Towards a Logistics Cloud

Towards a Logistics Cloud Bernhard Holtkamp, Sebastian Steinbuss, Heiko Gsell, Thorsten Loeffeler, Ulrich Springer Fraunhofer Institute for Software and Systems Engineering ISST Emil-Figge-Strasse 91, 44227 Dortmund, Germany {bernhard.holtkamp}@isst.fraunhofer.de Abstract— This paper describes an approach for the development of a logistics cloud as a “vertical cloud”. In contrast to a generic or “horizontal cloud” components of the cloud platform are customtailored to the specific needs of the logistics application area. The NIST cloud services model serves as a basis for structuring logistics specific cloud service requirements. In the next step the domain specific model is used as a basis for the development of Logistics Mall, a domain specific cloud platform for the trading and usage of logistics IT services and logistics processes. The paper closes with an overview of the implementation status and an outlook to future work. I. INTRODUCTION The global market volume of logistics is 4,200 Billion €. In Germany logistics is the third largest economy branch with an annual market volume of 200+ Billion €, 115,000 logistics companies and a work force of 2.7 Million. The German logistics market, as typical for the logistics domain, is characterized through small and medium size enterprises with little or no IT capacities and competences besides operating their own IT resources. Cloud computing is considered as a megatrend which will have an impact on the usage of information technology in all application domains. According to IDC market research cloud the cloud computing market will grow from 16 Billion $US in 2008 to 42 Billion $US in 2012 [1]. For a common understanding we adopt the working definition of NIST [2] that defines cloud computing as “a model for enabling convenient, on-demand network access to a shared pool of configurable computing resources (e.g., networks, servers, storage, applications, and services) that can be rapidly provisioned and released with minimal management effort or service provider interaction. This cloud model promotes availability and is composed of five essential characteristics, three service models, and four deployment models.” The basic characteristics are on-demand self-service for consumers, broad network access, resource pooling to serve multiple consumers using a multi-tennant model, rapid elasticity of ressources and metering capabilities for service provision. The identified service models are software-as-a- service (SaaS) where consumers use a provider’s application running on a cloud infrastructure, platform-as-a-service (PaaS) where a consumer can deploy an application on a cloud infrastructure using a provider’s tools and platform, and infrastructure-as-a-service (IaaS) where a consumer can run arbitrary software on a provided cloud infrastructure. Recently, big IT companies have invested many million dollars in the development of cloud technology and in the provisioning of commercial cloud offers. The span reaches from IaaS solutions like Amazon’s Elastic Compute Cloud [3] to PaaS offers like Microsoft Windows Azure [4] and SaaS offers like Salesforce CRM [5]. A common characteristic of these offers is their generic nature. They all concentrate on broad usage scenarios but do not provide business relevant features. These cloud offers are called “horizontal clouds”. In their report on the future of cloud computing [6] a European expert group identifies the provisioning of application area specific cloud services, also called “vertical clouds”, as a significant business opportunity. The German excellence cluster EfficiencyCluster LogisticsRuhr (www.effizienzcluster.de) shares this view and has declared the development of a domain specific logistics cloud a strategic target. As a consequence a project has been launched to develop Logistics Mall as a vertical cloud for logistics IT services and logistics processes (www.logistics-mall.de). The motivation and concepts are outlined in the following. The rest of the paper is organized as follows. In chapter 2 the requirements of logistics on application domain specific cloud services are discussed. Chapter 3 provides an overview of the Logistics Mall development. The paper closes with a summary of results and an outlook to future work. II. REQUIREMENTS OF THE LOGISTICS APPLICATION AREA ON DOMAIN SPECIFIC CLOUD SERVICES Trade and industry consider logistics as a cost factor and as a factor of competitiveness at the same time. As a consequence there is a growing trend for outsourcing and contract logistics to benefit from scale effects and from synergies. This way the market for logistics services has developed from classical transport – transshipment – warehousing services towards a growing market of more individual and more complex services. Todays logistics customers require individualized logistics services with a flexible and broad service spectrum, individual logistics processes and value-added services, transparency of costs and performance, short-term contracts. Logistics service providers can satisfy these requirements only with customtailored IT support for their logistics processes. Currently the time for implementing new logistics systems is long compared with their usage time. In trade and industry business models and strategies have a life cycle of two to three years. The development of new logistics processes often takes six to ten months. If new IT systems are needed to support these processes implementation time 2010 Sixth International Conference on Semantics, Knowledge and Grids 978-0-7695-4189-1/10 $26.00 © 2010 IEEE DOI 10.1109/SKG.2010.46 305 increases to one or even up to two years. This is too long and too expensive for strategic investments. The use of logistics specific cloud services is therefore considered as a viable solution. The virtualization of IT resources relieves especially small and mid-size logistics companies from investments in the development of individual software solutions including expensive software licenses and from operating costs. Instead, logistics companies can focus on their core business. To a large extent the requirements of logistics companies on cloud services are the same as those known from other application areas, e.g. security concerns. However, some requirements differ. In particular, logistics companies need IT support at least for the definition of standardized logistics business objects to ease the definition of interfaces between and thus the interoperability of systems, virtualized tools for the development of new logistics specific IT services, virtualized composition of these IT services into individualized, complex applications, integration of local logistics systems (e.g. material flow systems in a warehouse) with virtualized IT systems (e.g. a cloud based warehouse management system), the design of new logistics processes, using a domain specific modeling language, virtualized execution of logistics processes that consist of physical logistics activities (e.g. transport) and related IT services. In the next chapter we discuss how these requirements can be satisfied by adjusting the NIST cloud service model to the needs of the logistics application area. III. LOGISTICS SPECIFIC CLOUD SERVICE MODELS The NIST definition of cloud computing defines a three- layer model for cloud services. From bottom to top the layers IaaS, PaaS and SaaS are distinguished. In the following we match the requirements identified in the preceding chapter with capabilities of the service model layers that are needed to satisfy the requirements. A. An IaaS Model for Logistics The IaaS layer refers to the provisioning of processing, storage and network services. Users are enabled to run and control their applications in virtualized environments without having control over the underlying cloud infrastructure. In particular, control of networking components is limited. Logistics applications often have interfaces to physical devices or to complex infrastructures. Examples are warehouse management systems that control complex material flow systems or point-of-delivery applications that use mobile devices for electronic signatures of customers as proofs of delivered goods. Even the relatively simple open source warehouse management system myWMS (www.mywms.org) needs connections to peripheral equipment like barcode scanners, printers or RFID tags [7]. If such logistics applications are transferred into a cloud control over network services has to be established that implement the connection between the logistics application in the cloud and the physical logistics systems on a user’s premises. B. A PaaS Model for Logistics The PaaS layer provides a user with the capability to deploy applications that are created by using programming languages and/or development tools supported by the provider. A logistics cloud that aims at fulfilling the requirements listed in the preceding section needs to provide various logistics specific platform components. One component is a service engineering environment for the development of logistics services. A part of this environment is a logistics ontology that defines logistics objects that are processed by and communicated between logistics services. The ontology eases the integration of services as services of different providers can map their object models to the ontology. In practice a part of this mapping work is done by EDI converters that generally map commercial business objects from a sender’s model to that of the recipient, e.g. order items in an order management system are mapped onto commissioning items in a warehouse management system. If users need access to more than one application the SaaS layer should provide a framework that supports the use of multiple applications. A material requirements planner (MRP) in a forwarding agency, for instance, might need access to an order management system, to a yard management system and to a tour planning system. Interoperability of the systems to enable activities across system boundaries might be based on the use of common business object as provided by the PaaS layer. C. A SaaS Model for Logistics The SaaS layer provides for access to applications that run on a cloud infrastructure that is managed by the provider. Generally, applications are accessible through a Web browser. User control is basically limited to application individual configuration settings. This holds, for instance, for the aforementioned myWMS system regarding the configuration of the topology of their warehouse, i.e. the static WMS parameters (e.g. number of racks) have to be set. Another issue is the sharing of a single terminal by e.g. multiple warehouses workers. Nevertheless, activities are often bound to a person. As a consequence, quick login/logout solutions or other user identification mechanisms are needed that enable the change of application users without terminating the application at the terminal. From a logistics business perspective a SaaS layer should also provide domain specific billing models. CPU time and storage size are measures that can hardly be related to logistics activities. Hence, a billing model that refers to e.g. commissioned items is much more comprehensible for logistics people. 306 IV. THE LOGISTICS MALL APPROACH The Logistics Mall approach aims at offering logistics IT services and logistics processes as tradeable goods in a cloud. It is developed within the Fraunhofer innovation cluster “Logistics Mall – Cloud Computing for Logistics” that was launched in early 2010. A. The Vision The Logistics Mall is seen as a Web based service platform that provides for the procurement and use of logistics IT services as well as for the design and execution of complex logistics processes. Fig. 1 illustrates the key roles and their interactions with the Logistics Mall. IT service developers use cloud based tools for the development of Logistics Mall compliant services that are offered in the mall or within shops in the mall. Logistics companies offer their physical logistics services in a corresponding way. Logistics process designers use a process design environment provided by the mall to define complex logistics processes that combine logistics IT services and physical logistics services and that are executable by a process engine as a part of the mall. A customer of the mall can buy and instantiate such processes and let them run on the mall’s process engine. Fig. 1 Logistics Mall: logistics services and processes in the cloud B. The Concept Conceptually the Logistics Mall consists of two components: mall marketplace (MMP) and customized access framework (CAF. In the following we have a closer look on these key components. 1) The MMP Component of the Logistics Mall: The mall marketplace MMP is a specialized Web shop for logistics IT services and logistics process support.It is designed for public use. MMP has three categories of users: buyers, providers and operators. Buyers buy the use of logistics IT services in the cloud. They are managers in logistics companies who replace existing services by cheaper solutions from the cloud, procure better IT support for their established logistics processes (e.g. extension of the IT portfolio) or get IT support for new processes. Their benefits are immediate availability of services, no investments into software development and software licences, no personnel for systems operating, flexibility and cost control. To support procurement via the Internet MMP provides them with information on products and their providers as well as with information on the usage of logistics services in the cloud. The logistics IT applications and services are offered by providers. The German IT sector is dominated by SMEs. More than 50,000 it companies with about 600,000 employees generate annual revenues of roughly 70 Billion €. That implies an average company size of 12 people and a sales volume of 1.4 Million €. The benefits for these companies lie in bundled marketing power of the Logistics Mall, a better market penetration, less maintenance of individualized product instances and no operating efforts. To reach these benefits the offered product as well as the provider must satisfy some requirements imposed by technical constraints of the Logistics Mall or by the operator of the mall, respectively. MMP, the offered services and the underlying cloud infrastructure are manged by the operator. The operator benefits from scaling effects regarding the usage of the cloud infrastructure and from service fees for sales and operating. 2) The CAF Component of the Logistics Mall: The Customized Access Framework CAF is the key component of the Logistics Mall. It implements a logistics specific SaaS layer as discussed in section III.C: CAF provides a customer company of the Logistics Mall with a user specific framework for access to multiple logistics applications and to related services. CAF has two categories of registered users, i.e. users from the customer side and users from the operator side. Users of the customer side can act in different roles. We distinguish between managers, business users and administrators. The latter are in charge of administrative processes on the customer side like user management, security policy enforcement, conduction of application specific configurations, control of resource consumptions of the underlying cloud infrastructure and the like. CAF provides them with the necessary means to perform these activities. Managers are responsible for managing the business processes on the customer side. They have access to logistics applications and services through CAF according to their needs. They also communicate with the operator via reports that are provided by the operator. These reports contain information about activities performed by users on the customer side and about services performed by the provider. A specific report contains billing information. Business users get role specific access to logistics applications and services. As mentioned before, an MPR, for instance, gets access to order management, warehouse management, yard management and tour planning services. A warehouse worker, in contrast, gets only access to warehouse management system services. Administrators on the operator side get access to monitoring services for CAF resource comsuption and to resource management services. 307 An operator’s managers get access to reporting services that provide information about a customer’s activities and resource consumptions. On its PaaS layer CAF provides a logistics specific service registry and business ontology for logistics objects. The service registry uses an extended version of USDL [8] for the description of service semantics to cope with the problem of automatic deployment of rented applications in CAF. The description model is the same for MMP and CAF. The business ontology is limited to a subdomain of logistics as acomplete ontology would exceed the available resources by far. Our focus is on warehouse logistics as a part of intralogistics. The CAF IaaS layer provides for the management of the connections between an application in CAF and customer local logistics infrastructure. Another component supports the management of different application types regarding their instantiation and sharing between different CAF instances. C. Logistics Mall Implementation Although the innovation cluster was launched only recently, a first demonstrator of a Logistics Mall CAF has been presented on the IT fair CeBIT 2010 in Hannover and at the 8th International Trade Fair for Distribution, Materials Handling and Information Flow LogiMAT2010. Logistics Mall 1.0 covers an end-to-end logistics process, starting from an incoming order in an ERP system and ending with the storing of a waybill in a document management system. Inbetween a warehouse management system is involved for the commissioning of the order. Information exchange between the systems takes place by using an EDI converter. All applications are from different providers and run on different platforms. Access to the applications is provided through a portal platform, in which the applications are statically integrated. The prototype version of Logistics Mall that is currently under development consists of an MMP component and CAF components. Both components are implemented on a Java stack, using Liferay [9] as a portal platform. As Liferay supports hot deployment, offers can be dynamically integrated in MMP and from there, as a result of a buying process, automatically integrated in a customer CAF. For this development phase we limit ourselves to the integration of Web based applications. As many existing logistics applications do not have a Web interface this is a significant restriction. Other problems occur with application individual user management and access control. For applications that do not support LDAP single sign-on might be difficult to achieve. Another issue is lack of multi-tenancy capabilities. In that case each customer needs their own instance of the application. Depending on the platform requirements, on the usage patterns and on a customer’s application portfolio the instanc