SUPPLY CHAIN DESIGN FOR THE INDUSTRIAL INTERNET OF THINGS AND THE INDUSTRY 4.0

Digital technologies have changed the way supply chain operations are structured. In this article, we develop design principles to show determining factors for an Internet-of-Things approach within Supply Chain Management. From the design principles, the article derives a new model for the Industrial Internet of Things supply chains. The focus is on Small and Medium Enterprises (SMEs). This research design results in a new process of compounding knowledge from existing supply chain models and adapting the cumulative findings to the concept of supply chains in the Industrial Internet of Things. The paper outlines the design principles for developing cognition in the process of integrating SME’s digital supply chains in the Industrial Internet of Things (IIoT) and the Industry 4.0


Introduction
The motivation for this article comes from the increased sense that digital technologies are changing how supply chain operations are structured [1]- [4]. A supply chain is a system for moving products from supplier to customer [5]- [8]. Supply chain operational changes from digital technologies would specifically affect the small and medium sized companies (SMEs) because they lack the expertise, know-how, experiences and technological recourses of large enterprises. SME's in this article refers to enterprises with less than 250 employees, turnover of less than £25m and gross assets of less than £12.5m. We argue that a model for businesses and supply chain strategies is needed for the SME's to adapt to the technologically changing environment. Literature confirms that relying on government support is not sufficient. This is because the business environments with highest cyber ranking [9], should have the strongest business impact [10]. However, these business environments drop much lower in the industry application of digital infrastructure [9]. The issues could be caused by the barriers imposed to adoption of smart manufacturing technologies, e.g. cost of computing power, cost of implementation or analysis software [11]. Investment in technology infrastructure could improve the business performance [11], however, some SME's lack even the basic digital capabilities [12]. This points to the need to develop the design principles for the integration of the Internet-of-Things and Industry 4.0.

The methodology
Methodologically, the article draws on a number of different sources and research methods, including a taxonomic review as a discourse of literature [13], case study research [14] including open and categorical coding, with discourse analysis and grounded theory [4], [15]. The data and the findings are synthesised using the grounded theory approach of categorising the emerging concepts [16]. The case study research was performed on five I4.0 national initiatives and their technological trends in relation to IIoT product and services for a diverse set of industries. The initial set contained 12 different I4.0 national initiatives and their technological trends. These were selected through convenience sampling, which is a type of non-probability sampling that involved the sample set being drawn from the national initiatives and their technological trends that were convenient to access. Only five of the initial selection of I4.0 national initiatives and their technological trends are analysed in more detail.
These were chosen based on testing the content of the initial set, where it was discovered that the remaining seven initiatives do not discuss the I4.0 supply chains. This process corresponds with existing literature [17].

Taxonomic review
The literature review covers a vast area of internet-of-things, cyber physical systems, industry 4.0, cyber security, and supply chain topics, e.g. digitisation, automation and autonomy. The literature review applies a taxonomic approach and follows the process of synthesising the most prominent categories, emerging from the reviewed literature. This follows the grounded theory approach of categorising emerging concepts [16]. The emerging categories from the review are classified with open and categorical coding [18] in the theory development chapter.

How SME's can integrate modern technological concepts into their supply chain managementtechnical challenges
The technical challenges for SME's integrating modern technological concepts, such as the I4.0 mostly evolve around the design challenges and the potential economic impact (loss) from cyber-attacks [19]- [27]. The integration of such technologies in supply chains creates cyber security risk, for example from integrating less secured systems [28]. To reduce these costs and cyber risk, the SME's need to integrate IIoT processes and services [29], [30] in the industrial value chain [31]- [33], for value creation and value capture [34], through machine decision making [35], [36] connected to the Internet of Services [37], [38]. In addition, access control is required for granting or denying requests for information and processing services [35], [39], [40]. Large enterprises have the recourses to control the entire supply chain [5]- [8], [41], while SME's frequently have to integrate their supply chain operations [42]- [45]. Integrating multiple SME's in the supply chain requires higher visibility and coordination between participants [21], [25], [27]. Hence, these recommendations are aimed at enabling SME's to visualise the design principles.

Case study of five leading I4.0 initiatives and their technological trends
The gaps and key factors in current technological trends for I4.0 supply chain design integrating IIoT principles were derived from the taxonomic review [1], [3], [27], [41], [42], [44]- [47], [19]- [26]. These are analysed through a case study of I4.0 frameworks in the current section. We have chosen to use a case study research-based methodology because it is recommended in recent literature for addressing the gaps in knowledge and for advancing the methodological rigour; this is done specifically by studying platforms on different architectural levels and in different industry settings [48].  These initiatives and their technological trends are applicable to SME's and to large enterprises. To identify the most prominent categories that apply to SME's supply chains, the comparative analysis applied the grounded theory approach to study and analyse the emerging trends and to organise into related categories and sub-categories. Through comparative analysis, a number of shortcomings in individual initiatives are identified. The main shortcoming identified was that the national strategies propose very different approaches -as seen in Table 2.

Design principles for I4.0 supply chains
We Oxford e-Research Centre Engineering Sciences Department University of Oxford 6 the user [31]; (5) configuration feedback and supervisory control from cyber space to physical space, allowing machines to self-configure, self-organise and be self-adaptive [66].

Figure 1: Design principles for cognition in digital IIoT supply chains
The described principles represent the beginning of a cognitive architecture for I4.0 supply chains.
Such cognitive architecture allows for learning algorithms and technologies to be changed quickly and re-used on different platforms [31], [67], for creating multi-vendor production systems [65] which is necessary for the I4.0 supply chains. A cognitive production systems would provide real-time synchronised coexistence of the virtual and physical dimensions [38].

Discussion and main findings
The study applies taxonomic review and case study research to derive with the design principles for a theoretical model that enables the process of integrating SME's business and supply chains in the I4.0 network. The model captures the best practices in industry and defines the differences and similarities between I4.0 technological trends. Major projects on I4.0 are reviewed to present the landscape for cutting edge developments in IIoT, offering us a comprehensive picture of the current state of supply chain adoption.

Conclusion
The literature review discovered a lack of design clarification for the I4.0 supply chains. The literature review also discovered that adaptation of IIoT technologies, depends on the SME's cyber recourses.
This specifically concerns SME's as they do not have the same supply chain recourses as large enterprises. The new design principles enable SME's to visualise the required cyber resources and the integration process for IIoT technologies. The case study research combined with the grounded theory roadmap. The theoretical model can also be applied by SME's already operating in the I4.0 to visualise and assess their exposure to cyber risk and to design cyber recovery. The theoretical model in this study proposes a decomposed operational system with concrete and workable action plans, that would transition the economic and social systems towards new cyber capabilities. Visualisation and decomposition of the required cyber capabilities and cyber recovery planning is surprisingly not covered in existing models.

Limitation of the study
This study focused on the integration of SME's supply chains in I4.0. While the findings may also be suited to large enterprises, the aim of this research was to develop a model for SME's with limited technologies and expertise. The technologies analysed, bring diverse set of cyber risks, which until present are not quantified. In further studies, the supply chain accumulated cyber risk needs to be quantified and this should also be investigated for larger enterprises.