Industry 4.0 & Supply Chain Transformation
Disruptive innovations, powered by Industry 4.0 are currently changing the landscape of many industries and their business models. Because of the increasing digitalized processes and an exponential growth of sensible data, supply chains are also impacted by the fourth industrial revolution. The fourth industry revolution is marked with realtime exchanged data, automation, robotics, cloud, artificial intelligence (AI), connected devices and equipment(Internet of Things) and augmented reality to connect innovation, new technologies and humans.
Similarly, in the field on logistic, the fourth industrial revolution coined as Logistics 4.0 has recently emerged as a move to smart transportation and logistics enhanced sales and operations planning (S& OP)and dynamic logistics network configuration.
Technology Revolution in the Supply Chain Industry:
Behind the great potential of the digital supply chain(DSC)lies Industry 4.0 the fourth industrial revolution. A transformation in production and automation was brought on first by steam and water power(Industry 1.0)then by electrification(2.0) and more recently bythe digital computer(3.0). Industry 4.0 digitization is about companies orienting themselves to the customer through e-commerce digital marketing social media, and the customer experience. Ultimately virtually every aspect of business will be transformed through the vertical integration of research and development manufacturing marketing and sales and other internal operations and new business models based on these advances. In effect we are evolving towards a complete digital ecosystem.
Impact of Industry 4.0 on the Supply Chain:
With the evolution of industry 4.0, digitalization & automation has become the most important factor in the industry. There has been automation & digitalization in all aspects of business right from the working culture to manufacturing processes to overall business strategy. This has quite an impact on the supply chain. This impact of Industry 4.0 on the supply chain has been termed as“Logistics 4.0” which is characterized by smart warehousing smart transportation, supply chain visibility etc. With digitalization and availability of Big Data, there has been more value and optimization in the supply chain, but also at the same time the supply chain has turned out to be complex than earlier.
Companies that get there first will gain a difficult-to-challenge advantage in the race to Industry 4.0
The traditional supply chain was simpler but had less visibility between the levels involved thus hindering meaningful collaboration of the supply chain. Communication was delayed as it was passed through each level in a hierarchy & hence resulted in lower level of responsiveness. But with digitalization, the traditional supply chain has grown to be an integrated supply chain ecosystem, with complete visibility& simultaneous communication across the whole supply chain. This integrated supply chain ecosystem is also characterized by high flexibility & responsiveness right from planning till execution level.
Supply Chain as the Epicentre of Digital Enterprise:
Companies are moving towards a digital workplace, where there is application of E-finance & E-HR, & complete reliance on digital knowledge sharing. Vertical integration big data process optimization, augmented reality etc. has set in forth in the engineering & manufacturing practices. Industry 4.0 has also marked its place in the business models of the companies via digitally enhanced products & services & automated solutions.
Companies are orienting themselves to the customer through e-commerce, digital marketing, social media, in a motive to maximize customer experience. Hence, virtually every aspect of business is being transformed through the vertical integration of research and development, manufacturing, marketing and sales, other internal operations, and new business models based on these advances. As supply chain management serves as the connecting nerves of all the business aspects, hence with digitalization of whole business processes, the digitalization of supply chain is a must.
Supply chains are extremely complex, and no company has yet succeeded in building a supply chain that’s truly digital. Indeed, many of the applications & trends required for moving towards a digital ecosystem are not yet widely used. But this will change radically over the next few years, with different industries implementing digital supply chain at varying speeds. Companies that get there first will gain a difficult-to-challenge advantage in the race to Industry 4.0, and will be able to set or influence technical standards for that particular industry. The advantage of adopting these technological trends will be by no means limited to the increased efficiencies of operations, but also set a competitive advantage amongst the counter parts. At the initial phase undoubtedly many challenges in adapting to the technology trends will come up but ultimately we will be moving towards a fully digital ecosystem.