# Big Data Analytics for Logistics and Distributions Using Blockchain

Benedito Cristiano A. Petroni, Elisângela Moraes, Rodrigo Franco Gonçalves

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Benedito Cristiano A. Petroni, Elisângela Moraes, Rodrigo Franco Gonçalves. Big Data Analytics for Logistics and Distributions Using Blockchain. IFIP International Conference on Advances in Production Management Systems (APMS), Aug 2018, Seoul, South Korea. pp.363-369, 10.1007/978-3-319-99707-0_45. hal-02177882

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Big data analytics for logistics and distributions using
Blockchain

Benedito Cristiano A. Petroni ¹[0000-0001-9826-1257], Elisângela Mônaco de Moraes²[0000-0002-0461-5235], Rodrigo Franco Gonçalves ³[0000-0003-2206-3136]

¹ Universidade Paulista, Jundiaí, Brasil

2,3 Universidade Paulista, São Paulo, Brasil
benedito.petroni@docente.unip.br
elisangela.moraes@docente.unip.br
rofranco212@gmail.com

**Abstract.** The volume of data generated is increasing. Companies capture large amounts of bytes of information about customers, vendors, products, sensory components, and especially their manufacturing operations. However, important problems, such as the Supply Chain Management processes, present difficulties regarding the security, integrity and validity of information generated in different databases. Blockchain technology presents itself as a disruptive process control technology where, through Smart Contracts, it provides transaction reliability and assures the parties involved that its purpose is strictly adhered to. Meanwhile, Big Data is offered as a solution to analyze all the information originated from the operations generated. In this article, as a contribution, possibilities of information generation will be presented, with the interaction of Blockchain, Cyber Physical Systems, Internet of Things technologies in function of the Supply Chain Management processes, so that they can later be analyzed through Big Data, giving users better controls and decision management in favor of improving their business.

**Keywords:** Blockchain, Big Data Analytics, Cyber Physical Systems.

# 1 Introduction

Industry 4.0 has led to several discussions concerning industrial processes, services and controls, and is considered a new potential to affect industries in their business, projects, manufacturing and deliveries [2]. Logistic management, a major part of an SCM system, has over the years ceased to be a simple activity of conferring and transporting products between companies, becoming a complex structure of collaborative analysis among all departments involved in its process. Despite logistical management, numerous devices and sources generate every second a large amount of unstructured data in the most diverse databases for its operations, and in addition, the amount of data created each year is much larger than the one created previously [1], thus requiring an attention
to an effective analysis of its contents, mainly regarding security, integrity and reliabil-
ity of the information. New technologies have promoted research that seeks to trans-
form SCM processes and bring about changes in the way we produce, market, buy,
consume and mainly how we control our goods and products, [4], allowing analyzes of
the necessary information that can corroborate in future decisions. There is currently a
growing interest in companies to gain insight into the origins of consumer products and
the demand for sustainable transportation, where products are imported and sold with
the limited information of a label addressing the origins of manufacturing or production
[ 5]. It was traumatic for many managers not to have real-time information on product
supply in the gondola or delivered to an end consumer through channels specifically
set up for such purpose as e-commerce. [23]. The SCM processes represent all the links
involved in the creation and distribution of goods, from raw materials to the finished
product that will be in the consumer's possession. Supply chains can presently span
hundreds of stages and dozens of geographic locations, making it very difficult to trace
events or investigate incidents [6], thereby ensuring the safety and integrity of the entire
process. Modern vehicles in intelligent transport systems can communicate with each
other, as well as roadside infrastructure units, in order to increase transport efficiency
and road safety. For example, there are techniques to alert drivers in advance about
traffic incidents and to help them avoid congestion, [7]. On the other hand, threats to
such systems may limit the benefits of such technologies, as they rely on technological
environment boundaries, poorly connected and mainly centralized information. In this
article, issues such as the decentralization of information regarding SCM, security and
integrity will be provoked by the proposal of integration of technologies such as block-
chain, Internet of Things - IoT, Cyber Physical Systems - CPS and Big Data in its favor.

## 2 The Literature

2.1 Industry 4.0.

The evolutionary process of the German initiative, the Industry 4.0 is bringing to or-
ganizations new perspectives and improvements in services and production methods.

After two or three years of discussions on Industry 4.0, many companies currently
have smart factory active designs projects [10]. The Industry 4.0 focused on the estab-
lishment of manufacturing components and intelligent objects as well as new produc-
tion processes [11]. Technologies that capture the exclusive needs of factory floor users
will decide the future of this new world, and yet with the possibility of deeply analyzing
all user information.

Internet of Things – IoT

In organizations, the Internet is allowing a huge leap in productivity because the emerg-
ing IoT is the first intelligent infrastructure revolution in history, which will connect
every device, company, residence, vehicle in an intelligent network in an Internet as a
network communications, energy, transport, and all of them are embedded in a single operating system [12].

Although recent developments have made IoT a reality, there are a number of challenges to be addressed in order to realize its full potential and to bring tangible benefits to society, the environment, the economy and individual citizens. [13] Divices will be able to make intelligent decisions, so that many workflows will be automated in new ways, resulting in significant time and cost savings [23]. However, true revolution can happen if all devices are controlled for example by a platform, in the blockchain case, where instead of direct user control it can be using Smart Contracts, with the conditions and rules of the business that must be dealt with before a transaction is included in the blockchain [23]. Therefore, IoT and Industry 4.0 are being increasingly interlinked in order to create more opportunities by providing new types of services and business models of value chain interaction [17].

## Cyber Physical Systems

The multiple and distinct behavioral modalities with the interaction of one with the other object in a multitude of ways that change according to the application context [21], are part of the context of the CPS. Its operation involves different fields, such as network of distributed sensors, intelligent network [16], medical monitoring, process control system among others, being the communication capacity between virtual objects and processes with real object and production processes one of the most important of this technology [15]. In CPS all computing and communication layers are incorporated in all types of objects and structures in the physical environment [18]. According to [19], the CPS consider in their implementation a combination of embedded hardware and software technologies, and in its interaction with the physical world it is considered the use of large monitoring structures composed of networks of sensors and actuators for the execution of the tasks.

## 2.2 Blockchain

Blockchain technology fits into a relatively new research area in different forms and possibilities for applications in a new generation of transactional applications. Its popularization is directly linked as being the basis of the model of the Bitcoin cryptosmoeda created by Satoshi Nakamoto, where in a file somewhere represents the transactions carried out and registered.

Each blockchain, such as that used by the Bitcoin cryptomoeda is distributed, running on volunteer computers around the world, so there is no central database, [3]. In essence, the blockchain is a public book that contains information about each transaction made within a system known as peer to peer, or point to point [5].

Blockchain is an incorruptible ledger that stores all data exchanges that occur on the network, built over time and maintained by the collaboration of all of us in a particular network - the user can be sure that the data is accurate [3].

This technology is being viewed as a revolutionary solution, addressing modern technology concerns such as decentralization, trust, identity, data ownership, and data-driven decisions. While actively looking for the best way to store, organize and process
Big Data, block-chain technology provides a significant contribution, [27]. A certain
process, being manufacturing or logistic, will have its registration in a block of records
and from this, all its contents will become immutable, that is, no more changes are
allowed, thus guaranteeing security and integrity in the process.

In this process, all network members can check all their transactions in the block
chain, if no consensus on the validity of the new block is reached, the block will be
rejected [6]. Similarly, if there is a consensus that the transactions in the block are valid,
the block is added to the chain, thereby forming a specific blockchain that can be ap-
plied to SCM and logistics processes.

The guarantee of this process is in the generation of a cryptographic file -hash (file that ensures the integrity of the information) that is generated for each block, which contains not only transaction logs, but also the hash of the previous block, creating a block interdependence linking to a chain thus forming the blockchain.

2.3 Big Data Analytics

Big Data is the term that describes a huge, structured, and generally unstructured set of
data that requires real-time analysis, independent of the storage medium. An important
aspect in this respect is the efficient management of business processes and risks [8].

Some concepts are common in terms of definitions found as: Reference to large vol-
umes of data (> 1 bytes Peta), different types of structured and unstructured data, faster
generation of data through different sources and new ways of storing, process, analyze,
visualize and integrate the data.

There are a variety of definitions found on Big Data and similarly it repeats with
respect to Big Data techniques and technologies. There are some Big Data aspects [22]:
Big Data Analysis techniques, Big Data techniques and visualization. Organizations in
many industrial sectors can take advantage of these important data to facilitate the dis-
covery of new ideas, with the effective use of large data, has the potential to transform
economies, providing a new wave of productivity growth involving SCM, as well as
the controls of distribution and delivery to the end user.

3 Blockchain applied in SCM and logistics processes

As a critical issue, one of the elements of the SCM, logistics is treated taking into ac-
count some security risks and with a direct tendency to centralize its operations, because
even with supporting technologies - IoT, CPS and cloud computing, these can tempo-
rarily be unavailable due to attacks, performance limitations and even improper opera-
tions, [9].

With this, blockchain technology presents itself as a great potential to improve pro-
cesses and security models in the SCM area, especially in logistics. However, according
to some recent studies on trends in SCM and logistics, the blockchain is known only by
some experts and still in a small number by those who search for implementation plans
[20]. This technology enables intelligent devices with relevant information from man-ufacturing processes to be programmed for actions in defined circumstances without risk of error and tampering, by implementing Smart Contracts. With this, it is possible to record all transactions that occurred with Smart Contracts in its ledger of all SCM processes. Still, according to the inherent characteristics of blockchain technology, such as the execution of Smart Contracts, it is not only possible to apply it to productive processes, but also to consider how these technologies are applied in practically the entire production chain, as can be observed in Fig. 1 below:

<figure><img src="image_2.png" /><figcaption>Fig. 1. Blockchain applied to SCM processes</figcaption></figure>

As explained in Fig. 1, all SCM processes such as manufacturing, storage and distribu-tion are executed according to certain rules derived from the Smart Contracts executed on the blockchain platform, on all the validation processes by the network members and the interaction with IoT and CPS components.

Thus, blockchain aggregates all computing resources in the resolution of previously intractable problems, for example, more refined real-time transport management and control [9], with the integrity and security of the information until the final consumer with its records. In this way, it is possible to efficiently guarantee the security, integrity and authenticity of the entire block chain.

Once all the information has been stored, they can be analyzed in detail through Big Data. In Fig. 2 below, all the information from the validated and secure SCM processes by the blockchain platform as well as all the processes that have been stored in several databases, using Big Data technology, analysis of information can be carried out in order to obtain knowledge stored in the aid in the decision-making process.

<figure><img src="image_3.png" /><figcaption>Fig. 2. Analysis of information by Big Data.</figcaption></figure>
Thus, through Big Data, all the information contained in the databases can be pro-
cessed and analyzed, but remains private or semi-private [22], and through mass col-
laboration and cryptographic mechanisms all information has become secure, in this
way, all the records of the blocks contained in the blockchain platform will be analyzed.

4 Conclusion

With the article information, it has been shown that, with the advent experienced by
IoT and elements of the CPS everything can be registered, informed and stored. Block-
chain technology through Smart Contracts and encrypted storage can authenticate all
stages of the production and logistics chain, that is, from the manufacturing process,
from the modes of transport to the final consumer, registering in the books with secu-
rity, transparency and integrity.

Big Data technology will be able through its analytical techniques provide value-
added to companies with knowledge for improvements in manufacturing processes and
future decision making. As blockchain technology is still considered embryonic, new
studies are sure to emerge to further explore possibilities and needs with further detailed
investigations of the applications.

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