Collaborative and Communicative Logistics

Flows Management Using the Internet of Things

Loubna Terrada ✉ , Jamila Bakkoury, Mohamed El Khaili, and Azeddine Khiat

( )

Laboratory Signals, Distributed Systems and Artificial Intelligence, ENSET Mohammedia,

Hassan II University, Casablanca, Morocco
loubna.terrada@gmail.com, jamila.bakkoury@gmail.com,
elkhailimed@gmail.com, azeddine.khiat@gmail.com

Abstract. Companies primarily use tools based on information systems such as

ERP, WMS, APS, TMS or other similar existing systems to keep their logistics
flows under control. The Internet of Things arrival (IoT) was a revolution in the
field of Information and Communication Technologies (ICT), with the aim of
extracting, transferring, storing, processing and sharing the necessary information
at every logistics activity. In addition, for a better collaboration and interopera‐
bility improvement in the Supply Chain, it is important to automatically commu‐
nicate and share each operation related to the logistics flows to the actors involved.
In this paper we give a general overview of the use of IoT in the supply Chain
Management to ensure the convenience of its activities and that it is thus collab‐
orative and communicative.

Keywords: Internet of things · Supply chain management · Communication

Collaboration · Interoperability

1 Introduction

This paper is the subject of a review on the exploitation of the IoT in the logistics flows
management. The set of the information logistics systems have become imperative for
supply chain management, it is also subjected to several challenges and struggles
requiring improvements to existing operating practices. The heterogeneity of the plat‐
forms and technologies used by the various links in the supply chain has made it difficult
to identify, track and control the flows in the chain in real time. Therefore, The Internet
of things advent brings a new approach to collect, transfer, store and share information
throughout the SC for better collaboration and communication between supply chain
stockholders in order to optimize the overall costs and to increase the revenue through
enhancing services [1]. In this study, we present the set of definitions related to the
concepts of the Supply chain aggregated to the IoT. The last section will deal with the
exploitation of connected objects in the management of logistics flows within the frame‐
work of a value system.

© Springer International Publishing AG, part of Springer Nature 2019

J. Mizera-Pietraszko et al. (Eds.): RTIS 2017, AISC 756, pp. 216–224, 2019.
https://doi.org/10.1007/978-3-319-91337-7_21
 Collaborative and Communicative Logistics Flows Management 217

2 Overview of the Supply Chain Management

The Supply Chain Management concept has appeared since 1980s [2], in order to abolish
the old concepts - which must be put into questioned– that limited logistics in few func‐
tions (i.e. warehousing and Transport). Since, the SCM has become a crucial pillar of
innovation in the management of material, financial and informational flows from supplier
level to production, distribution until the final customer as shown in the Fig. 1.

Fig. 1. An example of Supply Chain structure [3]

The SCM’s principle is to maintain cooperative relationships between stockholders by

developing structured logistical links to achieve overall performance up to the end
customer. This supply chain is essentially set up to efficiently and efficiently produce and
make products available to end consumers by creating values throughout the whole
process, based on the performance of each stakeholder, but each entity directs the supply
chain to its own account in order to achieve its own goals and promote its interests - this
problem and generally spread among SMEs. The second common problem in the logis‐
tical process concerns uncertainty in forecasting and planning, as each stage in the Supply
chain requires a high level of stock to avoid stock-outs. And to get rid of inventory changes
that is constantly going to generate over-stock, thus, this phenomenon is called “Bullwhip
effect” [4].
SCM assumes the integration and collaboration of the set logistics activities, whose
purposes is to plan, control and manage material or non-material flows. Thus, companies
basically get hold of some tools, such as: Enterprise Resource Planning (ERP), Advanced
Planning System (APS), Warehouse Management System (WMS), and Transport Manage‐
ment System (TMS). Most of them are struggling and defeated by the current SC chal‐
lenges (e.g. coordination and overall supply chain governance, collaboration…), these
tools must deal with risk management and decision-making at the local and global level for
a decentralized supply chain; which require the interoperability of logistics networks with
the constraints of standards heterogeneity. [5]. Hence the necessity of using new ICTs
(developed or under-development) linked to IoT. Researchers estimate that the IoT will
reach billion units by 2020, and will consider all supply chain partners and linked opera‐
tions, from production line and warehousing to retail and delivery. Industrial enterprises
tend to invest in the IoT to set up and optimize their workflows, to reduce their factory
costs and improve supply efficiency [1]. In the next section we will describe in detail the
concept and functioning of the IoT.
218 L. Terrada et al.

3 Internet of Things (IoT)

The Internet of Things (IoT), also called the Internet of Everything or the Industrial
Internet, is a new technology paradigm ideated as a global network of machines and
devices able to interact with each other [1]. Recently, the world has experienced an impres‐
sive development of the multimedia world. This is due to the technical and technological
progress and major innovations that have revolutionized the world of telecommunication,
IT cloud (i.e. Cloud Computing), social media, Internet of Things…
The latter represents the extension of the internet of things and places in the physical
world. While the Internet usually is not extended beyond the electronic world, the Internet
of Things represents the exchange of information and data from devices present in the real
world to the Internet. Indeed, the Internet of Things is regarded as the third evolution of the
Internet, known as Web 3.0 [6]. The objects constituting the “Internet of objects” called
“connected”, “communicating” or “smart”.
Currently connected or intelligent objects are used everywhere, they invaded the world
and impacted our personal and professional lives. They generate billions of information
that must be processed and analyzed then stored to make them usable. According to Cisco
[7] 50 to 80 billion connected devices will be in circulation worldwide in 2020. In fact, a
connected object is an object whose primary purpose is not to be computing devices or web
access interface but that the addition of an internet connection has added additional value
in terms of features, information and interaction with its environment [8]. Today, connected
objects begin to take part in our daily lives and are translated into several and different
objects in multiple fields of application [9].

3.1 The Various Forms of Internet of Things

The Internet of Things has a universal character to design objects connected to various
uses. There are 3 types of IoT [10]:
• Connected objects through Chips and Smart labels
• M2M [11]
• Computers, Smartphone, Tabs
Since 2010, these three families have experienced a strong evolution with a number of
connected objects in the world not exceeding 5 billion according to IDATE statistics in
2013 [11]. Five years after, the world of connected objects has evolved greatly to reach the
40 billion intelligent devices in circulation around the world. According to the predic‐
tions, this number could be between 50 and 80 billion in the world by 2020 [12].

3.2 Architecture of IoT

The Internet of Things architecture can be illustrated by different models with various
supports IoT technologies [13]. It serves to illustrate how they are interconnected in
different scenarios. The Fig. 2 illustrates the role of the various processes of the architec‐
ture of IoT:
 Collaborative and Communicative Logistics Flows Management 219

• Sensors to transform a physical quantity analog to a digital signal.

• Connect allows interfacing a specialized object network to a standard IP network
(LAN) or consumer devices.
• Store calls made to aggregate raw data produced in real time, Meta tagged, arriving
in unpredictable ways.
• Present indicates the ability to return the information in a comprehensible way by
humans, while providing a means to do it and/or interact.

Fig. 2. Architecture modelling of IoT

In industrial firms, five IoT technologies are basically used for the deployment of
successful IoT-based products and services [1], namely:
– Radio frequency identification (RFID);
– Wireless sensor networks (WSN);
– Middleware;
– Cloud computing;
– IoT application software.

3.3 Functionning of IoT

The Internet of Things (IoT) concept allows objects to the relationship between what
happens online and the physical world. Christened in 1999 by researcher Kevin Ashton
center at MIT (Massachusetts Institute of Technology), his team launched the promotion of
open connectivity of all objects using RFID (Radio Frequency IDentification). The first
solutions in this area seemed simple calling itself Machine To Machine (M2M), they are
based on the fact that a single type of hardware/sensor connects via a service gateway
(Internet) to a single application. Then these solutions have become more complex while
using several sensor/display/actuator using a multi serving gateway (Internet TCP/IP) to a
220 L. Terrada et al.

single application. Since the work more complicated because there are other standards taken
into consideration as the geographic dispersion and increased device data consumers [10].
The functioning of the Internet of Things via cloud is shown in the illustration below (Fig. 3):

Fig. 3. IoT functioning via Cloud

3.4 The Application Areas of IoT

The Internet of Things can be used in plenty and different domains, such as: Healthcare
[14], Industry, sport, Smart cities, Smart grids, logistics…

3.5 Benefits and Drawbacks of IoT

The Internet of Things provides many benefits for people and companies. However, this
new innovation is still limited by sensitive safety issues. So what are these different advan‐
tages and disadvantages? (Table 1).

Table 1. Benefits and drawbacks of IoT

Benefits Drawbacks
• Lead time processing • Data security
• Accessibility & mobility: « anytime, • Personal privacy
anywhere, any device» • Data massivity
• Tracking ability • Environment issues
• Modern life style

4 Using the Internet of Things for Logistics Performance

Improvement

4.1 A New Concept of Logistic Management

An enhanced real-time visibility into the product physical flows is a crucial step to ensure
a proper Business Management, from this necessity derives the idea to design new
 Collaborative and Communicative Logistics Flows Management 221

applications able to ensure and enhance the tracking function and to avoid stock-out and
over-stock generated by increasing swings in inventory i.e. using RFID tags or GSM
tags [15]. Nowadays, firms are trying to make their processes intelligent by improving
the inventory function in order to avoid stopping the activities of the warehouse when
the quantities in stocks can be obtained directly by census of the number of products
present in a perimeter. This technology is already widely deployed in several industries
(e.g. Decathlon and Amazon). The Fig. 4 shows an example of the overall architecture
of the solution where RFID technology is used to ensure the tracking in the SC of a wine
wholesaler. This section presents the main components of the platform and related tech‐
nologies. Indeed, we will focus on the main functions such as RFIDentification, tracking
and labelling, communication, transmission and data sharing [16].

Fig. 4. Using RFID in a SC of wine

This model is an IoT based wine bottles-routing inventory and SCM information
sharing system that involves: RFID tags, position, handled readers and other similar
kind of devices. The installed database has the central position in the divided system, it
can insure the communication between suppliers and distributors whereby loading and
inventory workers. As we can see the RFID helps the company to optimize pick-up and
delivery routes between delivery workshops and warehouses. It also optimizes the
resources of the handling by determining the most appropriate equipments, and aim to
reverse logistics as well.

4.2 Identification and Tracking Using RFID

In the literature, researchers focus on the emphasis of the RFID in the Supply chain field
to increase the availability of stock in the warehouse and to optimize the overall costs
that represent an important indicator for performance SC improvement. RFID
222 L. Terrada et al.

technologies are emerging in areas as diverse as logistics. The incorporation of such

devices into industrial products could lead to a world in which objects communicate and
interact with each other and with humans, i.e. “the Internet of things” (Fig. 5).

Fig. 5. RFID functioning [5]

According to our literature researches, Mitton et al. categorize RFID tags and
describe the different types of this mutant technology coming along with burning
research topics with sample application. There are two types of RFID tags; Passive
RFID: it is a tag that retro-modulates the wave coming from the interrogator to transmit
information. It does not include RF transmitters. The passive tag generally uses the wave
(magnetic or electromagnetic) coming from the interrogator to supply the on-board
electronic circuit. And the active RFID tags known by their autonomy and embark an
RF transmitter. The communication with the interrogator in this case is peer-to-peer
type. This type of tag usually has a power source and is often coupled with a temperature
or humidity sensors.
Thus, the main issue of the industrial manufacturing is the high cost of the RFID
tags that limits the use of this technology. While companies strive to label each product
to ensure better traceability and easy inventory, and make the use of barcodes an outdated
application, which opens up new avenues for research to explore[17].
The RFID is basically used to provide solutions to problems related to Bullwhip
effect mentioned in the second section, thus the benefits of using such a technology in
the SCM can be summed up as following [18]:
– Inventory accuracy
– Diminishing error rate
– Customer relationship management
– Security
– Productivity gains
– Tracking enhancement
– Real time visibility of the overall SC components
According to surveys, the RFID solution has helped enterprises to increase the avail‐
ability of stock in their stores, improve the efficiency of their retail and logistics
 Collaborative and Communicative Logistics Flows Management 223

platforms. For instance, Decathlon saw an 11% increase in sales from July 2014 to July
2015, and the company attributes part of that growth to the RFID deployment [19]. In
fact, Decathlon began a global rollout of an RFID solution for tracking throughout its
supply chain. Today, RFID is improving efficiencies in all Decathlon facilities with
1,030 stores and 43 warehouses. The company has tagged 1.4 billion items.
A communicative supply chain is based on a set of performance indicators (KPI)
aggregated to the deployment of RFID in warehousing and management inventory, such
as [18] (Table 2):

Table 2. Performance indicators linked to RFID solution in the SCM

KPI in warehousing and KPI in production KPI in transport
management inventory
- Costs - Cost - Route optimization
- Inventory level - Lead time - Quality
- Inventory turns - Quality - Operating costs
- Delivery time - Productivity - Delivery time
- Good returns - Service level
- Stock-out condition
- Service level
- Resource optimization

It is noteworthy that major issue is related to the warehousing and management

inventory. Consequently, the majority of researchers in this field has focused on this
weak point, thus highlighting the leading causes of its failures and the effects of using
IoT to get over the inventory inaccuracy. However, this IoT technology is still facing
struggles, inasmuch as a good RFID functioning, IT infrastructure must be able to deal
with the huge amount of data generated by millions of transactions and transformations
[19]. The amount of information is not only huge; it is also accessible “instantly”. In
addition, several labels can be read simultaneously.

5 Conclusion

Logistics today is an integrative philosophy of flows management technologies. Indeed,

Supply Chain Management is an important part of the scope of new technologies and
concepts related to IoT. However, there are still a lot of challenges and struggles to
adopting firms in terms of privacy, security [18], data explosion, integration and sharing
on Cloud platforms [14].
Sensors and devices used in the IoT generate massive amount of data that need to
be processed and stored as well [18]. Consequently, researchers and practitioners aim
today to improve the performance of networks in terms of throughput and energy
consumption to convey data from sensors as well as the improvement of algorithms in
the processing of large volumes and heterogeneous data.
This research is contributing to the improvement of logistics performance by using
the new technologies aggregated into the Internet of Things which present today a new
224 L. Terrada et al.

trend in the architecture of the information systems whose standards and protocols of
communication is subjected to the voluminous mass and diversity of data sources.

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