# Improving Supply Chain Management by Integrating RFID with IoT Shared Database: Proposing a System Architecture

Elena Puica

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Elena Puica. Improving Supply Chain Management by Integrating RFID with IoT Shared Database: Proposing a System Architecture. 19th IFIP International Conference on Artificial Intelligence Applications and Innovations (AIAI), Jun 2023, León, Spain. pp.159-170, 10.1007/978-3-031-34107-6_13 hal-05498077

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# Improving Supply Chain Management by Integrating RFID with IoT Shared Database: Proposing a System Architecture

Elena Puica(✉)

Economic Informatics Doctoral School, The Bucharest University of Economic Studies,
Bucharest, Romania

elenaa.puica@gmail.com

**Abstract.** This scientific research paper proposes a system architecture for integrating Internet of Things (IoT) shared database and Radio Frequency Identification (RFID) in supply chain management (SCM) with self-transactional materials. The architecture aims to improve inventory management, data transparency, resource utilization, and business insight by facilitating efficient information exchange between different layers of the supply chain. The use of self-transactional materials enables automated and seamless execution of transactions, eliminating human errors and delays in the supply chain processes. Furthermore, the IoT and RFID technologies enable real-time monitoring and tracking of inventory, improving accuracy and efficiency in SCM. The results suggest that the proposed architecture has the potential to significantly improve SCM performance. The feasibility and cost-effectiveness of implementing self-transactional materials in the supply chain should also be assessed to determine practicality. Overall, the proposed architecture represents an innovative and promising approach to improving SCM in the modern business landscape.

**Keywords:** RFID in Supply Chain Management · RFID-IoT in Supply Chain Management · Sel-Transactional Materials

## 1 Introduction

The increasing complexity and dynamic nature of Supply Chain Management (SCM) has created a need for more efficient and effective solutions. Radio frequency identification (RFID) and the Internet of Things (IoT) are expected to play a significant role in fulfilling customer requirements in the supply chain. The integration of RFID with IoT (RFID-IoT) aims to develop automated sensing, seamless, interoperable and highly secure systems by connecting IoT devices through the internet. The main benefits of RFID are optimizing resources, quality customer service, improved accuracy, and efficient business and healthcare procedures. RFID-IoT offers a new operating solution in the supply chain by focusing on manufacturing, retail shops, inventory, transportation, assembly, asset tracking, location, and even environmental detection. The evolution of
RFID-IoT will bring a significant impact to the revolution of SCM [1, 2, 3]. With the ubiquitous interconnectivity offered by RFID-IoT technologies, each stage in SCM can be interconnected to ensure correct processes and products are delivered at the right time, at the right quantity, to the right places. The advent of cloud computing (CC) and IoT adds the relevant information and events capture issue, transfer, storage, processing and sharing. Additionally, for better collaboration and interoperability enhancement in the supply chain, it is interesting to notify automatically each event related to logistic flows to involved actors. RFID technology is one of the key technologies to realize the IoT [4], consisting of tags, readers, and back-end computer systems. The two types of tags, active and passive, have different power sources and transmission distances. The adoption of RFID-IoT technologies improves operational processes and reduces costs, providing information transparency, product traceability, compatibility, scalability, and flexibility in SCM.

Supply chain management has long been plagued by difficulties in identifying, tracing, and tracking goods due to the variety of platforms and technologies used by different actors in the chain. However, the emergence of IoT and cloud computing offers a new approach, enabling better cooperation and interoperability between supply chain partners through the collection, transfer, storage, and sharing of logistics flow information. This issue encompasses the tracking and tracing of goods, data sharing and processing with access and authorization control, management of interactions between actors, and the need for a common policy and communication protocol. Existing platforms have failed to address key challenges such as collecting data directly from sensors on goods for real-time processing, managing interoperability between heterogeneous IT infrastructures, and making information available from mobile devices.

RFID technology offers a wireless communication system for sensing, detecting, identifying, tracking, and monitoring multiple objects, making it an appealing solution for numerous applicative scenarios in SCM [5]. Different types of RFID sensors are proposed, ranging from electronic sensors integrated into the tag to electromagnetic sensors that modify the tag response for sensing. RFID is now a standardized technology, offering decisive practical benefits such as unitary identification, wireless communication, and low cost of tags, driving new developments in concepts and applications [6].

The scientific study aims to propose a system architecture for integrating IoT shared database and RFID with Self-Transactional Materials in SCM. The study begins with an introduction that provides an overview of RFID in SCM, followed by a discussion of the potential benefits of integrating IoT shared database and RFID. The proposed system architecture is evaluated using a case study approach. The results section presents the findings of the study, which demonstrate that the proposed system architecture has the potential to significantly improve supply chain management performance. The architecture facilitates efficient information exchange between different layers of the supply chain and enables real-time monitoring and tracking of inventory. Furthermore, the use of self-transactional materials in the architecture enables the automated and seamless execution of transactions, which eliminates human errors and delays in the supply chain processes. The study concludes by recommending further research and testing to validate the effectiveness of the proposed architecture in real-world scenarios.
## 2 Radio Frequency Identification (RFID) in Supply Chain Management

Radio Frequency Identification (RFID) is a wireless communication technology that enables automatic identification tasks by using electronic devices with wireless communication capabilities. RFID systems typically consist of one or more readers and multiple RFID tags. During operation, the reader sends requests to the tags, which are affixed to objects. In response, the tags transmit a message containing their unique ID. RFID technology enables data capture that can be associated with various identification attributes such as serial number, position, color, date of purchase, and more. This Automatic Identification and Data Capture (Auto-ID) technology is capable of providing greater granularity in labeling compared to previous Auto-ID technologies, such as barcodes. RFID technology is based on the exchange of electromagnetic waves between RFID tags and readers, and it requires no manual intervention for identification tasks. The technology is highly versatile and can work in a variety of harsh environments. Additionally, RFID technology has relatively low costs and maintenance requirements, making it highly suitable for integration into Supply Chain Management (SCM) systems. By embedding RFID sensors directly into products, it is possible to generate smart objects that can interact with their environment throughout their entire lifecycle, from manufacturing and testing to use and disposal. RFID technology is similar to barcode technology in that it requires specialized tags and reader equipment to monitor objects, but RFID offers the added benefit of wireless identification. Common components of an RFID system include tags, transponders, tag readers, antennas, and interfaces. The versatility and flexibility of RFID technology make it suitable for a wide range of applications, including RFID printers, RFID scanners, RFID readers, and RFID antennas. The three basic components of RFID, are:

1. RFID tag, that is attached to an asset or item. The tag contains information about that asset or item and also may incorporate sensors, embeds specific information of the item on which it is attached.

2. RFID interrogator/reader, which communicates with (also called interrogating) the RFID tags. The reader empowers the tag and reads the information stored within it and a database that processes the information and performs the global RFID application.

3. The backend system, which links the RFID interrogators to a centralized database. The centralized database contains additional information, such as price, for each RFID tagged item.

In a typical RFID system, an object is equipped with a small, inexpensive tag that contains a digital memory chip with a unique electronic product code. The interrogator, consisting of an antenna packaged with a transceiver and decoder, emits a signal that activates the RFID tag and allows data to be read and written to it. When the RFID tag passes through the electromagnetic zone, it detects the reader's activation signal. The reader then decodes the data encoded in the tag's integrated circuit and passes the data to the host computer, where it is processed by application software.

RFID middleware is used to bridge RFID hardware systems to higher-level enterprise systems, enabling user access, control interface, interaction with enterprise databases and servers, and filtering, aggregation, and routing of captured tag data. The success of
RFID integration in a process is directly related to the associated middleware's features and performance, including user interfaces, security and authentication protocols, and upgradability.

RFID technologies can be classified into three categories:

1. **Passive RFID:** A passive RFID tag is powered by the electromagnetic energy, radiated from RFID reader antennas, based on backscattering. A passive tag can't transmit radio waves of its own, and its information storage capacity and computing capability are limited. It can be read only at short range (0.6 to 3 m). Based on the radio frequency used, the passive RFID technologies are usually categorized into low frequency (LF) RFID, high frequency (HF) RFID, ultra-high frequency (UHF) RFID, and microwave RFID.

2. **Active RFID:** An active tag is powered by an on-board long-life battery that provides sufficient energy to allow independent communication capability within greater range (approximately 90 m). To establish communication between RFID tags and readers, antennas are required. Active tags are fed by batteries, and are able to send data without solicitation from a reader. The active tag typically offers longer reading ranges with a limited lifespan than the passive tag with its built-in power source. The active tag works to track the object by providing real-time data continuously.

3. **Semi-passive RFID:** The semi-active tag uses a hybrid mechanism: self-powered, it is activated at the request of the tag reader, allowing lower power consumption than active tags. The reading distance of RFID chips range from a few centimeters to a few meters (10 m), and can go beyond (200 m) with long range communication technologies.

## 3 Internet of Things (IoT) Shared Database and Radio Frequency Identification (RFID) in Supply Chain Management

IoT represents a technological advancement in the field of computer and communication that enables the connection of physical objects via the Internet. This connection creates an interwoven web of information and events that can be utilized to facilitate object tracking, management, control, and coordination. One of the key challenges associated with IoT is the integration of diverse technologies and concerns [7]. A network structure that supports heterogeneity, scalability, energy optimization, cost minimization, self-organization, self-adaptation, self-reaction, privacy, security, and quality of service is essential for the realization of this paradigm [8]. RFID technology has been instrumental in inspiring the IoT paradigm, by enabling the integration of physical objects into an informative network. Through IoT, RFID and sensor network technologies can be used to monitor the location, status, movement, and process of objects, thereby enhancing remote access and facilitating decision-making [9]. The interaction and communication among objects and machines enable them to respond autonomously and solve complex problems intelligently. The IoT system comprises of five layers [10]: perception, network, middleware, application, and business layers. This five-layered architecture provides a framework for integrating RFID-IoT with business or management models.
The details of each layer are explained as follows:

- **Perception layer**: Collect and identify information from various IoT devices such as RFID tags that stick on the product and other IoT sensors such as temperature, optical sensors, proximity sensors, accelerometers, and gyroscopes to indicate the product environment.

- **Network layer**: Transmits information generated by IoT sensors into the server by utilizing a Wi-Fi network.

- **Middleware layer**: Ingest, process and store data generated from the network layer according to the data format types.

- **Application layer**: Analyze and visualize the collected data in SCM systems.

- **Business layer**: Understand the data and change the business or management model according to the trend.

RFID technology integrated with the IoT enables the automatic identification of objects, equipment, workers, and stock in SCM through the capture of real-time data. RFID-IoT can detect events, such as the start or finish of a process, using signal arrival and departure from the RFID-IoT covered area. IoT facilitates communication and interaction among different devices through the internet and equips objects with data collection and analysis automation, enabling real-world events to be reacted to, and predictions and decisions to be made without human intervention. This technology provides an opportunity to solve multifaceted problems requiring sophisticated analysis and rapid response in a ubiquitous computing environment, leading to improvements in inventory management, data transparency, resource utilization, and business insight. Combining RFID and other IoT technologies facilitates tracking the product from the manufacturer to the retailer, mitigating time and production costs, enhancing brand protection, quality assurance, and customized client preferences. The integration of different technologies, including RFID, allows for real-time data collection, while RFID tracks and identifies products. IoT optimizes SCM, making the supply chain management visible, effective, and agile through real-time management and complete integration, affecting the manufacturing, warehousing, transportation, and selling links of the supply chain.

As the network expands and becomes less expensive, more devices can be connected to transmit data. However, some devices may not have network connectivity or may not be configured to the network. In such cases, the new technology behind RFID acts as a mechanism for transmitting information, ensuring that up-to-date information is gathered and deployment times are streamlined. Transmitting small amounts of data is not particularly powerful on its own, but RFID offers low-cost and low-power capabilities, enabling devices to invoke data without substantially adding to the device's cost. Additionally, transmitting data can be performed even when the device is off, as RFID can be self-powered.
# 4 Proposing a System Architecture for Integrating Internet of Things (IoT) Shared Database and Radio Frequency Identification (RFID) in Supply Chain Management

Proposing a System Architecture for integrating Internet of Things (IoT) Shared Database and Radio Frequency Identification (RFID) in Supply Chain Management with five layered architecture that consists of the perception layer, network layer, middleware layer, application layer, and business layer. The purpose is to provide a friendly environment to improve inventory management, data transparency, resource utilization and business insight.

## 4.1 Problem Faced by Inventory Management

The problem faced by Inventory Management is the inability to handle heavy workloads and constant demand for product diversity. In addition, traditional inventory management systems rely on manual input, which can lead to errors, delays, and discrepancies in inventory records. As a result, it can be difficult to keep track of inventory levels and to know when to reorder or restock items. This can result in stockouts, overstocking, and decreased customer satisfaction. Furthermore, lack of visibility and transparency of inventory data within the supply chain can make it difficult to identify and address issues quickly, leading to inefficiencies and increased costs, all of which can impact the bottom line of a business.

## 4.2 The Proposed RFID System in Inventory Management, Integration with “Self-Transactional Materials”

RFID technology provides a solution to the challenges faced by traditional inventory management systems. RFID tags can be attached to inventory items, and RFID readers can collect data about the location, status, and movement of these items in real-time. This data can be transmitted wirelessly to a central database, where it can be processed, stored, and analyzed. The proposed system consists of the following components (see Fig. 1):

<figure><img src="image_3.png" /><figcaption>Fig. 1. RFID System in Inventory Management, integration with “Self-Transactional Materials”.</figcaption></figure>
**RFID Tags:** Each inventory item would be tagged with an RFID tag that contains a unique identifier and other relevant information, such as the product name, description, and quantity.

**Self-transactional Materials:** Self-transactional materials would be used to track inventory. These materials are composed of thin, flexible substrates that contain antennas and microchips, allowing them to communicate with RFID readers.

**RFID readers:** RFID readers would be placed throughout the inventory management system, including at entry and exit points, on conveyor belts, and in storage areas. The readers would capture the information stored in the self-transactional materials as the items move through the system.

**Middleware:** The RFID readers would be connected to middleware software, which would collect and process the data captured by the readers. The middleware would also filter and analyze the data, and provide alerts or notifications when necessary.

**Database:** The RFID system would be integrated with a database that would store the inventory data, including the unique identifier and other relevant information about the product. The database would also provide real-time inventory updates and allow users to search and retrieve inventory data.

**Cloud Computing:** The inventory database would be stored in the cloud, allowing authorized users to access the data from anywhere and at any time. This would enable remote inventory management and provide greater flexibility and scalability for the system.

**Mobile Devices:** Authorized users would be able to access the inventory data using mobile devices, such as smartphones and tablets. This would allow them to view inventory data in real-time and make informed decisions about inventory management.

**Analytics:** The RFID system could be integrated with analytics software, which would provide insights into inventory trends, patterns, and opportunities for improvement. This would enable users to optimize inventory management and reduce waste.

The RFID system for inventory management that uses self-transactional materials would provide real-time visibility into inventory levels, enable remote inventory management, and provide valuable insights into inventory trends and opportunities for improvement. Additionally, using self-transactional materials would provide a more flexible and durable tracking solution, enabling accurate inventory tracking even in challenging environments.

## 4.3 Data Storage and Real-Time Event Processing with the IoT Shared Database

The middleware layer of the system architecture includes the IoT cloud platform for storing and processing data in real-time. This platform allows for the efficient storage and processing of inventory data, which can be accessed from anywhere and at any time. The IoT cloud platform database is where all inventory data is stored. This database is accessible from anywhere and at any time, which allows for real-time monitoring of inventory data. The middleware layer of the system architecture includes the IoT cloud platform for storing and processing data in real-time. One solution for an IoT shared
database for RFID Self-Transactional materials in inventory management would be to use a cloud-based system. This would allow for a centralized database that all parties involved in the inventory management process can access and update in real-time. Each self-transactional material is equipped with an RFID tag that contains information about the material, such as its type and quantity. Each time the material is moved or used, the RFID tag is scanned and the transaction is recorded in the cloud-based database. The database is accessible to all parties involved in the inventory management process, such as suppliers, manufacturers, distributors, and retailers. Each party can access the database to view the current status of the materials, including their location, quantity, and usage history. The database can also include automated notifications or alerts when certain conditions are met, such as when inventory levels fall below a certain threshold. The database can also be used to track the movement of materials throughout the supply chain, allowing for greater visibility and traceability.

All parties involved have access to the same information, which can help reduce errors and miscommunications. In the proposed system architecture, the IoT cloud platform serves as the pillar of the system, providing a centralized location for data storage and processing. The platform should be scalable and able to handle large amounts of data generated by the self-transactional materials. Data/Event Handler is responsible for processing the data and events generated by the self-transactional materials. The shared database should be able to store all the relevant data generated by the Self-Transactional materials. The database should be scalable and able to handle large amounts of data. The system should be able to process events generated by the self-transactional materials in real-time. This would allow for quick response times and better inventory management. Notifications should also be sent to relevant stakeholders in the supply chain, such as suppliers, distributors, and retailers.

<figure><img src="image_4.png" /><figcaption>Fig. 2. Data storage and real-time event processing with the IoT Shared Database.</figcaption></figure>

In Fig. 2 is described the solution proposed, an IoT cloud platform is used that provides features like real-time data processing, analytics, and security. The IoT cloud platform is connected with the RFID readers, using protocols, these readers will collect
data from the self-transactional materials and send it to the cloud platform. Data pro-
cessing and data storage will be implemented once the data is received by the IoT Cloud
Platform. The business logic is implemented using serverless functions or microservices.
These services will analyze the data, trigger actions, and send alerts in real-time based
on business rules and events. After that, the data visualization is implemented using
tools that provide real-time insights and dashboards that help in making better inventory
management decisions. The most important component of the solution is to implement
security measures such as encryption, access control, and monitoring to ensure the
integrity and confidentiality of the data (see Fig. 2).

Overall, the proposed solution for data storage and real-time event processing with the IoT cloud platform in inventory management using self-transactional materials would provide a more efficient and transparent supply chain management system.

## 4.4 Communication and Data Transmission

The network layer of the system architecture is responsible for communication and data transmission. It ensures that data collected from the RFID readers and sensors is transmitted to the middleware layer for processing and storage. It also ensures that inventory data is accessible from anywhere and at any time. The cloud-based database stores all data related to the self-transactional materials, including their quantity, prices and usage history. The database can be accessed by all parties involved in the inventory management process, such as suppliers, manufacturers, distributors, and retailers. Each party can access the database to view the current status of the materials, as well as to update information as needed. Automated notifications or alerts can be set up to trigger when certain conditions are met, such as when inventory levels fall below a certain threshold. The system can also be integrated with other software platforms, such as inventory management systems or enterprise resource planning (ERP) systems, to provide real-time inventory data and optimize supply chain processes.

An IoT Shared Database can be especially useful for communication and data trans-
mission between the actors within the SCM when using Self-Transactional Materials.
Here are some ways in which an IoT shared database can be used for this purpose:

- Real-time tracking and sharing of Self-Transactional Materials data: track and record data about the movement and status of products within the supply chain in real-time.

- Automated data sharing: An IoT shared database can be used to automate the exchange of data between different systems used by the actors in the SCM (automatically update the with information about the quantity in real-time).

- Improved coordination: An IoT shared database can help to improve coordination between different actors in the SCM by providing a centralized location for storing and sharing data.

- Enhanced security and transparency: Self-Transactional Materials can provide an additional layer of security and transparency within the SCM. This can be especially important when dealing with sensitive or high-value products.

An IoT shared database can be a valuable tool for communication and data trans-
mission between the actors within the SCM when using Self-Transactional Materials.
By providing real-time tracking and sharing data, automated data sharing, improved coordination, and enhanced security and transparency.

## 4.5 The Proposed Architecture

The proposed system architecture for integrating IoT shared database and RFID in supply chain management consists of five layers:

### 1. Perception Layer:

To implement this layer, the appropriate RFID tags and readers for the inventory items based on the requirements of the supply chain are used at various points in the supply chain, including warehouses and transportation vehicles. With the RFID readers data about inventory items is collected, that will be transmitted to the middleware layer for processing and storage.

The perception layer includes self-transactional materials that are attached to the products or inventory items. These materials contain RFID tags and sensors that capture real-time data about the product. The RFID readers are installed at different points in the warehouse, such as at the entry point, exit point, and various checkpoints to monitor the movement of the inventory. These RFID readers capture the data from the RFID tags on the self-transactional materials and transmit it to the network layer.

### 2. Network Layer:

The network layer provides the communication infrastructure for the system, including wired and wireless networks, protocols, and standards. It is responsible for transmitting data between the various components of the system. The appropriate network infrastructure is used to support the transmission of data between the various components of the system. To ensure compatibility between the components of the system, the necessary protocols and standards are implanted.

The network layer consists of RFID readers that capture the data from the self-transactional materials and transmit it to the middleware layer. In this layer, the data transmitted by the RFID readers is collected, processed, and stored in the IoT Shared Database. The data is transferred securely over the internet. The IoT Shared Database stores and manages the inventory data in real-time and allows access to it from anywhere.

### 3. Middleware Layer:

The middleware layer is responsible for processing and filtering the data captured by the RFID readers. It performs tasks such as data filtering, aggregation, and normalization, and ensures that the data is consistent and accurate. It also includes the IoT Shared Database for storing and processing data in real-time. The appropriate middleware software based on the requirements of the supply chain is used to configure the middleware software to handle data collection, filtering, processing, and storage. To transmit data between the various components of the system, the middleware software is integrated with the network layer, the data is stored and processed in real-time in the IoT Shared Database.

This layer acts as a bridge between the network layer and the application layer. It consists of various software components such as API gateways, data processing engines,
and rules engines. The middleware layer filters, cleans, and normalizes the inventory data before sending it to the application layer.

## 4. Application Layer:

The application layer provides an interface for authorized users to access the data stored in the IoT shared database. This layer includes applications that allow users to view inventory levels, track shipments, and manage orders. The applications can be accessed from any device, such as smartphones, tablets, or computers. The appropriate application software is used to provide real-time visibility and insight into inventory data. A user interface for displaying inventory data in real-time is implemented, equipped with tools for analyzing and managing inventory data. Data visualization tools can be used to create visual representations of the inventory data, enabling users to quickly identify trends and patterns.

## 5. Business Layer:

The business layer includes the business processes and workflows that govern inventory management, including order processing, dispatching, and resource utilization. The business layer is responsible for the overall management and coordination of the supply chain. The data captured by the RFID system is used to inform decision-making in the business layer, enabling supply chain managers to optimize the supply chain and reduce costs. To implement this layer, the existing business processes and workflows has to be analyzed to identify areas where the proposed system architecture can improve inventory management, data transparency, resource utilization, and business insight. Based on the capabilities of the proposed system architecture, new business processes and workflows are designed.

In this solution, self-transactional materials, such as RFID-tagged items, are used to automate the inventory management process. These materials are equipped with RFID tags that contain information such as product code, batch number, quantity, expiration date. When the materials are moved, the RFID readers installed at various points in the warehouse capture the data and transmit it to the network layer for processing and storage.

Overall, by leveraging the power of IoT shared database and RFID technology with Self-Transactional materials, this solution can enable accurate, real-time inventory tracking, improving inventory management, data transparency, resource utilization, and business insight in Inventory Management.

# 5 Conclusion

The proposed system architecture for integrating IoT Shared Database and RFID in SCM with Self-Transactional materials offers a promising solution for improving inventory management, data transparency, resource utilization, and business insight. The architecture facilitates efficient information exchange between different layers of the supply chain, which enhances visibility and control over the supply chain processes. The use of self-transactional materials in this architecture enables the automated and seamless execution of transactions, which eliminates human errors and delays in the supply chain
processes. Furthermore, the IoT and RFID technologies used in this architecture enable real-time monitoring and tracking of inventory, which improves accuracy and efficiency in supply chain management.

The results indicate that the proposed architecture has the potential to significantly improve the performance of SCM. However, further research and testing are recommended to validate the effectiveness of the proposed architecture in real-world scenarios. Additionally, the feasibility and cost-effectiveness of implementing self-transactional materials in the supply chain should be assessed to determine the practicality of this solution. Overall, the proposed architecture represents an innovative and promising approach to improving SCM in the modern business landscape.

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