Preparing for the Inevitable Supply Chain 4.0 Implications
Martin Pahulje - June 03, 2021
The rise of Industry 4.0 technology has dramatically changed the way that supply chains operate. With smart technology such as AI, IoT, and machine learning, supply chains have grown much more complex and automated. These developments have increased the speed and efficiency of supply chains, providing management with more accurate forecasts, deeper insights, and more.
While these are significant benefits, the result is that supply chains are being forced to reinvent how business is managed and conducted. Supply chain networks must adopt these solutions to stay competitive, equipping themselves with the technology necessary to optimize and succeed. As we continue to dive deeper into the age of Industry 4.0, these technologies will only continue to advance and develop, become more intelligent and more complex. Embracing Industry 4.0 is a critical key to success today, so it's important to address the implications it brings. We will discuss the most prominent implications of Supply Chain 4.0 so that you may prepare your organization to utilize every tool at your disposal.
One of the most significant implications of the growth of Industry 4.0 is automation. In the past, automation in a supply chain referred to the factory floor and the physical equipment and conveyor belts located inside. While these are still used and automated, often used in the adoption of robots and self-guided vehicles, automation in Industry 4.0 has grown significantly in recent years. Now when we refer to automation, it includes system processes and workflow. Automation is a large umbrella over the plethora of technology we have available. Still, there are a few in particular that you should be aware of, each of which will significantly optimize supply chain operations in the present and future.
Automation is directly linked to the advanced capabilities of data and the adoption of AI. With artificial intelligence, a dynamic data set can feed an algorithm information in real-time, connecting the data with people, applications, and machines. A significant portion of these capabilities is enabled by interoperability features, permitting data to be shared between similar networks and software. This means that automation is no longer substituting manual labor, but it's also advancing preexisting software and technology. All layers of the supply chain network, from planning, execution, and analytics to distribution, can move and respond as one organism. Beyond AI, Industry 4.0 is also welcoming innovations such as computer vision (CV) and robotic process automation (RPA). CV, often referred to as augmented reality systems, has proven use cases in plant safety, maintenance, and quality control. Creating simulations of processes is incredible for troubleshooting and thus preventing breakdowns and disruptions in a supply chain. RPA optimizes the workflow side of operations, reducing human error in data entry and memory type tasks. This automates the software already integrated into your system, taking care of the tedious manual tasks that often result in an error.
Tied in with automation is analytics, which has become significantly enhanced with the development of AI. Organizations now have more information available than ever before. While this is highly beneficial, that information has no real use if it cannot be translated into actionable decisions. The purpose of analytics is to aid managers in making more educated decisions. All of the market research and forecasting results in the world are useless if they cannot be used to make better business decisions. For this reason, it is extremely crucial for companies to utilize analytics with purpose. Analytics with AI can help companies connect information and action, answering "what does it mean?" when data is received. Furthermore, AI has extended data's relevance beyond metrics and KPI's into the realm of automated decision-making with customer satisfaction in mind. Systems can be programmed to make certain actions or decisions once specific criteria are met. Not only does this optimize the data you receive, but it instantly translates it into actions, saving supply chain managers significant time going through data and making decisions.
Advanced analytics can be used in several ways, not just in decision-making. Forecasting and machine learning can also significantly enhance your supply chain operations, especially concerning distribution and shipping. In the past, if an unpredicted storm or traffic occurred, your truck would be left idle, and you would have no idea when it would arrive. Now, with data inputs from weather and traffic conditions, you can receive a warning of these disruptions. With this information, you have time to reroute trucks and flag the delay to spread the message. Predictive analytics such as these can be used in every level of the supply chain, even optimizing day-to-day operations. Data is no longer a flat representation of fact but now a trigger for analysis and decision, and action, making.
To tie it all together, Industry 4.0 has also developed supply chain integration significantly. Integration represents digital connectivity and data flow, which passes between varied connectivity points in a supply chain. Essentially, it eases and quickens the transfer of information between various systems. It has been reported that fully integrated companies outpace their competitors by 20%. A significant reason for this is the increased speed of decision-making that results from integrated technology in the supply chain. By connecting communication touchpoints with technology, information can be shared faster, and thus decisions are made more quickly. With common IT infrastructure, data can also be transferred between systems through automation. All aspects of the supply chain network are connected to one source, allowing departments such as inventory and production to share data easier. This makes for more precise insights and more consistent data, which is key to making accurate decisions.
With cloud technology, integration is made even simpler. Data can now be transferred and shared between users from any location, creating an advanced data communication network. Cloud technology can also handle larger volumes of data simultaneously, drastically increasing the speed and efficiency of data processing. Furthermore, with advanced security, your information will be kept safe at a lower cost to you than traditional data storage. Recently, cloud technology has taken it one step further with edge cloud computing. This innovation enables the cloud to be distributed closer to users, allowing for even larger volumes of data at enhanced speed.
Industry 4.0 is significantly changing the supply chain industry. Providing enhanced automation, analytics, and integration, supply chains are faster and more efficient than ever before. The key to a successful supply chain is making the most accurate decision possible, and this is made possible with Industry 4.0 technology. Implementing these solutions will reinvent how you operate and manage your supply chain, transferring, processing, and interpreting data more efficiently than ever before. Industry 4.0 is no longer a pipe dream of the future, it is here, and it is time to embrace it.
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