As of a 2017 survey, just 6% of companies felt they had reached supply chain visibility. Elsewhere, nearly a fifth of companies listed visibility as their number one operational challenge (it ranks the third highest priority overall), but more than 60% admitted that they didn’t use any technology for monitoring their supply chains. By the same token, more than 90% of businesses have listed digital transformation as a huge driving force in the evolution of the modern supply chain, but fewer than half of those businesses have an actual plan in place for managing that evolution.
Whether you're creating a more synergistic relationship with a supplier of raw materials as an auto manufacturer or developing special relationships with retailers to improve the performance of your packaged consumer goods, collaborative supply chain partnerships often feel like the holy grails of the modern value stream. This is with good reason: a strong partnership in which information, risk, and benefits are shared equitably can add real value on both sides of the relationship in the form of reduced costs, smarter forecasting, or any number of other benefits. It's easy to see why people are willing to devote time and mental energy to it.
Remember that one part of The Wizard of Oz? The one where the wiz comes out from behind the curtains? How was that one little guy able to control everything from his perch back there, without anyone being any the wiser? That I can’t tell you, but I can tell you we’re getting closer to a 21st-century version with the continuing maturation of the Internet of Things (IoT). The emerging technology that powers the 4th industrial revolution, Industry 4.0, is giving us a glimpse of what it would have been like sitting back there, with a view into all the goings-on of our realm.
Let’s say you’re a homebrewer, and you’ve just finished drafting your recipe for a dry-hopped pale ale that you plan to brew in the coming weeks. If you’re like most people, you go to a homebrew supply site and order your hops, malt, and yeast all at once, plus some clean bottles for your brew to wind up in. This strategy works perfectly well, but as you go, you find that it leaves something to be desired. While your beer is fermenting, you have a bunch of bottles taking up unnecessary space on your floor; and by the time you’re ready to dry-hop (which involves adding more hops during the fermentation period), the ones you bought from the homebrew site are a little stale.
Industry 4.0 is making waves in the manufacturing and supply chain sectors. But what about logistics? How are these same technological advances helping move those products faster and more efficiently? The goal remains unchanged: to use connected workflows and technologies to give people the tools and freedom they need to adapt and pivot with the changing environment and to seek creative solutions to increasingly complex problems. Logistics 4.0 is here, and one of the primary drivers of this revolution is the Internet of Things (IoT). IoT refers to devices of all sorts, be they tablet computers, sensors monitoring machinery or vehicles, or even wearables that track biometrics to ensure the health and well-being of the workforce, that are all connected to the network.
Imagine for a second that your factory is essentially a black box. Materials go in, and finished products come out, but what happens in between is fundamentally mysterious. What challenges would this present from an advanced planning and scheduling perspective? Sure, in this environment you can get a small sense of the correlation between raw material volumes and finished product volumes—you might even be able to gain a sense of which raw materials loosely correspond to which products. But surely there’s a lot of information you’d really like to have: how do different products differ in resource usage? What are the most common causes of delays and disruptions? How can you more effectively align your capacity with emerging demand levels?
One of the explicit goals of Industry 4.0 in the long run is to empower autonomous machine decision making within production processes. This is a lofty goal—requiring highly visible and highly legible data streams combined with AI or machine learning integration—but it does have the potential to add considerable value to supply chain management processes. How does it do so? By freeing up human decision making capacity for larger-scale choices, and by automating the process by which data is turned into action—i.e. creating an implicit set of procedures for different situations that might emerge on the factory floor. In this way, manufacturers can build new efficiencies into their existing processes and drive towards an increasingly optimized supply chain.
In a recent poll, PwC found that while 60% of respondents were “dabbling” with Industry 4.0 technology, only 3% had truly achieved a working Industry 4.0 paradigm. To some of you, this might come as a big surprise. After all, Industry 4.0 has been the subject of countless news stories, opinion pieces, blog posts, and whitepapers in the last several years—almost all of them pointing out its unprecedented potential for changing the face of manufacturing. Some readers, on the other hand, probably aren’t surprised by this statistic in the slightest. Why? Because they know how difficult it can be to find and implement the kinds of technology solutions that make Industry 4.0 possible. Businesses often have to wade through jargon to understand what’s on offer, and a solution, once selected, might require large-scale operational changes that can be difficult to implement. To help mitigate some of these challenges, here are a few questions to ask yourself as you evaluate Industry 4.0 technology solutions for your manufacturing outfit.
Imagine for a moment that you’re planning to do some small renovations to expand your house. They’re straightforward enough that you can do all of the work yourself, but since you have a day job, you can only do the work at night. What’s the first thing you buy? If you answered floodlights, flashlights, or any other light-emitting piece of equipment, then you have the right mentality for success in the modern supply chain. After all, doing work on a house that you can’t see can be dangerous and inefficient. In the same way, trying to grow your business in spite of low visibility can prove not just difficult, but risky. To prove it, here are five way that end-to-end (E2E) supply chain visibility plays an important role in building a smarter, more efficient business.
Discussions around the effects of climate change have been among the dominant topics of conversation in the first two decades of the 21st century. As global leaders in government and business consider what steps must be taken in order to ensure the health of our natural resources and ecosystems, businesses can almost certainly expect changes to the way that supply chains operate. Many within the worlds of manufacturing and shipping are beginning to track their carbon footprints and overall environmental impacts, but still others are unsure of the potential considerations involved. If you’re in the latter camp, we hope that these four facts will help give you a grounding in conversations around green footprint optimization.