can be maintained if the packaging and distribution of perishable
goods can be standardized.
Researchers (Montanari, 2008; Kelepouris et al., 2007; Regattieri et al., 2007;
Berger, 2007; Folinas et al. 2006) have concluded that to deal with the problem of
cold chain and logistics regarding the food safety, quality, logistics, and, distribution
information technology should be taken into action. All these addressed problems
could be solved by establishing a smart system with the help of information technology.
Taylor and Fearne (2006) found a continuous change in supply and demand is also
a major concern in the supply chain. Supporting the same, Gorton et al. (2006) while
discussing the issues of overcoming the supply chain failure in the agri-food sector.
According to Dunne (2008), Kottila and Ronni (2008), and Fearne et al. (2006)
to serve the demand of supermarkets and suppliers, a collaborative approach could
be followed. It will also help to improve customer service.
Returning perishable items is also another problem at the retail level at was
identified in the literature (Hsu et al., 2007; van Donselaar et al., 2006; Likar and
Jevsnik, 2006; Hahn et al., 2004).
Bourlakis and Bourlakis (2005) have found out the importance of fourth-party
logistics services in the chain of the logistics process. Ovca & Jevsnik (2008), Zokaei
(2006), Ray et al. (2011) have worked on consumer views and feedback about the
products consumed in the cold chain process and urban & non-urban area in service
industry also.
In the Indian context, it was observed that in this domain there is a deficit of
literature work resulting in negligence in inhibitors factors which later cause quality
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loss, hygiene issues, or poor performance of the whole system. According to Kumar
(2008) the cohesion between the supermarket industry and logistics in developing
and developed countries is being discussed in his study. Maheshwar and Chanakwa
(2006) have signified the possible measures that could be taken to control the post-
harvest loss that occurs in India.
OBJECTIVE OF THE STUDY
The main objective of the study is to explore existing opportunities for the cold
chain industry in India and to identify challenges affecting the industry and possible
measures to rectify them.
RESEARCH METHODOLOGY
Research Design-The formulation and prioritization of factors are done on the
basis of existing literature, online resources, and consultation with industry
professionals.
Data collection-
Thirteen factors affecting the cold chain industry were selected from existing literature
and were given to 75 industry experts and they were asked to rate them on a
scale of no importance to highest importance. The outcome was then analyzed
and ranked according to their scores.
For identifying opportunities for the sector various research reports & research
papers were consulted, brainstormed, and compiled.
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DATA ANALYSIS
Table 1. Factors taken for the study and their references
Table 2. Reliability statistics
Cronbach’s Alpha Cronbach’s Alpha Based on Standardized Items N of Items
.606 .488 13
Table 3. KMO and Bartlett’s test
Kaiser-Meyer-Olkin Measure of Sampling Adequacy. .589
Bartlett’s Test of Sphericity
Approx. Chi-Square 649.406
Df 78
Sig. .000
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A Study on Factors Aecting Cold Supply Chain Performance in India
Table 4. Communalities
Initial Extraction
Mechanism 1.000 .855
Collaboration_Planning 1.000 .806
Prof_Skill 1.000 .811
Awareness_IT 1.000 .714
Education 1.000 .597
Intermediaries 1.000 .886
Tracking_Process 1.000 .739
Standardization 1.000 .444
Govt_Regulation 1.000 .686
Cost_Factor 1.000 .746
Safety_Measures 1.000 .747
Commitment 1.000 .800
Cust_Ignorance 1.000 .870
Extraction Method: Principal Component Analysis.
Table 5. Total variance explained
Component
Initial Eigenvalues Extraction Sums of Squared Loadings
Total % of
Variance
Cumulative
%Total % of
Variance
Cumulative
%
1 4.488 34.520 34.520 4.488 34.520 34.520
2 2.218 17.063 51.582 2.218 17.063 51.582
3 1.816 13.967 65.550 1.816 13.967 65.550
4 1.180 9.080 74.630 1.180 9.080 74.630
5 .827 6.361 80.990
6 .796 6.125 87.115
7 .486 3.738 90.853
8 .459 3.533 94.386
9 .296 2.274 96.659
10 .197 1.514 98.174
11 .102 .787 98.961
12 .084 .648 99.609
13 .051 .391 100.000
Extraction Method: Principal Component Analysis.
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Figure 2.
Table 6. Component matrixa
Component
Infrastructure Overall Planning
& Monitoring
Quality
Benchmark
Customer
Perception
Overall
Mechanism -.845 -.376 .016 .004
Collaboration_
Planning -.372 .553 .408 .443
Prof_Skill .833 -.263 .128 -.176
Awareness_IT .729 .271 .330 -.009
Education .549 .338 -.426 .022
Intermediaries .741 -.355 .457 -.048
Tracking_Process -.168 .822 -.188 .003
Standardization .049 .288 .554 .228
Govt_Regulation .412 .597 -.350 .193
Cost_Factor .409 -.169 -.282 .686
Safety_Measures -.155 .662 -.532 -.032
Commitment .343 -.458 .087 .682
Cust_Ignorance -.344 .347 .546 .577
Extraction Method: Principal Component Analysis.
a. 4 components extracted.
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A Study on Factors Aecting Cold Supply Chain Performance in India
Researchers used Cronbach Alfa method to examine internal stability and
dependability. For this analysis, Cronbach Alfa is 0.606 (See Table 2). The particulars
on the measurement scale are considered to possess high-internal consistency
and reliability. According to Kaiser and Cerny (1979), the high shared variance
and relatively low uniqueness in variance are indicated by the KMO measure for
sampling adequacy (0.589). The Bartlett’s Sphericity Test where the Chi-square
value is 649.406 (p<0.0001) established that distribution is ellipsoid and amenable
to data reduction (See Table 3).
The Rotated Component Matrix depicts that the values of all the 13 items are
greater than 0.5 which strongly supports the recommendation of Nunnally and
Bernstein (1994) about the factor loading and cross-loading (See Table 6). So,
Table 6 recognized that all the factors are properly loaded under three components.
DISCUSSIONS
Application of IoT in Cold Chain
The IOT popularly known as the Internet of Things is basically a platform that
accumulates one or many physical objects, software, and different technologies
together and built an intelligent system over a network. It can be established on
both public and private networks. After the revolutionary evolution in the field
of information technology like the introduction of embedded systems, wireless
sensors, networks, and automation its implication has been applied in the business
as well. From decision making to business operation digitization in business has
been observed in all segments of business. This has made the business smarter and
much more sustainable worldwide. After China India is the second largest producer
of vegetables and fruits. As per the report 2019-2020, India has produced 31335
Million tons of vegetables and fruits. Now the major challenge is to store the product
and minimize the wastage.
The use of IOT in cold chains will improve the process flow. It will help to
come across major difficulties faced by logistics firms like real-time monitoring,
tracking, shipment, and temperature monitoring by proving insightful data on time.
Advancement of IOT will optimize unprecedented trouble for the firm. It will also
help to maintain good relationships with customers.
Though traceability is an important part of the cold chain, the implementation
of smart technologies also becomes important to sustain the quality of the product
and service. A few measures that can be taken are as follows:
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A Study on Factors Aecting Cold Supply Chain Performance in India
AI-based model to trace food borne illness: Advancement of technology will
help us to detect contaminated food. In this case image classification on object
detection can be used.
Infrastructure: In cold chain business time and speed is one of the most
essential components. Companies can take the help of a route planner or
genetic algorithm to get the optimal route for any journey. This will not
only save money but also improve customer relationships. Like other global
companies automated, intelligent and efficient systems can be introduced.
Overall Planning & Monitoring: There are several processes available to
process sequential data. Those are quite helpful. Among those LSTM (Long
Short-Term Memory) architecture for forecasting is one of the most useful for
doing time series forecasting.
Quality Benchmark: The ultimate goal of any clod chain service is to
maintain the quality of the item. Consistency in performance is needed in
terms of business. For better performance communication between the team
will help to take better decisions.
Customer Perception: Customers are one of the most important factors of
any business. But to foresee customer behaviors is really difficult since it is
driven by emotion. To predict customer data and their behavior it needed to
be accounted for. With time, the complexities in data and size of data have
grown. Extracting or analyzing uncertainties using spreadsheets turned out
to be obsolete over time. Many farms use big data, AI, or ML to do closer
predictions to analyze customer behavior and get the optimal strategy.
Opportunities:
According to the Ministry of Food Processing Industries:
India produces over 400 million MT of perishables each year which
incorporates horticultural products, dairy, meat, poultry, and fish.
The wastage levels of perishables in India are significantly high- 4.6- 15.9%
in fruits, 5.2% in inland fish, 10.5% in marine fish, 2.7% in meat, and 6.7%
in poultry.
The estimated annual value of losses of agri produce currently stands at `
92,651 corers. The annual value of losses in fruits and vegetables, meat, fish,
and milk is estimated at 50,473 corners.
Adequate and efficient cold chain infrastructure from farm to consumer is
required to attenuate the losses in the supply chain of perishables.
The total cold storage capacity in India at 31.8 million MT in line with the
Baseline survey conducted by National Horticulture Board (in Dec 2014)
estimates.
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A Study on Factors Aecting Cold Supply Chain Performance in India
Overall average capacity utilization in cold storage is 75%,showing the
sustainability of the cold chain business in India.
A large unfulfilled gap exists within the sector for investments in cold storage,
CA storage, reefers, ripening chambers, IQF, milk chilling and processing,
etc. and there is a requirement for cold chains across all states.
Currently, about 60% of the whole cold storage capacity is concentrated
within the states of Uttar Pradesh and West Bengal, wherein the majority of
the cold storage are for a single commodity - Potato.
The top 5 states in terms of total installed capacity are:
Uttar Pradesh (13.6 million MT)
West Bengal (5.9 million MT)
Gujarat (2.3 million MT)
Punjab (2.0 million MT)
Andhra Pradesh (1.6 million MT)
However, further capacity is required to be built in these states similarly
to other parts of the country
75% of the total cold storage in India is single commodities (mainly
potatoes). 25% are multi-commodity cold storage.
Current Opportunities in Various Sectors
India is the world’s largest producer of banana, papaya, mango, and guava;
the second largest producer of potato, green peas, tomato, cabbage, and
cauliflower. Despite being a leading producer, the processing levels for fruits
& vegetables in India are at a low rate of 2% with a 5-16% wastage loss across
different crops. Such a high level of wastage is primarily due to inefficient
storage, inadequate logistics, and poor post-harvest management.
The Indian Fisheries Sector, currently valued at around USD 15 Bn, is
presently changing drastically, with the fisheries sector growing by over 5-6%
in recent years. In terms of production, India is the second largest contributor
to the global trade. Annually it exports seafood valued at around USD 7 Bn
(2017-18).Besides this, it is a prominent contributor Domestic market has the
bulk share in context to the marketing of the fish produced in the country i.e.
85% of the produce which is highly unorganized and scattered. The domestic
fishery market is expected to grow at a CAGR of 12-14%
India has the world’s largest population of livestock which plays a vital role
in the agricultural economy and is a key contributor to the socioeconomic
well-being of rural masses.
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A Study on Factors Aecting Cold Supply Chain Performance in India
India is top of the list for countries in milk production. According to an
economic survey India’s milk production is growing by 35.61% during the
last six years to 198.4 million tonnes in 2019 20. Major milk-producing
countries, the growth story in India is driven largely by small-scale dairy
farmers. Around 80% of Indian cattle belong to farmers having a herd size
of 1 to 2 animals, producing on an average less than 4 kg milk per day. Due
to fragmented production, the dairy industry in India is still predominantly
unorganized with approximately 40% of marketable milk being routed through
the organized channel. So there is an urgent need for highly organized players
to intervene and manage its cold chain effectively.
Rising demand for low-cost meat from developing nations over the last
decade has propelled India’s growth in the meat segment. It exported meat
worth USD 4 Bn in 2016, led by Bovine exports worth USD 3.8 Bn followed
by Sheep carcasses worth USD 104 Mn. Presently India is the prominent
exporter of water-buffalo beef and sheep carcass, capturing more than 20%
and 40% of the world export market respectively.
As per the September 2020 update of IBEF, the Indian pharma industry
is expected to grow to $100 billion by 2025 from the current $37 billion
reported in 2019. With the Covid-19 pandemic in place and ongoing trials of
vaccines, there will be a heavy reliance of pharma companies on cold chain
supply in the coming months. The inability to maintain drugs at their required
temperature often leads to a loss of drug efficacy, which ultimately hampers
the pharma supply chain industry. Each year, the global pharmaceuticals
industry experiences a loss of products worth more than $15 billion due to
temperature vacillations during transit.
Findings
From the above study, the following challenges have been noticed and were ranked
according to the scores in the following order.
Poor infrastructure- One of the most prominent issues identified from the
study is the poor infrastructure that is hampering the growth of the cold chain
industry. Infrastructure includes a lack of proper roads, airports, warehousing
facilities, continuous power supply, etc. For the development of roads &
airports, government spending, and vigilance must be increased so that the
carrying cost decreases and the delays are minimized. The benefits reaped
from proper infrastructure can be passed to end users hence uplifting the
customer experience & maximizing logistics companies’ output. Nowadays
most of the cooling in cold chains is supported by diesel which is not cost-
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effective and creates more pollution, this can be checked by developing EV
infrastructure in India.
Improper collaboration planning- Interdependent companies work together in
cold chains like information enablers, supply partners, manpower providers,
funding institutions, etc to maximize the output. Dunne (2008) suggests
that lack of collaboration leads to various discrepancies on different levels
like forecast sharing, inventory management, labor scheduling,optimizing
deliveries, etc.
Incompetent professional skills- Rapid changes in supply chain processes and
technologies along with changing customer needs require continuous skill
development. The unorganized logistics sector & lack of attractiveness of the
sector fails to attract new recruits. Swaminathan (2007) identifies the areas
where there are the most skill gaps are familiarity with modern equipment
(pallet trucks, modern tools, etc.), IT systems (data loggers, RFID, etc.)
practices around handling and safety of stock.
Lack of awareness about the use of IT- Major IT systems are implemented
atthe retail level in India and not at the grassroots (Kumar, 2008). This uneven
adoption of IT at the farm-to-retail chain & leads to fragmentation (Matani,
2007). So, the retail chain must also share its resources via Apps or devices so
that there is minimal opportunity loss and the whole supply chain can enjoy
a competitive advantage.
Inadequate education of growers/ farmers – As with the advent of new farming
practices and scientific approaches, farmers now require new knowledge and
skills to compete with global peers. There are very few government-aided
training centers in a region where farmers can acquire the knowledge & skills
needed. The big corporates through CSR or productivity-increasing drives
can empower their suppliers (growers & farmers) with the knowledge needed
for the overall increase in productivity of the supply chain.
Too many intermediaries- In India there are various intermediaries through
which the product reaches to the end consumer. This results in multi-point
handling and long transit periods. The small farmer with lesser produce
generally doesn’t have any provision of selling their produce to end
consumers. The middlemen and poor supply chain facilities increase the
prices by up to 60% without adding any value (Ruben, 2007). So rather than
adding intermediaries which don’t add any value to the process there is a
possibility of adding intermediaries which will add value to the supply chain
like processing on 1st level, distribution on the next, packing, etc thereafter.
Lack of quality and safety measures- For maintaining the hygiene, safety,
and quality of the perishable goods, equipment with high thermal precision
is needed to be employed at all times. The perishables are transported under
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tough conditions from farms to processing centers, warehouses, distribution
centres, retailers and consumers. The companies have limited access to when
and where the quality is lost in the whole supply chain. According to Tijskens
and Polderdijk (1996), agricultural quality and freshness data are generally
lost in from farm to distributor. This issue can be addressed by applying
standard quality and safety practices throughout the supply chain by enabling
and educating all the stakeholders and intermediaries and auditing it from
time to time by relevant authorities.
Lack of standardization- Standardization is a powerful tool for cost
optimization & productivity maximization. Some of the areas where
standardization is lacking and should be taken care of are product packaging,
transit time, IT systems, loading-unloading practices, etc.
Customer ignorance toward quality- In India customers prefers unbranded or
sub-standard product only because their price in lower. This encourages poor
manufacturing and practices. Customers must be educated about the products
and offerings for a better understanding of the product. An efficient supply
chain will minimize the cost and will make products a little more affordable.
Government regulation- In India government regulation is handled by
various departments. With the increase in the need for cold chains in various
categories, more emphasis is needed on this sector and current departments
are unable to monitor such a high-growing sector. The taxes in the food
processing sector are one of the highest in the world making the end product
costly.
Improper tracing- Improper tracing and tracking are one of the issues for
achieving an efficient cold chain. As the demand and produce are very
unpredictable and seasonal this leads to fear of stock out, increased labor
costs, etc.
High cost for installation and operation- The high capital cost of setting up
a cold chain unit is a major drawback for the development of the cold chain
in India, which can be somewhat controlled by minimizing excise duty on
equipment and promoting more and more companies to enter OEM sector by
rewarding them with PLI schemes etc.
Lack of top-level commitment- Direct participation in top-level executives is
also a reason may it not be the most important of all the factors discussed, but
still, it has relevance in shaping the cold chain in India. The top management
could partner with partner companies & supplementary industries to integrate
their facilities to get the most from the cold chain.
Some of the sectors that have growth prospects for the cold chain industry in
India are Fruits, vegetables, dairy, meat, and pharmaceuticals.
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Practical Implications
At this time cold chain is one of the key domains for the food & pharmaceuticals
industry. These findings will help industrialists to reach the root of the problems,
identify the limitationsand strengths of a system rework it and establish a robust,
cost-effective and efficient supply chain operational process.
Limitation and Scope
The experts consulted for the research paper were from the East region of India so
geographically they weren’t diversified. Only 13 factors were analyzed, many other
factors are also there that may have taken into account.
A detailed study could be done on each of the sectors where opportunities are
identified in this paper.
CONCLUSION
The cold chain management process is even not evident when it operates in a
developed country. It became even more difficult in a developing country like India.
In a developed country they get all additional support like well-set up infrastructure,
and financial aid from govt. agencies which lead to fewer uncertainties in business.
But in developing countries, they face various challenges due to fragile infrastructure,
lack of supplies of basic necessities like electricity, water, etc. That is why strategies
that succeed for developed countries often fail as a whole applying to developing
economic countries. Besides being a developing economy, India is a country of
diversified land. India is a fragmented country with 70 percent of the population
residing in rural areas with over-reliance on the monsoons. 52 percent of the total
land is cultivable as against 11 percent in the world. All 15 major climates of the
world, from the snowbound Himalayas to the hot humid southern peninsula; Thar
Desert to heavy rain areas all exist in India. There are 20 agro-climatic regions and
nearly 46 out of 60 soil types in the country (FAO, 2005). For a cold chain company
in India, it requires a strong robust solution to serve good, fresh, and quality products
to the consumers on time.
In this discussion, it is tried to figure out all the key constraints that will be
important to build a cold chain operation strategy that leads to a profit-making
business.
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271
About the Contributors
Hamed Nozari is a research assistant in Industrial engineering at the Iran
university of science and technology. He holds a Ph.D. in Industrial Engineering
with a focus on Production Management and Planning and PostDoc in Industrial
Engineering from the Iran University of Science and Technology. He has taught
various courses in the field of Industrial Engineering and has published many books
and papers as well. Now he is a researcher in the field of digital developments and
smart systems and optimization.
* * *
Kamalendu Pal is with the Department of Computer Science, School of Sci-
ence and Technology, City, University of London. Kamalendu received his BSc
(Hons) degree in Physics from Calcutta University, India, Postgraduate Diploma in
Computer Science from Pune, India, MSc degree in Software Systems Technology
from the University of Sheffield, Postgraduate Diploma in Artificial Intelligence
from Kingston University, MPhil degree in Computer Science from the University
College London, and MBA degree from the University of Hull, United Kingdom.
He has published over hundred international research articles (including book
chapters) widely in the scientific community with research papers in the ACM
SIGMIS Database, Expert Systems with Applications, Decision Support Systems,
and conferences. His research interests include knowledge-based systems, decision
support systems, teaching and learning practice, blockchain technology, software
engineering, service-oriented computing, sensor network simulation, and supply
chain management. He is on the editorial board of an international computer sci-
ence journal and is a member of the British Computer Society, the Institution of
Engineering and Technology, and the IEEE Computer Society.
Anderson Rogério Pinto is a Business Administrator (2000) with an MBA in
Controllership and Finance (2005) from Centro Universitário Eurípides de Marília
(UNIVEM). Master in Production Engineering (2012) from Universidade Estadual
272
About the Contributors
Paulista Júlio de Mesquita Filho (UNESP) and PhD in Production Engineering
(2017) from the University of São Paulo (USP-EESC) in the areas of Operations
Management. He is currently a Controlling Analyst Sr. at Grupo Jacto Division
Unipac, Professor of the Professional Master’s Program in Production Engineer-
ing at UNIARA and Collaborating Researcher in the areas of Applied Operational
Research at USP-EESC. Journal of Enterprise Information Management and Inde-
pendent Journal of Management & Production. He has published his research in the
following international journals: Journal of Intelligent Manufacturing, Journal of
Manufacturing Systems and Production Engineering Research and Development.
Esra Yaşar is a research assistant at KTO Karatay University in Department of
International Trade and Logistics. She graduated from Selçuk University Depart-
ment of Industrial Engineering in 2012. She received a Master’s degree in Industrial
Engineering from the Necmettin Erbakan University Institute of Natural and Ap-
plied Sciences in 2017. She is a Ph.D. student at Eskişehir Teknik University in the
Department of Industrial Engineering.
273
Index
A
Artificial Intelligence (AI) 109, 139-140,
147
Artificial Intelligence of Everything (AIoE)
5, 12
B
Block 55, 57, 71, 137
Blockchain 2, 12-13, 15, 23, 26, 38-40,
42-43, 46, 55-56, 58-71, 77, 109, 114,
117, 119, 127-128, 130, 135-136, 142,
148, 150-156, 158-162, 164, 170, 172,
181-182, 184
Blockchain Innovation 150-151, 155, 159
Blockchain Technology 2, 12, 40, 42-43,
46, 55-59, 61-68, 70, 114, 117, 128,
150, 152, 159-160, 184
Business Sustainability 40
C
Cold Chain 26, 38, 172, 183, 224-227,
231-234, 236-237, 239-240
Cryptography 55, 68, 71
D
Data Analysis 2, 12-13, 22, 29, 38, 141,
148, 161, 171, 185-187, 190-193, 198,
200, 208, 210, 228
Data Visualization 187, 193
Decentralized Computing Infrastructure 71
Decision Making 28, 68, 83, 101, 164,
190, 221, 231
F
Firm Performance 127, 201-207, 213-219,
221, 223
G
Green Innovation 201-208, 213, 215-220,
222-223
Green Supply Chain Management 148, 184,
201-208, 213-215, 218-222
H
Heterogeneous Data Integration 73, 78, 83
Human Prediction 108, 116, 126
Hyper-Intelligent Processes 1
I
Immutability 55-56, 71
Industrial 5.0 163
Industry 4.0 1-4, 9, 11-12, 25, 27-30, 33,
38, 43-46, 66-67, 69-71, 109, 127, 129,
131-132, 134-135, 137-138, 163-165,
168-169, 173, 175, 177-184, 199
Industry 5.0 1-4, 9, 12, 24, 63, 108-115,
118, 120, 125-133, 136-137, 164-165,
168-171, 173, 175-184
Industry 6.0 1, 3-4, 10, 13
Information Logistics 27, 29, 32, 34-38
Innovative Business 73, 77
Intelligent Supply Chain 11, 15, 27, 29,
274
Index
130, 139
Internet of Everything (IoE) 14-15, 17, 19,
23, 25, 181
Internet of Things (IoT) 6, 17, 25, 28, 32, 40,
42, 65, 70-71, 77, 109, 131, 181, 189
IoE-Based Supply Chain 14, 19-20
IoT 5-6, 13, 15-18, 21, 23, 25-26, 28, 32-33,
37, 40-43, 50-54, 58-61, 63, 65-66,
68-71, 77, 109, 111, 113-114, 117,
119, 125, 127-128, 131, 135, 141,
161, 181, 189, 224, 231
K
Key Performance Indicators 25, 27, 29,
34-35, 37, 148
L
Linked Data 106
Logistics 14-15, 17, 20-24, 26-39, 42, 58,
64, 66, 69-70, 73, 76, 78, 109, 127-130,
132-137, 143, 146-148, 157, 160, 163-
185, 187-189, 192, 194, 196, 198, 218,
221, 224-227, 231, 233-235, 239-240
Logistics 5.0 163-170, 173-177, 183
O
Ontology 73, 79, 84-85, 89, 91-92, 96-99,
102, 104, 106
Optimisation 185
P
Privacy Protection 118-119, 126
Provenance 71
R
Relational Database 79, 93-94, 99, 106-107
Resource Description Framework (RDF)
73, 86, 107
S
SAGEMCom Tunisia 187, 192, 198
Semantic Web Technologies 73, 102-103
Smart Commerce 139
Smart Supply Chain 13-15, 21, 25, 28-29,
31, 70, 108-109, 111-119, 125-127,
130-138, 152
SmartPLS 201, 209-210, 214
SPARQL 73, 85-86, 91-92, 98-99, 102,
104-105, 107
SPARQL Query 92, 98-99, 104-105, 107
SQL 62, 79, 85, 92, 94, 107
Structured Data 2, 107
Supply Chain 1-3, 8-17, 19-33, 35-43, 46-
47, 49-55, 58, 61-71, 73-80, 83, 101,
105-119, 125-138, 140-141, 143-151,
153-167, 169, 177-179, 181, 183-190,
192, 194, 198-199, 201-208, 213-215,
218-222, 224, 226, 232, 234-240
Supply Chain 6.0 1, 8, 10-12
Supply Chain Management 1-2, 13-14, 17,
19-26, 28-29, 32-33, 36-38, 41-43, 50,
52, 58, 61, 64, 66, 68-71, 73-74, 76,
105-107, 112, 115, 117-118, 126-128,
130, 134-138, 140-141, 143, 145-146,
148-149, 161, 164, 167, 169, 181,
183-184, 189-190, 198-199, 201-208,
213-215, 218-222, 224, 238, 240
Sustainability 1, 12-13, 20, 24-25, 35, 38,
40-45, 64, 70, 73, 110-111, 116, 126,
128-131, 134-135, 137, 139, 147, 165-
166, 169, 174-175, 179, 181-184, 204,
217-219, 221-223, 233
T
Transportation 9, 24, 28, 32-33, 37-39, 42,
54, 62, 73, 76-78, 128, 132, 140, 146,
152, 157-159, 167, 169, 171-172, 175,
179, 181-183, 185, 193, 218
W
Warehouse 9, 32, 42, 72, 76-77, 144, 169,
172, 183, 196, 225
X
XML 79-80, 86-88, 92, 96, 98, 102, 107
275
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Purpose – The aim of the study is to integrate food hygiene into quantity food production systems. Design/methodology/approach – The present study illustrates the concepts of food hygiene and standard operation of food production systems in detail, and it integrates both of these concepts evidencing that an integrated system can be used as a primary function of every establishment with regard to serving food safely. Findings – A successful food hygiene system must consist of four components: maintaining safe conditions for the food from the time of purchasing to the time it is served to the customer, development of hygienic behavior in the employees that come in contact, in any way, with the customers’ meal, maintaining clean and sanitary facilities, and application of an adequate Pest Control Management system. Originality/value – By integrating food hygiene into the operational systems, a powerful message will be sent to the personnel; that food hygiene is a primary function of the establishment and must at all times be enforced.
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The product lines are required to be flexible enough to handle a variety of products and packs, with the same efficiency and interest to the dairy and beverage industries. The ability to quickly change the product on the line in dictated by the need to have smaller and multiple production runs on a day-to-day basis. The proliferation of innovative products and different size containers requires more frequent resetting of the production lines. The impact of the legal requirements in the area of health and hygiene providing satisfactory level of safety is also growing. Some of the beneficial characteristics for manufacturing of value added products include flexibility, production efficiency, and system integration. Production efficiency is considered to be a driving factor for the success of dairy operation, and increasingly important to prevent downtime caused by the failure of parts or components in the line.
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Purpose This paper aims to analyze and identify commonalities and differences between the supermarket industry and its logistics capabilities in developed economies such as North America, the European Union and Japan, as well as the emerging Asian economy of India. Design/methodology/approach A qualitative analysis, based on data, other pertinent information gathered from reports on various economies within the supermarket industry and personal interactions with a few supermarket chains managers, is used to derive various insights of strategic value in retailing and distribution. Major industry practices and logistics trends are examined and answers are sought to important business questions. Findings The results of analysis show that the supermarket industry is customizing operating strategies. Efficient consumer response (ECR) standards are becoming a common method used to increase the supermarket supply chain efficiencies that are driving logistics trends within the industry. The trends include expanded service requirements, mass customization, customer loyalty and private labeling, delivery options and increased challenges in diverse markets. Reverse logistics, electronic point of sale data collection and management of supply chain by third‐ and fourth‐party logistics providers are also becoming increasingly important for the supermarket industry. Practical implications Advancements in transportation and storage technologies, including breakthrough technologies to improve supermarket operation to the level of leading automobile manufacturers, present increased challenges and opportunities to the supermarket industry. In addition, changing consumer tastes offer companies in developed countries as well as developing countries like India, the chance to garner increased revenues. It is imperative for supermarkets to heed changing buying habits, particularly in developed countries, which have highly mature/competitive markets. Although supermarkets within developed and developing countries may face different challenges, consumers everywhere still focus on value, convenience, variety and a better shopping experience. Originality/value This paper provides increased understanding of the strategic retailing and distribution issues present in the supermarket industry and examines a number of significant business questions pertaining to logistical trends. A unique juxtaposition of the supermarket industry within developed and developing economies provides various insights into the commonalities and differences within various countries studied.
Article
Purpose The main objectives of the paper are to identify the needs in data that are considered as fundamental for the efficient food traceability and to introduce a generic framework (architecture) of traceability data management that will act as guideline for all entities/food business operators involved. Design/methodology/approach The traceability system introduced is based on the implementation of XML (eXtensible Markup Language) technology. In the first stage, the necessary traceability data are identified and categorized. In the second stage, the selected data are transformed and inserted into a five‐element generic framework/model, using PML (Physical Markup Language), which is a standard technology of XML. Findings The assessment of information communication and diffusion underlines that the particular model is simple in use and user‐friendly, by enabling information flow through conventional technologies. Practical implications The main feature of this framework is the simplicity in use and the ability of communicating information through commonly accessible means such as the internet, e‐mail, and cell phones. This makes it particularly easy to use, even when it comes to the base of the supply chains (farmers, fishermen, cattle breeders, etc). Originality/value An integrated traceability system must be able to file and communicate information regarding product quality and origin, and consumer safety. The main features of such a system include adequate “filtering” of information, information extracting, from already existed databases, harmonization with international codification standards, internet standards and up to date technologies. The framework presented in this paper fulfills all the above features.
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Purpose Organic food offers a good case to study the relationships of actors in the food chain, because of its added value based on production methods, the imbalance of power and the different value systems. The obvious problems identified call for solutions that include more efficient collaboration. This paper attempts to determine the presence of collaboration along the Finnish organic food chain, from the farmers to the multiple retailers. Collaboration is approached by focusing on communication and trust between the actors. Design/methodology/approach A case study with two cases. Finding Collaboration was found only in a few dyadic relationships, not at the chain level. Findings suggest that high frequency of communication is not an indication of collaboration, and is less important than the quality of communication in the creation of trust, the prerequisite for collaboration. Particularly the competence demonstrated as an exchange partner, seemed to hold the key for a trustful relationship. Neither the power imbalance nor the different value systems were insuperable obstacles for trustful and collaborative relationship. Practical implications Results encourage small organic suppliers to develop their relationships with mainstream retailers by improving their overall competence as exchange partners. To create trust and collaboration, the actors need to consider the influence of their action not only on the adjacent actors, but on the relationships within the whole organic food chain. Originality/value These findings contribute to existing knowledge concerning the nature of relationships along a food chain, and in particular, those of an organic food chain.