Industry 4.0 And The Future Of Supply Chains

CNC Machine relating to the future of supply chains

In 1709, a new method of producing iron was developed at The Old Furnace in the village of Coalbrookdale near Ironbridge, a discovery that was to forever change the economies and societies of countries across the world. Heralded as the birth of the Industrial Revolution, it revolutionised many areas of manufacturing and paved the way for enormous change in the centuries that followed.

Today, many analysts argue that we are on the cusp of another industrial revolution: Industry 4.0. Instead of the smelting of iron ore, digitalisation and connectivity are the key drivers, which combine to enable the capture, exchange, and application of data on both physical and digital levels.

What Is The Relationship Between Industry 4.0 And Supply Chains?

Advances in information technology are the building blocks of Industry 4.0, particularly the Internet of Things (IoT), Artificial Intelligence (AI), Cloud infrastructures, Big Data analytics, private 5G networks, and AI for the IoT. These technologies work in tandem to collect and record data, organise and structure it, and analyse it to present business leaders with real-time information that can drive investment decisions to grow their organisations.

In manufacturing, the supply chain makes it possible to transfer and transform raw materials into completed products for distribution and sale. If manufacturing businesses are to gain maximum benefit from the advent of Industry 4.0, all partners in the supply chain must commit to capture and share data with each other, so that real-time data can influence and shape workflows and systems.

How Can Manufacturing Businesses Take Advantage Of Industry 4.0?

So, what does Industry 4.0 look like today? There are three broad areas: data capture, data analytics, and systems integration:

Data Capture

  • Mobile apps, to capture inventory data such as product details and locations, and to suggest stock replenishment based on live inventory data.
  • Automated supply technologies to track inventory and assess how stock is used in the business.

Data Analytics

  • Organising data to analyse activities and patterns, including the current state.
  • Simulating scenarios to forecast future states and consider how to plan for these.

Systems Integration

  • Automating the Procure-to-Pay cycle and transferring usage data into the Enterprise Resource Planning system.
  • Integrating point-of-use data with the supplier’s warehouse systems to make the supply chain more responsive.
  • Preventing gaps in the supply chain by integrating buyer-supplier demand forecasting.

As Industry 4.0 evolves, how we produce and use products will change, as new and imaginative possibilities emerge. Emerging technologies will facilitate faster, optimised manufacturing processes that business will be able to seize, reducing equipment downtime, shortening lead times, and increasing productivity.

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