Dissertation - The competitive advantage of Industry 4.0 for Food and Beverage companies in their logistical and transportation functions of the Supply Chain

MSc International Management
Masters Dissertation
SESSION 2017/2018
The competitive advantage of Industry 4.0 for Food
and Beverage companies in their logistical and
transportation functions of the Supply Chain
AUTHOR
Arthur Comman
40339949
Supervisor: Dr Valerie Egdell

The competitive advantage of Industry 4.0 for Food and Beverage
companies in their logistical and storage functions of the Supply Chain
By
Arthur Comman
August, 2018
Thesis submitted in partial fulfilment
Of the Degree of
Master of Science
In
[International Management]

I
Declaration
I declare that the work undertaken for this MSc Dissertation has been undertaken by myself and
the final Dissertation produced by me. The work has not been submitted in part or in whole in
regard to any other academic qualification.
I have checked my work via turnitin and submitted a summary to my supervisor
Title of Dissertation:
The competitive advantage of Industry 4.0 for 3PL companies running logistical and storage
functions for Food and Beverage manufacturers.
Name (print): Arthur COMMAN
Signature:
Date: 08/08/2018

II
Abstract
21ST century is driven by digitalization and new technologies. In the early 2000s,
we have seen changes in our daily life; the rise of smartphones, Internet in
general, low cost and electric cars, smaller and smarter packaging or huge
improvements on multimedia objects (TV, MP3).
We are now at the beginning of the 4th Industrial revolution called Industry 4.0 and
linked directly to digitalization. It is not only changing our daily lives, but also the
enterprise world and many companies begin to show interest in some of these
new technologies.
The Food and Beverage market is affected by this industrial revolution. As
consumers are more and more complicated in their demand and expectations,
companies need to be able to provide the right offer at the right time.
The aim of the research will first be to understand how Industry 4.0 technologies
can benefit the logistics and transportation functions of the Supply Chain of Food
and Beverage goods. Then, it will be to determinate how it might become a
competitive advantage for companies dealing with these goods in this specific
Supply Chain.
To do so, the study will be based on existing academic reviews and semi-
structured interviews will be conducted with Industry 4.0 experts and the different
actors of the Supply Chain in the Food and Beverage sector (raw food producers,
3PL companies running logistic and storage functions in this market and Food and
Beverage manufacturers and distributors).

III
Acknowledgements
First, I want to thank Dr. Valerie Egdell who was my supervisor for this research
project. A dissertation is not an easy work and even less for a foreign student with
different writing rules in a different language. Dr. Egdell understood this situation
and provides guidelines all along the project when I needed ones.
I also would like to thank my mother and father for always supporting me in
everything I undertake. They have always been honest and fair with me, giving me
advice and sharing their personal experience.
Other thanks will be for Stanley Poke, who really helped me to start this project as
he was writing a Doctor on Industry 4.0. Thank you for your availability and your
precious time.
Finally, I would like to thank Manon, my girlfriend, who supported me during this
long period of study and helped me a lot in my daily tasks. Thank you for keeping
me focused and conveying me a positive attitude.

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Table of contents
Declaration......................................................................................................................................... I
Abstract............................................................................................................................................. II
Acknowledgements........................................................................................................................ III
Table of contents............................................................................................................................IV
List of tables & figures ...................................................................................................................VI
I. Introduction, research purpose and objectives ................................................................... 1
A. Background of the study and importance of the research ............................................ 1
B. Overall aim and objectives................................................................................................. 9
C. Research approach....................................................................................................... 10
D. Structure of the study.................................................................................................... 11
II. Literature review .................................................................................................................... 12
A. Technologies applicable in the Food and Beverage logistical and transportation
functions...................................................................................................................................... 12
1. Big data........................................................................................................................... 12
2. Blockchain ...................................................................................................................... 14
3. Internet of Things (IoT) ................................................................................................. 21
4. Software.......................................................................................................................... 24
5. Smart manufacturing..................................................................................................... 25
6. Nanotechnologies.......................................................................................................... 26
7. 3D printing ...................................................................................................................... 27
8. Automation and robots.................................................................................................. 28
9. Cyber-Physical Systems (CPS)................................................................................... 32
10. Virtual, Augmented and Mixed reality..................................................................... 33
B. Cybersecurity ..................................................................................................................... 35
C. Conclusion of this section............................................................................................. 36
III. Research method .............................................................................................................. 38
A. Introduction......................................................................................................................... 38
B. Research purpose and strategy ...................................................................................... 38
1. Ontology = objectivism VS subjectivism .................................................................... 38
2. Epistemology = interpretivism vs positivism.............................................................. 39
3. Qualitative rather than quantitative............................................................................. 40
4. Longitudinal and Cross sectional ................................................................................ 40

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5. Inductive rather than deductive ................................................................................... 40
C. Secondary data.............................................................................................................. 41
1. Advantages of secondary data.................................................................................... 41
2. Disadvantages of secondary data............................................................................... 42
D. Primary data................................................................................................................... 42
1. Design ............................................................................................................................. 43
2. Advantages of interviews ............................................................................................. 45
3. Disadvantages of interviews ........................................................................................ 45
4. Preparation..................................................................................................................... 46
5. Process ........................................................................................................................... 46
E. Risks.................................................................................................................................... 47
F. Reliability............................................................................................................................. 48
G. Ethics............................................................................................................................... 48
H. Conclusion...................................................................................................................... 49
IV. Data analysis...................................................................................................................... 50
A. Introduction......................................................................................................................... 50
B. Industry 4.0 definition........................................................................................................ 50
C. Industry 4.0 technologies applicable for logistic and transportation functions in
the Food and Beverage Industry............................................................................................. 51
D. Cybersecurity ................................................................................................................. 54
E. Implementations and development of these technologies.......................................... 55
F. Market overview................................................................................................................. 56
G. Threats, obstacles, challenges and fears identified ................................................. 57
H. Conclusion...................................................................................................................... 58
V. Conclusions and recommendations ................................................................................... 59
A. Introduction......................................................................................................................... 59
B. Research approach and findings .................................................................................... 59
C. Limitations and potential of the study......................................................................... 62
D. Recommendations for further research ..................................................................... 63

VI
List of tables & figures
List successively tables and figures used in the dissertation.
Figure 1: Industry 4.0 framework and contributing digital technologies
Figure 2: Vertical and horizontal integration of the Supply Chain
Figure 3: Expected ROI on Industry 4.0 Investment
Figure 4: Dissertation framework
Figure 5: How does Blockchain work?
Figure 6: Blockchain security
Figure 7: Differences between VR, AR and MR
Table 1: Vertical and Horizontal Integration examples
Table 2. Interviewees responses

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I. Introduction, research purpose and objectives
A. Background of the study and importance of the research
Industry 4.0 is the first industrial revolution driven by new technologies, following
the digitalization concept rather than by a new energy. It will enable companies to:
• have a better decision-making process
• be able to predict their maintenance, their production or their global needs
and to improve the coordination between humans and machines (Sentryo
company, 2017).
Besides this, Tjahjono et al. (2017) identified the main benefits from Industry 4.0
for the Food and Beverage market:
• Better flexibility
• Optimized quality of goods
• Improved efficiency
• Better productivity
These different outcomes can be reached thanks to the emerging technologies
contained in the term Industry 4.0 and are resumed in the following figure:

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Figure 1. Retrieved from Smith, J., Bahl-Schneider, U., Schrauf, S, Stroh, S.,
Vedso, J., (2016). Industry 4.0: Building the digital enterprise Industrial
manufacturing key findings (Rep.).
This model is very interesting as it describes the main technologies of Industry 4.0
and their interactions. Industry 4.0 is defined by the gathering of an enormous
quantity of data (from sensors, connected devices, humans, machines) which will
be stored on clouds and then analyzed and shared using Big Data and Internet of
things technologies. Industry 4.0 is also based on three key concepts:
1. Digitalization and integration of vertical and horizontal value chains
2. Digitalization of products and services offerings
3. Digital Business models and customers access
These objectives are all linked to digitalization which is the key word of this
industrial revolution. The first one is dealing with the improved cooperation into the
different actors of the supply chain both horizontally (at the same level; for
example, manufacturers) and vertically (at different levels; for example,
manufacturers, distributors and, producers). Products and services are then
digitalized and offered online, everything is searchable on the Internet. Finally,

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business models are driven by this digitalization and focus on customers need and
expectations.
These technologies will be detailed further in the dissertation, but small definitions
of each one are required to better understand the subject:
• Cloud computing: digital clouds are places of data storage with an open
access which might be chargeable (Schlaepfer et al., 2014). It is like an
online library.
• Mobiles devices: represent all the connected devices such as smartphones
or laptops that you can bring everywhere (Cambridge dictionary).
• Internet of Things (IoT) platforms: IoT platforms refer to platforms of data
exchange. IoT is the connection of all mobile devices, sensors, connected
machines and every object with an Internet connection. All these objects
gather data and share it on IoT platforms (Clarke, 2017).
• Location detection technologies: also known as tracking technologies, these
are technologies providing real-time data using sensors or RFID tags for
example (Australian Government). Data collected could be location,
temperature or humidity level.
• Advanced human-machine interfaces: using software and hardware, human
and machines are able to communicate using translated signals, improving
their efficiency (Technopedia).
• IoT and Big Data combined with smart sensors improving authentication
and fraud detection.
Big Data analytics and advanced algorithms: data gathered by people or
companies through the use of smart and connected devices, surveys,
reports or any data posted on the Internet. This amount of data is enormous
and can be analyzed and sorted (Cambridge University). Multilevel
customer interaction and customer profiling is also improved with Big Data.
Industry 4.0 enables to better understand market trends and customers’
needs. Companies are encouraged to interact more to improve the brand
image and customer confidence.
Smart sensors are able to gather data such as temperature, location or
humidity level and transmit it through the Internet. They can also be

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programmed to send specific alerts when a limit previously fixed by the
company has been exceeded (PC encyclopedia).
• 3D printing: they are increasingly widespread; plastic ones are cheaper and
even private individuals can own it. Regarding Food and Beverage
companies, it becomes interesting mainly in maintenance processes when
there is a need to replace a defective part quickly or when designing
packaging prototypes.
• Augmented reality and wearables: augmented reality is the principle of
improving the vision of our environment using connected glasses or smart
devices (Merriam Webster Dictionary).
This list is non-exhaustive, and the technologies analyzed in the literature review
will differ according to the findings. Indeed, Industry 4.0 definition is not fixed, and
technologies involved might be different depending on the points of views. That is
why depending on the different research, technologies highlighted might be
different. This will enable the author to cite any types of technology applicable to
logistic and storage functions of the Food and Beverage Supply Chain.
These technologies can be qualified as hard or soft technologies. The word
technology has often been defined as machines used in production chains (Clark
and Staunton, 1989) or “machinery and equipment developed from the application
of scientific knowledge” (Oxford dictionary).
Indeed, hard technologies can be described as machines or equipment optimizing
processes. But these technologies come from human knowledge, skills, and
intelligence which help to create and monitor these machines (Burgess and Gules,
1998). Therefore, soft technologies are dealing with technological knowledge.
The combination of both soft and hard technologies is a key concept for
companies to improve the overall efficiency (Botchie et al., 2018). Hard
technologies examples can be robots, computers, 3D printers or interactive
glasses.
Soft technologies examples are software, methodologies, Artificial Intelligence or
Internet of Things.

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Industry 4.0 technologies aim to improve both vertical and horizontal integration in
the Supply Chain. The following figure has been created by the author to help the
understanding of vertical and horizontal integration in the Food and Beverage
Industry:
Figure 2. Vertical and horizontal integration of the Supply Chain. Source:
Comman (2018)
The aim of vertical integration in this supply chain is to create a collaborative
movement among all the different actors which will result in improvements in
traceability and transparency (Carter and Rogers, 2008). Consumers are more
involved in the supply chain and their expectations can be easily met.
Horizontal integration is basically the improvement of a company functioning that
could be internal or external (M. Mitzsheva). Internally, a company can optimize its
processes by integrating new technologies or diversifying its operations. It can
also be achieved externally by merging or acquiring such as an agricultural
cooperative.

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A study by the consulting Company Deloitte (2015) gives different examples of
Industry 4.0 technologies and concepts involved in vertical and horizontal
integrations:
Table 1. Vertical and Horizontal Integration examples. Retrieved from Deloitte
(2015).
Knowing the key concepts and technologies of Industry 4.0, it is now crucial to
explain how it is linked to the Food and Beverage market and how these
technologies can benefit transportation and logistics functions.
First, the transportation function represents the part of the Supply Chain where
goods are transported from a point A to a point B. This could be from to producer
to the manufacturer or every other time where goods are moved to a different
location.
Secondly, the logistic function represents the part of the Supply Chain dealing with
goods flows and storage. This also includes the prediction of the changing
customer’s demand (Council of Supply Chain Management Professionals).

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Therefore, it is important to be aware of how Industry 4.0 can benefit both of these
functions. Tjahjono et al. (2017) wrote a paper regarding Industry 4.0 impacts for
the Supply Chain. It shows that Industry 4.0 will have a different impact on
transportation and logistics functions. Transportation will be one of the most
affected functions of the Supply Chain as almost 62% of Industry 4.0 impacts in
this field would be opportunities and only 7,7% would be threats. The rest is
shared between threats and opportunities. Regarding the storage function, almost
67% can be opportunities which are a higher rate than transportation but the other
33% could be either threats or opportunities. This is the implementation of Industry
4.0 which will balance the rest of the percentage between opportunities and
threats. The risks are therefore higher, and companies need to be careful when
trying to implement these solutions in this part of the Supply Chain.
Among all the technologies included in the concept of Industry 4.0, the study
reveals that the only ones which will are really advantaging companies currently
are virtual reality, 3D printers, and the possibility to realize virtual simulation. The
problem with the rest of the technologies is that they represent opportunities and
threats as they are all interconnected, and it appears that the boundaries between
some technologies are very tight. Therefore, companies need to have a perfect
understanding of each technology before investing in it.
Then, the Food and Industry sector has been chosen as the transportation and
logistics of such good is very specific. This market is highly secured as it deals
with our health and many norms need to be respected. This market is also very
interesting to study because there are very specific concerns such as the respect
of the cold chain or the high need to be responsive. The impact of Industry 4.0 on
this market is huge and J. Shinton (2015) gave four criteria which show that this
market has better opportunities than others:
• There is a constant and historical pressure regarding costs reduction in this
market. Innovations have always been part of the Food and Beverage
Industry and therefore this new Industrial revolution will impact it.
• Traceability is one of the main concerns regarding this Industry. Smart
devices, Big Data, sensors and IoT will enhance it and enable this
traceability to be fully detailed and easy access even for customers.

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• Customers’ demand and expectations is constantly changing in this market.
Industry 4.0 technologies will enable companies to be more flexible and
therefore to improve customer’s satisfaction.
• Energy consumption and environmental footprints are actual concerns too.
Industry 4.0 technologies will enable to make costs reduction and enhance
pollution reduction.
The outcomes of investing in Industry 4.0 are not totally proved yet and the
majority of companies are anxious about these huge investments yet (Paul
Redmond, 2017). The study of PricewaterhouseCoopers supports that investing in
Industry 4.0 might seem risky, but the expected Return on Investment is enormous
and quick as shown in the following figure which is focused on transportation and
logistics functions:
Figure 3. Retrieved from Smith, J., Bahl-Schneider, U., Schrauf, S, Stroh, S.,
Vedso, J., (2016). Industry 4.0: Building the digital enterprise Industrial
manufacturing key findings (Rep.).
Companies which are not willing to follow Industry 4.0 trends will have difficulties
to stay competitive against the ones which actually invest in it (Martin Strutt, 2017).
This has been supported by the authors of the Report from
PricewaterhouseCoopers who state that companies need to think about Industry
4.0 trends such as digitalization and data analysis if they want to remain
competitive in their market. It has been proved for the logistics and transportation

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functions because these are two functions driven by costs reduction and not
considering such opportunities would be dangerous for them. The biggest issue
raised by this study is that for transports and logistics companies there is a “Lack
of digital culture and training.” Moreover, companies in this sector are not yet
investing a lot in Industry 4.0 and that could be explained by the pressure they
suffer on their margins (Jenkins, 2017).
The key terms and concepts have been detailed in this introduction. This basis will
help the readers to better understand the following chapters. The key concerns
and the choice of the Food and Beverage industry, as well as the logistic and
transportation functions have also been justified. Industry 4.0 impact will be one
the highest on this market and understand its implementation and the actual
situation is crucial for this dissertation. The risks or eventual obstacles also need
to be identified by companies in order to prevent it.
The aim of this study will be to show how companies actually see these
technologies, either as opportunities or threats and how they are hedging against
identified risks. It will also be to explain which technologies are applicable to the
Food and Beverage market and how it will be useful to it.
B. Overall aim and objectives
The aim of the research project is to identify the key technologies of Industry 4.0
and how they can be competitive advantages for Food and Beverage companies
in their logistics and storage functions.
The aim of this dissertation could be divided into 4 objectives:
• Objective 1: Identify key technologies of Industry 4.0 by gathering
published academic literature.
• Objective 2: Relate the technologies found to logistics and transportation
functions for the Food and Beverage market.
• Objective 3: Conduct semi-structured interviews with:
o Experts in the domain of Supply Chain future and Industry 4.0.

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o Different actors responsive of Industry 4.0 or innovation for Food and
Beverage companies.
• Objective 4: Ascertain that Industry 4.0 is a real competitive advantage for
Food and Beverage companies in their logistics and transportation
functions and establish the key steps to get through when implementing
Industry 4.0 into a business with a reminder of the risks.
The accomplishment of the objectives will support the research project. The
literature review will help to get a global understanding of what are Industry 4.0 s
in the particular context of Food and Beverage storage and transportation.
C. Research approach
Firstly, secondary data will be collected by doing research on existing literature
and studies on the different technologies of Industry 4.0. The technologies will be
defined, and examples of their application for this Industry will be given. Key
concepts will also be covered including threats and limitations.
Then, primary data will be collected by semi-structured interviews. Interviewees
will be employees working in companies linked to the Food and Beverage sector
and experts in Industry 4.0 technologies. This will help to have personal opinion
and experiences on Industry 4.0 utilization nowadays.

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D. Structure of the study
The dissertation will follow the framework designed by Saunders et al. (2009):
Figure 4. Dissertation Framework. Comman (2018). Adapted from Saunders et al.
(2009). Research Methods for Business Students, 5th edition. Harlow: Prentice
Hall.
The first chapter results in the introduction of the topic to set the background and
give the reader a basis on the topic to understand the entire dissertation and the
choices made. Objectives will also be announced to justify the different
researches.
Then the literature review will serve to analyze what has already been studied on
this topic.
The third chapter will consist of establishing and justifying the research methods.
In Chapter four, the outcomes of primary data will be detailed.
Finally, using both primary and secondary data the author will be able to reach the
dissertation objectives and to give recommendations to the readers of this paper.
Define and explane research topic and
objectives
Analyze and critically evaluate existing
literature on the topic
Establish the reseach structure and defined
how it will be conducted and why
Analyze the research outcomes
Conclusion on the findings and
recommandations

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II. Literature review
The aim of this chapter will be to gather data from existing literature reviews. The
chapter will be divided into different parts which will define Industry 4.0
technologies and how they are applied to the Food and Beverage logistic and
transportation functions. Brief definitions of Industry 4.0 concepts and technologies
have been given previously in the dissertation to improve the understanding of this
section. Then, key concepts, threat, and limitations will also be discussed.
The aim of this literature review will also be to identify what these technologies can
bring or improve for Food and Beverage companies.
Finally, the conclusion will summarize the key findings of this chapter and enable
the researcher to design the interviews in order to gather specific data to complete
this literature review.
A. Technologies applicable in the Food and Beverage logistical
and transportation functions
1. Big data
IBM defined Big Data as data which are:
1. Available in volume on the Internet
2. Generated at a high speed
3. From any types and any sources
4. Valid and secure
Big Data in the Food industry can serve to reference foodborne pathogens (Strawn
et al., 2015). One technique is currently used; the Whole Genome Sequencing
(WGS) which can give information on the 3 to 6 million nucleotides responsive to
pathogens. These data are referenced and classified by different organizations
which could be:

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• Private-public partnerships such as the 100K Foodborne Pathogen
Genome Project which has an objective of classifying 100 000 foodborne
pathogens
• Association of different organizations such as the US Centers for Disease
Control and Prevention; the U.S. Food and Drug, Administration (FDA), and
the U.S. Dept. of Agriculture’s Food Safety and Inspection Service as well
as public health agencies.
Food security is primordial for Food and Beverage companies. In the United
States only, Strawn et al. (2015) estimated the number of illness due to foodborne
pathogens at 48 million with 128 000 hospitalization and 3000 deaths. The cost of
these illnesses is estimated at 152$ billion annually (Scallan et al. 2011) Products
contaminated need to be identified or protected before being sold.
Food and Beverage companies can us these data to adjust their sensors or norms
and gather the right information about their goods. They will be able to set limits
and alert thresholds in order to know if their products are not saleable anymore
due to these pathogens. Therefore, the quality and security will be ensured within
both logistics and transportation sections. Packaging can also be adjusted to
prevent these pathogens.
Jones et al. (2004) identified a current and past problem in the Food and Beverage
industry which can be treated by Big Data. Security audits of Food and Beverage
companies are made only once or a few times per year. Moreover, companies are
often aware of the audit and can prepare everything to be clean, the audit will not
be totally representative of the reality. Big Data can store information in real-time
all year long. Thus, audits companies can analyze these data which will transcribe
the reality and obligate companies to pay even more attention to security. Walmart
used smartphones connected by Bluetooth to gather the temperature of their
chicken cooked. In the studied period, 1,4 million of temperatures have been
gathered and audits have been realized in depth using this technology.
Other application of Big Data has been detailed by the company NewGenApps
specialized in digital clouds and Big Data:

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• Transportation function is improved as connected devices in general can
transmit real time data on traffic or weather. Therefore, trips can be
optimized, and the goods will be delivered quicker and safer.
• As previous sources mentioned it, food quality and safety can be analyzed
and ensured with connected sensors. Stocks can also be better monitored
using data analysis of market trends.
• Data stored and analyzed can also serve to prevent and predict impacts of
temperature, transportation or storage on food and beverage goods.
A limit or challenge of Big Data is to analyze and classify any type of information
(audio, video, image, figures) to use it in the most efficient way. The amount and
reliability of data collected is also a concern, companies need to be able to sort out
the useful information to avoid the overload which would be harmful.
However, the correct use of Big Data, food safety, quality and traceability can be
improved.
2. Blockchain
Transportation and logistics functions have been identified as one of the top 5
Industry which are the most impacted by Blockchain.
The following scheme explains perfectly what is Blockchain and how this
technology works:

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Figure 5. How does Blockchain work? Retrieved from Walker, A. M. (2018).
Security Trends 2018: Blockchain Explained. Retrieved from
https://blog.g2crowd.com/blog/trends/cybersecurity/2018-cs/blockchain/

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Blockchain facilitates transactions realized between companies. Every single
transaction is stored and added to the chain. Contracts are also stored and every
other legal paper of companies. The concept is highly secured, and access needs
to be given to companies before they access stored data. A P2P network means
that every computer transmitting data on the Blockchain network is both a client
and a server.
Firstly, a company will send a notification of transaction on the Blockchain
network. This notification will pass different tests and be broadcasted to the
companies implicated through the network. Once the transaction has collected the
required approvals, the transaction is accepted and added to the chain. The
information becomes permanent and non-modifiable to keep a trace of every
action undertaken by the different actors.
Therefore, Blockchain is like a giant digital cloud where all partners are verified
and trusted ones, and where they can share all the data they want to improve their
collaboration.
Blockchain not only stored and built contracts or transactions chronology. It can
also do the same with products life. Data from their production to the sale to
consumers can be stored and traced with private access to it. Therefore, it is a
secure place for every actor of the Food and Beverage Supply Chain to store their
date and exchange it to improve their efficiency.
The company IBM has invested in Blockchain technology to offer a solution for
other companies. The Supply Chain Digital Magazine of May 2018 published an
article about their solution and its utility. High M. has interviewed Kutz, the
Program Director of Watson IoT and Blockchain IBM who has a real expertise in
the subject. He affirmed the efficacy of their solution; "Typically, it takes more than
18 hours to track back a package of mangoes. With Blockchain, it only takes 2,2
seconds". This project has been called IBM’s Food Trust Blockchain solution and
has been developed in collaboration with food and beverage leaders as Golden
States Food (GSF) to be sure to respond to the real need of targeted companies.
The main advantages of this solution are that it:
• Improves traceability and transparency
• Facilitates and optimizes transportation of goods

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• Helps the company to make strategic decisions
• Improves the Supply Chain efficiency
• Improves goods safety
• Reduces overall costs of production.
Kutz (2018) ensures the safety of his solution and certify that companies can track
products and transactions in real-time. The Supply Chain is also more flexible, and
changes can be better controlled. Blockchain has an advantage; combined with
IoT, data are stored in a permanent way and are visible only by the parts
authorized. Kutz states that Blockchain enables all actors, from the farmer to the
customer and all along the Supply Chain process, to know where the product
comes from and any information useful to improve quality and transport or storage
efficiency. This enables transparency on a business to business basis but also on
a business to consumer basis. To illustrate their solution, they explain their
collaboration with GSF. They use their Blockchain solution with sensors connected
to IoT technology. The data collected help them to manage their fleet. They
analyze real-time data such as the weather, the traffic or telematics. It improves a
lot the efficiency of delivery, and it also improves the driver safety and explores
new improvement areas such as energy consumption. Thanks to IoT and
Blockchain technologies, these data can be shared online, so all the Supply Chain
partners can benefit from it. Kutz then gave three main benefits when combining
IoT with Blockchain:
• Detect potential problems upstream
• Cluster transactions
• Analyzing all these data can bring new ideas to business.
He also explains the need for better transparency and traceability in the food and
beverage market by citing the World Health Organization "one in 10 people fall ill
due to contaminated food each year". Moreover, this market knew many scandals
such as the horse meat. Such scandals can cost the life of the company, so it is
important to make a stronger emphasis on the traceability of these products. The
relation with consumers will also be strengthened as publishing or giving free
access to these types of data totally answers to their current demand. If
contaminated food manages to get through the controls and products are sold

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despite their non-conformity; the data stored before thanks to Blockchain and IoT
will speed up recalls because defective goods will be easily retraced and
identified.
IBM is currently working with huge Food and Beverage companies such as Nestle
or Driscoll's on other Blockchain solutions.
Blockchain is challenging as it is based on a sharing economy among partners.
Everyone needs to participate so the database grows faster and help everyone to
be more competitive. Another challenge is to convince companies about the
potential of Blockchain and the fact that it will not only bring more benefits but also
improve wellbeing, reduce footprint, improve management solutions and brand
image.
Kae O'Flaherty, a journalist specialized in new technologies, has also been
interviewed in this Supply Chain Digital Magazine and answered the question
"Could Blockchain Transform Manufacturing?". According to her, Blockchain is
extremely secure and companies need to believe in it. The combination of IoT and
Blockchain is the subject of an organization called Trusted IoT Alliance created in
2017 by several companies such as Bosch or Cisco. Further information on this
foundation will be given in the IoT section.
Another interesting use of this technology has been experimented with the
company Fetch.AI. They combined Blockchain with Artificial Intelligence solutions.
Using the data shared with Blockchain technology, AI can take critical decisions as
a human or a company would do.
Franck Yiannas (2017), Director of Food Safety at Walmart, realized a conference
with IBM to discuss Blockchain solutions in the Food Industry. He states that
Blockchain is a disruptive technology difficult to handle. He takes the example of
the life of a mango. From the seed to the slices sold in grocery stores, it takes
some years. And once it has been sold, what happens if one product has a
problem or if a customer wants to know about the farm where it comes from? It
would be usually impossible or take a lot of time to trace the origin of each
product. But thanks to Blockchain, barcodes or RFID tags, customers and
companies can scan products and obtain the entire "biography' of the product. He

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defines traceability as: “what, when and where”; and transparency as: “what,
where, when and how”. IBM solution applied to the Food and Beverage industry
enables companies to gather data on the location, the weather, the temperature
stage and on how the product has been manufactured. He finished his conference
by giving keys outcomes of Blockchain for the Food and Beverage Industry:
• Improve food safety; for every 1% reduction in food disease in the US, it
saves the economy 700$ million
• Fresher food
• Reduce food waste; a third of the food produced on earth is wasted
• Prevent from food fraud or food scandals
• Promote responsibility for the Food and Beverage companies
• Improve and build a sustainable relationship with consumers
One advantage of Blockchain is that it is democratized and secured. Once data
has been shared and published, no one can modify it. A record is always kept and
people having access to it can only add information to it (Kshetri, 2017).
On the report by Cisco (company specialized in technologies) realized in 2016;
they estimated that in 2020, digital clouds will store 88% of total data stored in the
world. In comparison, this rate was only 65% in 2015.
The outcomes of the study show the reliability of Blockchain and clouds. The very
principle of Blockchain is the exchange and sharing of data between selected and
approved partners. Moreover, users do not all have the same rights regarding
these data. As the security is ensured by machines which crypt all this information,
it becomes very difficult for any hacker to attack digital clouds or Blockchains.
Bünger (2017) identified Supply Chain as one of the three areas (except finance)
where Blockchain can generate a ROI faster than in another domain. The study
also explains problems occurring in case of recalls. They also cite the work of
Dickson (2016) and explains that as Blockchain can track products and give the
location, time, owner, and even the flaw of raw materials and changes of owners,
this would help a lot and accelerate recalls when it happens.

20
However, some companies still are skeptical about Blockchain. The global thought
is that only 10% of actual tasks in the Supply Chain can use this technology. For
the ones who are skeptical regarding the cybersecurity Mulchandani (2017) (global
strategy and blockchain leader at Aricent) reaffirmed that Blockchain guarantees
security in contracts and on the Blockchain entrance. Blockchain is not vulnerable
to cyberattack; it improves the cybersecurity of companies. Regarding the
following figure, blockchain is able to protect data when a problem with IoT
systems happens. The following figure might reassure the skeptical regarding the
security brought by Blockchain:
Figure 6. Blockchain security. Retrieved from
https://opsession.wordpress.com/2018/01/15/driving-supply-chain-revolution-
through-blockchain-technology/
It shows that data are always encrypted thanks to Blockchain technology.
Information and material flows are exchanged and transmitted by connected
sensors. Then, IoT enables companies to fully benefit from these data and to
improve their efficiency in the prediction of, traceability and transparency.
Applied to the Food and Beverage industry; data cannot be falsified or altered, and
traceability is kept safe. This has been also claimed by Van Ostaeyen (2018), a
specialist of cybersecurity, who thinks that in a near future, robots will even use

21
IoT and Blockchain technologies to learn alone. He also confirms Blockchain will
improve traceability so there will be no more tampering problems (for products
profiting from labels such as Kobe beef).
3. Internet of Things (IoT)
Internet of Things means that companies are trying to connect every device as a
whole to gather information, share it and therefore improve efficiency. Kuhl, the
head of Applied Technology Innovation for SAP, has also described IoT for the
Asia Pacific Food Industry as the way to intelligently connect people, objects, and
businesses together. This includes machine learning, connected data enabling
predictions, the establishment of a review of existing models, integration (vertically
and horizontally), the collaboration of people sharing experiences, data and
opinion, the combination with Big Data, real-time information and network
innovation. Associated to Big Data, these data are collected at any time, shared
and classified so every actor in the Supply Chain can have access to it. The
objective is to sort the mass data to obtain Big Data, and then sort again Big Data
to obtain Smart Data. Kuhl gives 5 steps to follow when thinking about IoT:
• Explore: trends, see what others are doing and be curious about new
opportunities
• Re-imagine the future of your business, design possible scenarios
• Create and prepare a viable solution
• Validate this solution with a pilot and a test before developing it
• Scale and transform, implementation of the solution to make the business
evolve
According to him, before validating the solution it is important to think about four
questions:
1. Feasibility: is the solution applicable and realizable?
2. Scalability: give an evaluation on how technology and business ideas will
be scale
3. Desirability: does it answer to consumer demand and expectations?

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4. Viability: in a commercial and financial view, what will be the outcomes?
This is also linked to BlockChain principle. Nichols (2018) wrote an article for
Industry today where she gives an interesting statistic: “only 13 percent of
manufacturers in the food and beverage industry use the IoT and smart
manufacturing.” This embedded that this technology is not currently seen as a
competitive advantage by manufacturers. However, she states that the 13% who
have already invested in it are clearly in advance and leading the way.
IoT can help to decide whether or not the company should invest into automation
for example. It can compare the demand and make it match with available
resources.
Ercogener is a company specialized in IoT technologies, systems and software.
They give advices on how to implement IoT in companies’ systems. The first step
consists in discussing with the shareholders and employees concerned by these
changes. The aim is to identify the real need and explore existing systems on the
market. Once it has been identified, the different parts need to find an agreement
and begin to invest. Then, Ercogener helps and enables Food and Beverage
companies to use physical sensors communicating with IoT technology. Data
collected are the temperature and humidity level of their products and the
interesting point is that these data were transmitted when it becomes necessary.
Indeed, the problem of connected sensors can be the amount of useless data
transmitted that can require a higher space of storage and cost more money to
host and more time when looking for specific information. Doing this way, the
company will receive useful and relevant information at selected or needed times.
These sensors are also working with machines; as it will be explained further in
this dissertation, sensors can serve for their maintenance.
Biotraq is another company specialized in cold supply chain and control of
products' quality. Their aim is to ensure the respect of the norm ISO 22000 (this is
a food safety management system which allows certified companies to ensure
their consumers they have a secure and safe cold supply chain) and a cold supply
chain which is safe, smart and sustainable. They also use IoT to gather the data
required to respect these norms. There is an interesting fact regarding food waste:
"Between 33 and 50% of all food produced is never eaten, and the value of this

23
wasted food worth over1 trillion […] 25% of this waste happens in the Supply
Chain because there is no information on the product and its situation" (Celestial
et al.). The problem in the Food and Beverage Industry is that if any problem is
detected (temperature for example) in the Supply Chain or if a blackout occurs; all
the products affected by the event need to be thrown in the garbage. Indeed, it is
complicated to know what product has been impacted and if consumers can be in
danger or not, that is why such precautions are taken. Biotraq invented and
programmed sensors not only able to gather the temperature, the light intensity or
the level of humidity. It can also calculate the impact of the unwanted event that
occurred, so the shelf life can be adjusted if needed and the product saved. These
sensors are positioned on pallet or products. It also ensures that the product is
legally safe and consumable or find other solutions if needed.
However, this only enables companies to avoid waste and have a better
management of their resources. But it does not help consumers and provide no
further information to them as usual. That is why they are beginning to combine
IoT and Cyberphysical Systems to Blockchain technology as they also want to
develop a Business to Consumer relationship.
As mentioned in the previous chapter, the trusted IoT Alliance is a foundation with
the objectives to:
• Develop digital systems
• Develop an IoT ecosystem promoting security and interoperability
• Improve the coordination of Blockchain, IoT, and smart contracts
Companies willing to be a pioneer in IoT can join this foundation in order to be
leaders of this technology.
Some limits of IoT could be that as it can gather any types of data at any time, it
also gathers useless data which are stored and taking place on clouds.
Companies need to understand the real interest of IoT and its limits. It has already
happened that a company stored every information collected thinking IoT will
manage people as the manager will do. This has been a totally bad experience
and thinking this way is a real threat for companies.

24
Another problem companies encounter is that this new technology is complicated
to implement with previous installations. Employees have different points of view
regarding IoT; differences can be explained by their level of awareness about this
technology. The most reluctant are seeing IoT as a threat for the company
whereas others would think that it is the way to intelligently connect people and
their task to give them a global understanding of how their actions might impact
others. This opinion is interesting because people would feel and be more
invested and even take more pleasure in doing their work as it has a visible impact
on their colleagues. IoT is mainly used in the Food and Beverage industry to trace
product and keep a shared file where any player of the Supply Chain can find
information on the product life.
4. Software
So far, logistics and transportation functions in the supply chain were driven by
Warehouse Management Systems (WMS) and Transportation Management
Systems (TMS) (Barreto et al., 2017). These software were organizing the flows
and managing operations between the different players of the Supply Chain.
Industry 4.0 is there to change and optimize these tools which had some limits.
Indeed, companies were not using the same format for their files or the tools were
not considering as many factors as technologies from Industry 4.0 can analyze.
There is now the rise of Intelligent Transportation Systems (ITS) (Barreto et al.,
2017). This new type of software if fully oriented to new technologies of Industry
4.0. It is working with connected devices, sensors, IoT, Big Data or virtual reality
for example. The aim is to benefit from this technology to improve and optimize the
transportation management and the monitoring of operations. The advantages of
ITS for logistics and transportation companies dealing with food and beverage
goods are listed in the study:
• Improve safety and reliability
• Optimize travels (roads, times, manage risks)
• Better management of environmental footprint

25
5. Smart manufacturing
New Belgium, a beer manufacturer from the United States which decided to invest
into digitalization, is using Smart Manufacturing. They began to work with a
Manufacturing Execution System (MES) (Asia Pacific Food Industry, 2017). This
software analyzes and gathers data in real-time in order to have a better control
and to improve management of the production to be more efficient. It then links
these real-time data to administration and resources sector, so the company can
make the prevention on their needs (Business Dictionary). As an example, they
equipped the floor with sensors able to predict when machines need maintenance.
Therefore, the stop and maintenance can be programmed at an advantageous
time and breakdowns do not happen anymore. The outcomes were significant:
“the brewery decreased downtime by more than 50 percent, increasing Overall
Equipment Effectiveness (OEE) from 45 percent to 65 percent in just over 2 years
[…] expand production from 150 000 cases per week to 200 000 cases per week”
(Asia Pacific Food Industry, 2017). The figures speak for themselves; one
investment can reduce costs and increase production which is what any company
is seeking.
Sensors can also detect when machines are maladjusted and re-parameter it. It is
often the case for vibrating screens. With these types of controlled maintenance,
companies can avoid plants shutdown or breaks in the Supply Chain because a
production line stopped due to a maintenance problem. If a production line is
stopped, this means there that the defective line will not deliver products to
distributors and the consumers will suffer from it when shopping.
Investments are also made in Laboratory Information and Management Systems
(LIMS). These are systems which help a lot of companies which do not will to
manage the regulation part of their business. This is particularly useful for
laboratories because "it can automate day-to-day lab processes and workflows,
administration, quality, control, budget control and compliance." (SpecLIMS).

26
However, one limit of smart manufacturing is hidden in its costs. When investing in
such materials, Nichols (2018) states that it also implies the cost of learning for
employees to ensure the maintenance, and their higher level of knowledge will
bring an increase in their salary. The article also takes the example of companies
which invest too early in these new technologies before solving their own problems
which will just aggravate it. She also insists on this wrong consideration and
hierarchy of problems by citing the "80/20 rule, solving 20 percent of problems
results in financial gains of 80 percent." His conclusion on the subject is that
companies need to be sure whether it is better to invest right now or if waiting
some time and resolve more important problems before.
6. Nanotechnologies
Nanotechnologies have an interesting role to play in the supply of Food and
Beverage products. It does not only serve food producers to protect soils and
improve harvest or farming efficiency. Indeed, nanotechnologies also have
interesting qualities when dealing with food safety or food storage.
One advantage of using Nano molecules is that it “requires less samples, shorter
run times, and provide a simpler user experience without the need for large bench
top machines” (Hill et al., 2017). Food and Beverage manufacturers can now use
nanoparticles to keep their product fresher and improve the shelf life. There are
several types of nanoparticles which can be used for food and beverage goods:
• Germicidal metal and polymeric nanoparticles which destruct microbes and
keep the product safe.
• Natural and nanostructured materials protecting the food and keeping every
nutrient to keep a high quality.
• Polymer combined with antibiotics. Antibiotics will not be injected directly in
our meat, polymers will be able to detect if there is the need to release it
when threatened by microbes or pathogens.

27
Basically, this technology is used to identify any problem due to a pathogen or a
bad environment and steam it as soon as possible. This is also used to prevent
any contamination during transportation and storage phases.
The main limit of this technology is that it is very expensive, and it requires a
specific knowledge which companies often do not have. Therefore, they need to
collaborate with specialized companies which are fixing high prices.
7. 3D printing
3D printers can play a huge role in Research & Development. Indeed, a company
owning a 3D printer and knowing how to parameter it can highly reduce its
research time. When prototypes are needed, a 3D printer can do it almost instantly
whereas a normal research and development team might wait weeks before
receiving the prototype from a special supplier. Improvements can quickly be
made as companies can test prototypes more often (Nichols, 2018).
Using other technologies of Industry 4.0 as Blockchain, IoT and CPS, engineers
can use market data to adapt packaging. The aims are to meet consumers’
expectations or to improve products quality and increase their shelf life. 3D
printers can also improve the flexibility of packaging production lines and reduce
plastic consumption as packaging can have an optimized design.
The main limit is that it requires engineers trained for it and that only 3D printers
for plastic objects are affordable. Metal ones can be used to replace quicker the
defective piece of machines that broke but are far more expensive (around
$100 000 for a metal 3D printer whereas the plastic one can be found around
$1000 or even less) (Molitch-Hou, 2017).

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8. Automation and robots
The term robot can be negative for some persons so the term “cobot” is currently
emerging. Cobots promote the use of robots in collaboration with humans. The
main aim is to reinsure anxious employees thinking about their job security.
Automation and the use of robots is another trend of Industry 4.0. PMMI, an
association for Packaging and Processing Technologies, made a study (2017
Trends in Food Processing Operations) on the new trends regarding the
automated industry in the Food market. Neil (2017) detailed some interesting
points on the topic. Firstly, it is important to know that companies are willing to
move towards this process of automation of their Supply Chain as consumers
expectations are continually changing. Indeed, nowadays, Food and Beverage
products must be easy to carry, eatable on the go, certified with quality labels and
locally sourced if possible. But these trends might change in the following and
companies need to be more and more flexible and to adapt their Supply Chain as
quick as possible. However, some market trends are challenging companies. For
example, consumers want fewer curators but products with longer shelf life and
fewer antibiotics or GMO. Companies can use nanoparticles as seen before, but
they also need to adapt their production lines and packaging. Another example of
the fast-changing demand highlighted by the study is that “Four out of five
companies have more than 100 product SKUs and over half predict SKUs will
continue to increase”. Half of the companies predict they will invest in maximum of
24 months from the date of the study in automation and robotization solutions.
Moreover, the use of more automated production lines and robots enable
companies to work 24/24 and 7/7 all year long. Actually, the study reveals that half
of the companies foresee to invest on equipment within the next two years. Half of
these companies identified the need for these technologies mainly for process
equipment (50% of them) whereas three out of four are thinking about packaging
equipment. These two needs are slightly similar and often studied by the same
team of engineers. The difference between employing humans and using robots is
that robots take less time to learn and they need to be taught things only one time
to keep understand it. Mistakes also might be multiplied by humans and learning
costs might also rise. The study also states that companies need to “process
machinery improvements that focus on cleanability, flexibility in changeover and

29
operator safety” (PMMI, 2017). Links can be there made to other technologies: as
explained in the introduction, interoperability and interconnectivity are two of
Industry 4.0 key characteristics. Robots can be connected or interconnected and
featured with Artificial Intelligence. Therefore, robots can learn things alone and
ensure their own maintenance. Moreover, robots can be connected to the Internet
of Things and use Big Data. Machines would be able to predict and monitor
production needs alone and provide to consumers the products they want faster
than ever.
Nichols (2018) gives her opinion on robots and automation in the magazine
Foodsafetytech. She gives four advantages that automation can have for the Food
and Beverage Industry:
• More precise quality control
Food quality is a huge concern nowadays and consumers are being stricter
about it. A study from Quality Assurance explained that consumers are
looking for “natural and organic food”. Shoup (2018) added that consumers
are looking for certified or labeled food. To do so, companies need to better
supply their products but also ensure food safety all along their supply
chain. Theresa Lee, a product manager from Toshiba America Business
Solutions has given an interesting interview to Blair-Frasier (2018) on the
subject of labels for Food Supply Chain. Food Labels for the Supply Chain
quality, efficiency and traceability are a current topic. The Food Safety
Modernization Act (the United States, U.S. Department of Health and
Human Services) is a good application of this idea and is focused on
traceability and safety. This has been designed to create an easy and
quick-to-access database regarding this entire product lifecycle. Consumers
can be reassured by it and companies are more reactive in case of a recall.
The problem is that with humans, controls are regular but not systematic
and an historic of problems and remedial actions is not always kept.
Moreover, humans make more mistakes than robots which are
programmed to be perfect. Some examples of mistakes could be a bad
dispatch of meat in prepared meals which can create huge scandals such
as the horsemeat one (Levitt, 2016). This is also one of the reasons why
consumers are paying more and more attention to what they eat. Using

30
robots or automated systems, problems can be detected earlier. Sensors
can be implemented in such machines and they can test products 24/24
and 7/7. Nichols (2018) states automation in the Food and Beverage
Industry will definitely reduce scandals, facilitates recalls and ensure a good
maintenance of the Supply Chain. Repetitive and dangerous tasks can also
be performed by robots such as an employee cutting meat carcass all day
long with a big and sharp knife.
• Improved and almost foolproof traceability
Linked to quality concerns, traceability is a very important point in the Food
Industry. Combined with sensors and using Big Data, contaminated
products (by pathogens, disease, mold, poison) can be identified and traced
easily and quickly. Machines store every data such as temperature,
location, number of bacteria cells and can detect contaminated products
almost instantly. This reduces costs of recall and ensures a better brand
image in the long term. Using automation also help to identify what part of
the Supply Chain might have recurring problems detected.
• Employees safety
Machines are mainly used to replace humans with repetitive and dangerous
tasks. Artificial Intelligence is less used as it more expensive than robots
doing repetitive tasks so the majority of employees will not be fire but just
gain job safety in daily tasks. For example, order pickers can preserve their
back thanks to robotics (Michel, 2018).
• More efficient Supply Chain
Machines and automation do not take vacations and cannot be sick. They
also do not complain and can work 365 days a year (except during
maintenance sessions). It is also more precise and can work faster than
humans. Therefore, companies will gain efficiency in their Supply Chain.
However, the use of robots and more automated supply chains has some limits.
For examples, employees are concerned about their jobs. If machines are able to
do it faster and better, companies might fire them. One thing to understand is that
jobs will not be simply deleted; they will be changed, and qualifications required
will change too. The use of robots will be mainly used to replace dangerous and
repetitive tasks. This has been reinforced by Nichols (2018); she admits that

31
implementing robots and automation systems can scare employees as it has been
created to replace specific tasks. She stated that employees need to be
reassured. Robots or automated systems will not steal their jobs; it will enhance
their jobs and reduce as much as possible repetitive and dangerous tasks. This
particular Industry fluctuates a lot; following uncontrollable factors such as the
weather or consumers behaviors. An example of that could be yogurts. In general,
companies have been forced by the market to adapt their production lines. Indeed,
some studies such as the one from Euromonitor International have proved that
consumers prefer to buy yogurts by two and not by four or eight anymore.
Therefore, companies have been forced to adapt their production in order to
satisfy consumers changing demand. Nichols (2018) continues by stating that
adapting production lines and workforce size according to market fluctuation is
easier for small companies. But when it comes to international Leaders, it can cost
a lot and it can be risky when the demand is lower.
The Food Safety Modernization Act (the United States, U.S. Department of Health
and Human Services) is also giving limits to consider regarding automation in this
market. Food regulations and laws represent a huge list and companies need to
respect it in order to keep a good brand image. Moreover, one of the main
concerns is focused on food, energy and packaging waste. It gives drivers for
companies such as combining robots and machines tasks as much as they can.
For example, one machine can laminate the products and put them into cartons
instead of two separated machines. Flexibility stays a key concept, but attention is
carefully paid on general waste (Nichols, 2018).
The development and number of robots and cobots is expected to increase a lot in
the coming years. The World Robotic Report from 2017 has estimated a growth of
18% in 2017 with an expected increase of 15% by 2020.
However, automation can have some limits and be very dangerous for companies.
For example, a company looking to the future might invest in automation systems
and robots but without paying too much interest in market parameters (Nichols,
2018). It is important to invest in production means but keeping an eye on the

32
demand to avoid overproduction. Having machines running three days a week will
be catastrophic.
9. Cyber-Physical Systems (CPS)
CPS have been defined by the National Institute of Standards and Technology as
“”smart” systems are co-engineered interacting networks of physical and
computational components. These systems will provide the foundation of our
critical infrastructure, form the basis of emerging and future smart services, and
improve our quality of life in many areas”. The aim is to monitor machines, so they
can interact together and share data to optimize the entire Supply Chain.
CPS associated with Blockchain and IoT technologies enable the different players
of the Supply Chain to work together and exchange data. Therefore, Food and
Beverage companies can highly improve traceability with these data.
Manufacturers are also helped in their production lines as data exchanged are not
only logistical ones but also sales or marketing information. Therefore, the demand
can be analyzed, and production and flows can follow it. Global Data
Synchronization Network (GDSD) is an example of real-time data sharing system.
Information is primarily sent by suppliers to the rest of the Supply Chain.
Consumers can also have access to some supplementary data on their product
once distributors checked the consistency of it. With GDSD systems, data are
shared and classified which help to keep useful information that can be reused.
This can be linked to horizontal integration of the Supply Chain which has been
explained previously.
RFID tags are part of CPS and are one of the best improvements regarding food
traceability and recall (Nichols, 2018). These are smart sensors which
communicate data wirelessly and enable companies to always know where their
product is, on which pallet, environmental conditions (to avoid any deterioration),
product information… The use of sensors or RFID tags can also help to reduce
environmental footprints by knowing were the best improvements can be applied.
The demand is also analyzed and using CPS, the Supply Chain can be adapted

33
rapidly to any changes and any needs. The allocation of humans and materials or
resources is also better managed. One of CPS principle is also to store all the data
collected to prevent future problems or keep a trace of existing ones and how they
have been resolved.
The main limit of CPS is linked to cybersecurity which needs to be fully
considered.
10. Virtual, Augmented and Mixed reality
The rise of connected glasses is part of Industry 4.0. There are actually three
different applications with these screens and glasses which have all different
benefits and different objectives. The following figure has been realized by
Cardinal (2017) and explains these differences:
Figure 7. Differences between VR, AR and MR (Cardinal, 2016). Retrieved from
Cardinal, D. (2017, May 16). What Is Mixed Reality, and Can It Take Augmented
Reality Mainstream? https://www.extremetech.com/extreme/249328-mixed-reality-
can-take-augmented-reality-mainstream

34
The following definitions have been collected from J. Tokareva who is a software
development consultant for the company Quora (enabling people to exchange on
chosen topics).
• Virtual reality is the most complete immersion. The person wearing VR
glasses will be immersed into a digital world and have no vision of what is
surrounding him in reality.
• Augmented reality is taking the virtual world and adding specific information
or overlaying objects.
• Mixed reality is augmented reality with the possibility for the user to interact
with the digital objects or information visible with the glasses.
Arnold (2018) also wrote an article for Forbes on the implication of these glasses
for the Supply Chain.
The first outcome is that order pickers will highly benefit from augmented reality.
This has already been used in some DHL plants and can be adapted to any
industry needing orders preparation. Order pickers will see the path they need to
follow in order to optimize their moves. They will also be able to see the objects
they need to pick, and the quantity required. Therefore, they will save time and
efforts while improving their efficiency.
Then, both VR and AR can be used to increase the trend of decentralization.
People can be “digitally moved” into a plant in another country to see how the
production lines are working or to visit the plant. It also helps employees which can
be skeptical about Industry 4.0 technologies. For example, an employee working
in a production workshop can see in advance how his environment will be
redesigned in order get used to it. Maintenance can also be decentralized;
engineers from a plant can help a less skilled technician having a breakdown on a
production line and requiring help to find the solution. Therefore, breakdown times
will be highly reduced.
Regarding the transportation functions, AR and VR can help drivers in their job.
They can see traffic or weather information on their windshields and the
information displayed are analyzed to improve its routes. Moreover, when
delivering goods to another company of the supply chain or to customers, VR and

35
AR can improve the security of the transfer by verifying that this is the right person
which receives the goods by scanning him.
W. Goh (2018), director of Cognex, a company specialized in VR and AR added to
these advantages that food safety is ensured and improved. VR and AR systems
can help employees to detect defective products on the Supply Chain. Packaging
can also be checked to ensure that goods are hermetically sealed.
Busel (2017) identified the main concerns with AR and VR as that these systems
might be hard to monitor for non-skilled persons. A good Internet connection is
also primordial, and it must be perfectly displayed with no latency. The legal
aspects of privacy and safety are also issues. Moreover; like 3D glasses, VR and
AR screens can cause digital fatigues to some people.
B. Cybersecurity
The rise of connected devices, IoT, Blockchain or new software and Big Data
highly increase the risks of digital piracy. Cybersecurity is not a new technology
from Industry 4.0 but rather an issue brought by these new technologies (Barreto
et al., 2017).
Risks regarding cybersecurity are often underestimated by companies. Bareto et
al. (2017) advise companies to create a prevention plan in order to prevent any
risk and to know how to react if it occurs. Some security standards exist and if
companies decide to be committed to it, it proves that they are aware of the risks
and they can prevent it. These standards are:
• ISO/IEC 27000 family of standards from the International Organization for
Standardization / International Electrotechnical Commission Joint Technical
Committee (ISO/IEC_JTC1) which ascertains the security of information
globally.
• 800-series which deal with computer security and are from the National
Institute of Standards and Technology.

36
Another concern is about cybersecurity regarding IoT technologies. Security when
transmitting information has always been a concern for companies. IoT technology
implies much more complex threats regarding security (Weber et al., 2016).
Beckstrom (2014), a Cybersecurity Expert and former President and Chief
Executive Officer of Internet Corporation for Assigned Names and Numbers states
that with the rise of IoT and connected devices, everything become interconnected
and therefore become hackable.
Some companies bet on the number of connected and smart devices by 2020:
• Gartner Press release “Gartner Says 6.4 Billion Connected “Things” Will Be
in Use in 2016, Up 30 Percent From 2015 and will reach 20,8 billion by
2020” (Van der Meulen, 2015).
• Cisco white paper (2015) stated “IoT is expected to grow from more than 12
billion devices in 2015 to 50 billion by 2020 “
The interesting thing is not that estimations differ, but that estimations are
enormous, and risks are exponentially growing. It can be linked to our subject
because truck drivers are using connected smartphones; and companies running
logistical or transportation tasks in the Food and Beverage Industry use
computers, tablets or smartphones which are also connected and become
therefore vulnerable.
The amount of data stored is constantly growing and interconnected smart devices
such as sensors will increase this number. Once a device is connected, it
becomes a gateway for hackers and that is why companies need to highly
consider cybersecurity.
C. Conclusion of this section
As stated in the background of the study section; technologies described in the
literature review were sometimes different from the ones cited in the introduction.
However, these technologies are related to one another and sometimes they even
confuse themselves.

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This strengthens the fact that Industry 4.0 technologies are hard to understand
and to apply to our businesses. The appreciation of each company differs and
makes it harder for them to implement these technologies.
However, the main topics involved by these technologies can be resumed as:
• The use of connected devices or CPS exchanging together and enabling
the supply chain to benefit from better vertical and horizontal integration.
These devices are also optimized with technologies of IoT, Big Data and
Blockchain.
• Automation, robots, 3D printers other machines which are part of smart
factories.
• Augmented and virtual reality.
• Cybersecurity as an issue to deal with

38
III. Research method
A. Introduction
First, the aim of the research is to analyze the positive impacts of Industry 4.0 in
the Supply Chain of Food & Beverage goods. To achieve this dissertation, both
primary and secondary data were required in order to build strong and reliable
conclusions. According to Kwok, the main objective of an academic research is to
generate knowledge to share it with others. In this study, primary research came
as a completion of secondary research. And secondary research was required as
only five interviews were conducted, which cannot enable the author to build fully
reliable conclusions.
Adams et al (2007) explained the term “research method” as for how researches
are driven and designed by their authors. In this chapter, these choices of data
collection methods will be explained, and their limitations and reliability will be
discussed (Bryman & Bell, 2007). These techniques have been used to answer
the objectives fixed by the study:
B. Research purpose and strategy
This section will detail how methods have been chosen to conduct the research
and answer to the objectives fixed.
1. Ontology = objectivism VS subjectivism
Ontology represents the perception of reality. The researcher had to choose
between objectivism and subjectivism (Bryman & Bell, 2015). In this study, the
subjective method has been used. As it considers that reality vary according to
social actors, their actions and their perceptions (Saunders et al., 2012; Hudson &

39
Ozanne, 1988). Therefore, the reality is not fixed, and different views might be
considering. In this study, it will be helpful for the qualitative interviews as we are
examining different opinions regarding Industry 4.0 technologies (Saunders et al.,
2009).
It is important to begin the choice of methods by ontology ones as it is directly set
how reality is perceived and therefore drives the entire dissertation.
One limit of this subjectivist approach would be that the knowledge collected might
not be fully reliable as it has been collected considering several personal opinions.
Research also needs to be well conducted in order to reach objectives fixed.
Indeed, a positivist approach would have set theories which would have been
confirmed by the data collected. Therefore, subjectivism is more flexible (Carson
et al., 2001) and it is important to make the difference between valuable facts and
personal opinions, motivations or experiences (Hudson & Ozanne, 1988).
2. Epistemology = interpretivism vs positivism
Epistemology is basically the nature of knowledge collected. In this study, the
interpretivist method has been used as it fits perfectly with qualitative methods and
subjectivism (Saunders et al., 2009). The aim of primary research is to have a
relationship promoting collaboration and interaction between the author and
interviewees. The purpose is to understand and consider different point of views
which are unique and specific in order to have a global understanding of the
situation (Edirisingha, 2012). The researcher following an interpretivist approach is
seen as a “detective” whereas the one following the positivist approach is looking
for facts and is therefore qualified as a “natural scientist” (Bryman & Bell, 2015).
The limit is that as this approach considers personal experiences and opinions, the
reliability and validity of data collected need to be confirmed by the secondary
research. Therefore, a strong correlation between primary and secondary research
is sought in order to lower this risk. (J. Dudovskiy, 2016).

40
3. Qualitative rather than quantitative
The author decided to pursue qualitative research. A focus on a small and specific
sample was preferable for this study to go deeper in the understanding. As the
topic is very technical, having a quantitative approach would not have enabled the
researcher to gather useful and quality data. Moreover, qualitative studies enable
researches to find causal relationships and to develop justification regarding these
causes (Maxwell, 2004; Biggam, 2008).
A limit of qualitative research would be the reliability. As the size of the sample is
quite reduced compared to quantitative research; data could be too focused on
personal motivation and personal experience of interviewees. Therefore, it would
be harder to generalize the data collected as it might be too subjective. Another
risk is that qualitative researches take more time than quantitative ones (Collis &
Hussey, 2009) so the researcher needs to be prepared and well-organized to
complete an interview.
4. Longitudinal and Cross sectional
This study is clearly is longitudinal as Industry 4.0 is by definition the new
Industrial revolution and therefore a trend that will be part of our future (Adams et
al., 2007)
5. Inductive rather than deductive
This research will have an inductive approach as Industry 4.0 is a new
phenomenon and only a few theories have already been published. Thus, the
creation of theories about the benefits of Industry 4.0 will be enabled by gathering
data on the subject (Greener, 2008). As interviews will be semi-structured, an
inductive approach will perfectly fit and enable the study to be more flexible and
gather specific data to develop conclusions (Saunders et al., 2009). It also enables

41
the findings of the research to be more open-ended as it will not confirm a specific
hypothesis (Dey, 1993).
The main risk is again to generalize the data gathered during the interview.
Primary research needs to be conducted paying attention to the reliability of data
collected. The combination of a strong literature review which will be detailed in
the next section is essential to avoid biased conclusions.
C. Secondary data
Secondary data represents the data already existing and linked to the topic of the
dissertation that the researchers will use to build the foundation of the research. It
is collected by a third party external from the author (DJS Research Ltd., 2010).
Due to the short time allocated for realizing the interviews and to the complexity of
getting answers from potential interviewees, secondary data were crucial to
support the findings and to establish the recommendations of the study. Data have
mainly been gathered from academic's reviews and papers, magazines, company
reports or professional blogs. The accuracy of these sources has always been
verified to ensure the reliability of this study.
1. Advantages of secondary data
o Usually free and less time-consuming compared to primary data, the
rise of the Internet and data stored on it helps a lot researcher as it
improves the accessibility of knowledge.
o According to the topic and the amount of secondary data existing,
generalizations might be already done or easier to do.
o Secondary data from academic's papers or previous researches are
often certified and therefore their reliability is tangible.

42
o Help to know the best way to gather primary data.
2. Disadvantages of secondary data
o The amount of data available is enormous; it is important for the
researcher to understand the real aim of the study and to choose
whether a data might bring something to the research or not.
o The reliability of data needs to be verified to use it in the dissertation,
as well as the date of publication (especially for the topic of this
paper; an academic research on Industry 4.0 published before 2010
would have no sense).
o The accessibility of data; even if Universities often have partnerships
with academic databases, some academic papers still protected and
need to be purchased before accessing to it.
Secondary data help to complete primary data and the combination of the two
enables the researcher to draw strong and reliable recommendations (Saunders et
al., 2009). It is primordial for the researcher to be critical regarding the validity of
secondary data.
D. Primary data
Primary data represents data collected by the researcher alone. It could be either
qualitative if collected from smaller samples, or quantitative samples are larger
(Easterby-Smith et al. 2008). This choice belongs to the author and is driven by
the research itself.
The University of Minnesota listed the six main methods to gather primary data:
o Interviews
o Questionnaires / surveys
o Observations

43
o Focus groups
o Case studies
o Notes and records
First, it was planned that the study needed at least twelve interviewees to be fully
reliable. The plan was to have at least four persons working in the Food and
Beverage industry and linked to logistics and transportation functions.
Requests and emails to invite potential interviewees to share their knowledge have
been sent from the 13th of July. The main problem has been the summer period
and the lack of interest from the respondents.
In full, 30 persons have been identified as potential interviewees and only five of
them respond to the request.
The consequence for this study will be the lack of reliability from the interviews as
the sample characteristics have not been reached.
1. Design
Data will be gathered by conducting qualitative research through semi-structured
one-to-one interviews. Interviews will enable to collect the different point of views
from the different companies according to their opinion and level of knowledge on
the subject (McNamara, 1999).
The limits and risks of conducting semi-structured interviews are (Keller &
Conradin, 2018):
• Small sample so the researcher needs to avoid generalizing the findings
• Complex method needing interviewer qualities; questions need to give the
interviewee the orientation of the answer sought and to let him a certain
freedom
• Semi-structured interviews are time-consuming as it needs a preparation
and the discussion might last for a long time (30 minutes to 1 hour for this
study)

44
There will be three different categories of interviewees:
• Experts in the domain of Supply Chain future. In this context, experts mean
consultants, researchers or lecturers in the Supply Chain.
• Logistic and transportation managers of 3PL companies running these
functions for Food & Beverage manufacturers.
• Logistic and transportation managers of Food & Beverage companies using
3PL companies for these activities.
To choose the interviewees, purposive sampling will be used, this is a non-
probability sampling and target specific people. As explained before, data sought
are very specific so there is a need to interview the qualified and concert people.
This has been done through the professional network LinkedIn and using the
author’s personal network.
These persons will be chosen through recommendations, personal network and
professional networks like LinkedIn. Due to the timetable and geographical issues,
most interviews will be conducted through phone or video calls but in the best
case; this will be a face-to-face interview.
However, interviewing persons in the summer period is quite complicated. Many of
them would be on vacations or too busy because of the lack of personnel in their
company. The author has been able to interview five different persons which are
definitely not a reliable representation of the actual market. The interesting fact is
that among them, some were exercising the job of consultant. Their experience
would be easier to generalize as they are aware of the current situation of Industry
4.0 on the market.
Interviews will be analyzed following the Framework analysis developed by the
National Centre for Social Research. The framework follows 7 steps (Gale et al.,
2013):
a) Transcription: using a voice recorder or notes to avoid any loss when
transcribing the interview.
b) Familiarization: being familiar with the content of the interview.
c) Coding: getting through the interview and generating a code to interpret
every little thing that might be interesting (emotions, values, structure).

45
d) Establishing an analytical framework: grouping codes under categories.
e) Using the analytical framework: applying the framework and organizing
every data in order.
f) Charting: resuming the data divided into categories in a matrix to facilitate
the understanding.
g) Mapping and Interpretation: identify key findings or concepts.
2. Advantages of interviews
o Specific persons can be targeted with a more useful knowledge
regarding the topic.
o As interviewees are highly-qualified persons, they might be more
interested to share their knowledge through an interview rather than
through a survey
o Questions are not closed, and they can therefore share everything
they know about the topic.
o Interviews are a real exchange with the author of the research that
might reinsure interviewees in the use of their responses (Saunders
et al, 2009).
o This also helps the author to develop his own network.
3. Disadvantages of interviews
o Interviews are taking time, so busy persons might not be able to
participate to it.
o Interviewee might feel uncomfortable if they believe that the author of
the dissertation expects a high level of knowledge from them.
Therefore, they might exaggerate things (Bechhofer & Paterson,
2000).
o As we are all different, some misunderstandings might occur, and
some information might not be well translated (Watson, 2006).
o The researcher has the possibility to choose in his notes what will be
kept for the dissertation or not. Bad choices could there occur.

46
4. Preparation
As the interviews have been realized by phone or video calls, there were some
repetitive steps:
o Test the device used (computer or smartphone)
o Verify Internet connection
o Be in a silent environment to catch every information from the
interview
In the preparation stage, interviewees will also receive the consent sheet and the
privacy notice to inform them about the terms and conditions of the interview.
5. Process
Firstly, the interview method needed to be chosen (Stuckey, 2013).
o Structured interviews: follow the script, same questions pre-
established by the researcher, in the same order and ask to each
interview. Usually shorter than the other methods.
o Semi-structured interviews: the interview is driven by the topic and
the researcher has some key question but with no answer in mind.
The responses of the interviewees are free, and it might create new
questions, interviewees will also have more liberty to share their
personal experiences.
o Narrative or open interviews: follow the will of the interviewee; it
looks more like a conversation.
The choice has been to conduct semi-structured interviews because the main
topic will be Industry 4.0 and the interview will test the level of awareness of
interviewees and how familiar they are with these technologies.
The risk is to miss some key points in the interview as the interviewee is
encouraged to share his experience and to give personal answers.

47
The questions have been designed to create a guideline which enables the
interviewee to be flexible and to share his personal experience and knowledge
(Adams et al. 2007).
Three types of questions have been used (Saunders et al., 2009):
o Open questions: the interview is totally free on the answer and can
share a personal experience. These questions are easily
recognizable as they contain words such as why, how or what.
o Probing questions: words used are quite similar as the ones of open
questions, but a direction is given in the question.
o Closed questions: shorts questions which often bring shorts answers
or simple confirmations.
Questions and interviews notes can be found in Appendix section.
E. Risks
When conducting a research, some risks need to be evaluated and considered by
the author regarding primary and secondary data.
First, the author needs to be neutral regarding the data gathered to have an
objective voice on the topic. Biases need to be avoided and knowledge needs to
be challenged.
Before conducting the research, the author must be sure that data already exist on
the topic and are accessible. If not, the research would not be achievable.
Security and reliability of data collected also need to be ensured before using it in
the research paper.

48
F. Reliability
The author will follow Napier University guidance regarding the reliability of data
collected. Sources have always been checked and the author always tried to
follow the three concepts of critical thinking, critical reading and critical writing.
Modules regarding the validity and consistency of the research paper have been
followed by the author.
J. Dudovskiy linked reliability of a research to consistency. Data need to be
checked and double checked to ensure their validity. Parallels between data
ensure the validity of it. Indeed, if a phenomenon occurs several times or if several
sources affirm the same thing, then the reliability of the source is improved. Data
collected and the findings of the study can also be compared to similar research
on the topic of the dissertation.
The reliability of a research paper is also important for the readers and
professional which might be interested by the topic. If the dissertation is not
consistent, it would be useless and non-usable by other in the future.
G. Ethics
The ethical issues mainly arise when dealing with interviews. The respect between
the interviewer and the interviewee is primordial. Greener (2008) and Bryman &
Bell (2015) established key concepts to consider in order being ethical in our
dissertation:
• Protect the interviewee’s identity if necessary
• Informed the interviewee of what he needs to know about the interview
procedure and give him a general explanation of the project
• Set and respect interview rules (time, topic), do not harm the interviewee
• Ask the interviewee if he accepts to be recorded and be published
• Provide the possibility to sign a confidentiality agreement if asked by the
interviewee

49
• Do not cheat or falsify interviews’ results
As data will also be gathered from existing literature on the topic, there is an
obligation to respect the authors and avoid any form of plagiarism in the research.
H. Conclusion
This chapter settles the rules and the different methods considered by the author
before conducting the research.
The approaches chosen by the author to reach the objectives are:
• Subjective to consider different opinions and point of views.
• Interpretivism as it works well combining with qualitative interviews and a
subjective approach. Moreover, the data sought are not facts but rather
personal experiences.
• Qualitative as this is a specific topic which requires specific knowledge.
• Longitudinal because Industry 4.0 is a trend.
• Inductive as there is none real theory about the concept due to its novelty.
• Semi-structured to gather personal experience based on the topic and be
able to adapt the questions according to each interviewee.

50
IV. Data analysis
A. Introduction
This section will show the results of the interviews. In total, five interviews have
been conducted with persons specialized in Industry 4.0 in general or responsible
of digital projects for their company.
Interviews lasted about 45 minutes each and have been conducted by phone only
for availability and geographical reasons.
B. Industry 4.0 definition
The definition of Industry 4.0 is slightly similar for each of the interviewees. This is
an Industrial Revolution supported by several new technologies. Different key
points were often addressed and interesting for the study:
• A change of mentality, people are striving for more collaboration. Therefore,
companies are also seeking for more collaboration. This implies vertical and
horizontal integration of the Supply Chain (has seen previously in this
dissertation). New ways of management and consumption imply more
flexibility for companies.
• It involves connecting every device in order to promote data sharing and
data analysis
• These technologies are not all new, but their maturity is new and so it is
ready to be implemented. They are considered as disruptive and offering
performance improvements.
• Technologies will help people to be focused on the tasks adding real value
to the business. Low-added value tasks will be performed by automated
systems.
• People often forget the management of humans which is the key to manage
a good industrial revolution in companies

51
As one interviewee stated:” the percentage of effort putting into this revolution
need to be divided; 50% into technologies and the other 50% in the management
of employees”.
C. Industry 4.0 technologies applicable for logistic and
transportation functions in the Food and Beverage Industry
There are several technologies which have been cited or not by interviewees.
Boundaries are tight between these technologies and there is not a real and
established list for Industry 4.0. These technologies have been split into two
categories by a consultant in Industry 4.0:
• Hard technologies which encompass 3D printing, robotics, automation and
augmented/virtual reality
• Soft technologies including Artificial Intelligence, smart device, Internet of
Things and smart factories
It has also been mentioned that some technologies as robots or 3D printers exist
for a few years. The problem encountered by companies is the maturity of the
market. The Gartner Cycle has been mentioned and companies are analyzing
such data in order to know what the best time is to implement new technologies. A
mature technology has more chance to be accepted by people and might be more
“polished”.
The following table contains all the technologies cited by interviewees and shows
how many times they have been cited:

52
Table 2. Interviewee’s responses

Dissertation - The competitive advantage of Industry 4.0 for Food and Beverage companies in their logistical and transportation functions of the Supply Chain

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