SUPPLY CHAIN 4.0: THE NEXT ERA OF SUPPLY CHAINS
The term “Supply Chain 4.0” refers to the reorganization of supply chains from design, planning, manufacturing, distribution, consumption, and reverse logistics through the use of “Industry 4.0” technologies. These technologies, which emerged in the 21st century, are largely used by firms that are on the cutting edge of supply chain management, such as the use of the Internet of Things (IoT), advanced robotics, and big data analytics. By using sensors in everything, creating networks everywhere, and automating and analyzing everything, performance, and customer satisfaction can significantly improve.
Information and communication technologies have evolved rapidly over the past few years, leading to their integration into supply chains and prompting the fourth industrial revolution. The integration of these technologies with changing customer demands increases competition within businesses, prompting a transformation of operational models and management strategies. As a result, many companies have adopted the principles and digital supply chain technologies of Industry 4.0 to improve performance and productivity.
A digital supply chain comprises eight key elements: integrated planning and execution, logistics visibility, Procurement 4.0, smart warehousing, spare part management, autonomous and B2C logistics, predictive supply chain analytics, and digital supply chain enablers. By putting these elements together into a coherent and transparent whole, customers can experience an improved level of service, flexibility, efficiency, and cost reduction. The integration of information and communication technologies into business processes in Industry 4.0 supply chain management is increasing.
In today’s digital supply chain networks, various technologies are used to create efficient, transparent, adaptive, and resilient systems at various stages of the supply chain. Industries can respond to rapidly changing conditions with greater flexibility and agility, reducing planning cycles and frozen periods by reacting to changes in demand, supply, and prices in real-time. This will improve a company’s overall operation with more efficient approaches to product distribution, reducing delivery times for customers by a few hours.
The digitization of the supply chain enables advanced forecasting approaches, such as predictive analytics of internal (e.g., demand) and external (e.g., market trends, construction indices) data, as well as machine status data for spare parts demand, which provides a much more precise forecast of customer demand. Through micro-segmentation, mass customization, and improved accuracy, control towers throughout the supply chain provide real-time and end-to-end visibility through automation of both physical tasks and planning.
The transformation into a digital supply chain requires a high degree of organizational freedom and flexibility, as well as state-of-the-art IT systems to enable rapid cycles of development, testing, and implementation of solutions. The degree of adoption and diffusion of Industry 4.0 Supply Chain management processes is likely to vary across both firms and countries.
Companies that implement Industry 4.0 supply chain management processes 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 their industry. The advantage is not limited to greater efficiencies, and organizations should align/partner themselves with a technologically advanced supply chain 4.0 provider to take advantage of digital supply chain solutions.
Empowered by artificial intelligence, machine learning, and big data analytics, the algorithms make informed decisions at every level of your business, providing real-time data analytics to optimize network density and equipment utilization across the entire network. Predictive analytics and intelligent decision-making add significant value for customers, particularly in industries.
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