Supply Chain Digitization: Transforming Your Supply Chain for Industry 4.0
The fourth industrial revolution -- commonly referred to as Industry 4.0 -- is well underway. In the quest to transform traditional manufacturing processes and create highly interconnected supply chain ecosystems in the global marketplace, supply chains are integrating automation, advanced analytics, the Internet of Things (IoT), robotics, big data and machine learning, and other technologies into their operations.
What does digitization look like? What is the difference between a traditional supply chain and a digitized supply chain? How can you and your organization make the transition to a more digital supply chain?
Before mentioning specific supply chain technology used in the digitization process, it might be instructive to explain why the trend towards supply chain digitization is happening in the first place. To make their supply chains more resilient to disruptions, responsive to demand shifts and competitive in their markets, businesses depend on the collection and analysis of 4 basic types of data: time, location, condition, and context. Explained another way, businesses want to know when products are moving, where they’re moving, how they’re moving and why they’re moving. The availability of these different types of data makes for more accurate business models, more realistic targets and greater supply chain visibility.
Besides the operational advantages of digitizing the supply chain, digitization also has the tendency to orient manufacturing businesses towards social media, eCommerce and other customer-centric business practices. There is mounting pressure to adapt to rapidly-changing customer expectations by offering more purchase and customization options, greater transparency and faster service. The explosive growth of rural areas, increasing carbon emission regulations and reduced labor availability have also played an important role in making supply chain digitization a top priority.
Digital Supply Chain vs. Traditional Supply Chain
Traditional supply chains are often closely tied to the sales and manufacturing side of the business, focused solely on optimizing production supply lines and getting deliveries to customers as quickly as possible. While these aren’t bad things, traditional supply chain operations also tend towards lots of digital waste. Manual, paper-based data management systems, lack of up-to-date data and failure to leveraging existing data are far too common. This, compounded by the inability to integrate data sources from different tiers and suppliers in the supply chain, leads to different planning cycles, production delays, lack of communication, and out-of-sync responses in each tier.
In digital supply chains, on the other hand, the use of IoT, prescriptive analytics, robotics and automation will turn an old-fashioned supply chain into a cutting-edge network of interconnected devices and systems. Add to that are smart sensor, mobile tracking solutions, increased computer processing power and storage capacity, intelligent algorithms and cloud computing, and you’re left feeling almost...omniscient.
Digital supply chains offer a far more complete view of the supply chain as a whole, with information available to all members of your organization simultaneously, helping to facilitate collaboration and more rapidly assess customer demand changes. Other characteristics of a digitized supply chain include:
- The use of advanced, predictive analytics to enable elaborate, continuous, integrated planning processes, and more accurate demand forecasts based on traffic, weather, and market data.
- More flexible deliveries and transport capacity making it easier to reroute shipments for faster delivery times.
- Automation technologies that are used to enhance efficiency. Robots and conveyor lines are now being used for receiving and unloading pallets and moving them throughout the warehouse. Autonomous trucks are used to move products between locations. Location-based picking instructions are provided to warehouse workers via Google Glass and voice picking solutions.
- Additive manufacturing solutions, such as 3-D printing, that can locally produce spare parts and tools that would otherwise take too long to be delivered.
- Real-time KPI data to enhance performance management by integrating various internal and external data sources.
How to Make the Transition
Transitioning from a traditional supply chain to a digital supply chain can, no doubt, be expensive and time-consuming, but it is well worth the cost. It all starts with having the right team and culture in place. The organizational culture should be well-established and stable, while also supporting an environment conducive to innovation. Organizational freedom and flexibility is required at every tier of the supply chain, and you must have the labor capabilities and expertise necessary to make the transition. Ultimately, you’re trying to make a shift from consensus planning to data-driven decision making and having the right culture and team in place can make that shift far less painful than it would be otherwise.
Sometimes overlooked during the transition period is the importance of cybersecurity. While you’re gaining all of the benefits of cloud-based data and user-friendly tech, you’re also opening yourself up to the possibility of cyberattacks. Increasing and improving your cybersecurity should be a top priority.
Your supply chain’s digital transformation starts with DATASCOPE WMS. While we offer a dedicated warehouse management system, our solution does so much more. If you’re looking to optimize your supply chain management, grow your revenue, lower operational costs, reduce waste, increase market share or provide more value to your customers, we can help! Our cloud-based supply chain solution is fully customizable and was built specifically with SYSPRO ERP in mind. To learn more about how our software can help with your supply chain digitization project, schedule a free software demo!