How is industry 4.0 impacting the supply chain?
In 2020, the industry 4.0 market was valued at $86.03 billion. Many industries, including the supply chain sector, have started utilizing industry 4.0 technologies. The supply chain sector was affected severely by the pandemic. Decades-long systems of optimizing the supply chain ecosystem to reduce costs, optimize inventory, and increase asset utilization were completely disrupted. But it led to the reshaping of the supply chain sector with the help of industry 4.0.
The industry 4.0 revolution brought on a new era of wholly digitized supply chain systems. Innovative technologies like – Blockchain, IoT, AI, and automated processes have helped businesses achieve success with improved supply chains. Research has shown an expected reduction of 75% in lost sales with the adoption of new-gen technologies.
In the past few years, the increased need for Digitization made the transition from industry 3.0 to industry 4.0 pretty smooth-sailing. While some organizations are still skeptical about it, many others are regularly incorporating industry 4.0 in their business. Here are some use cases that showcase the changes brought by the fourth industrial revolution.
Industry 4.0 and changes it's bringing across Key Industries.
Opportunity identification
Connected machines collect a large volume of data for identifying performance and maintenance issues. These machines can also conduct market research to identify new business opportunities, patterns, and market insights much quicker than humans. For example, an African Goldmine was able to identify a problem during leaching with the help of data sensors. Solving this issue increased their yield by 3.7% and helped them save $20 million annually.
Optimizing logistics and supply chain
A connected and digitalized supply chain can quickly detect any changes or information. It can also keep track of the complete supply chain ecosystem in a singular space. The incorporation of industry 4.0 technologies in the supply chain is expected to reduce operational costs by 30%.
Automated equipment and vehicles
Many shipping yards utilize automated cranes and vehicles to transfer shipments from the ports to the ship and vice versa. Research has shown that approximately a 30% increase in cost and productivity was noticed after incorporating automation in warehousing.
Robotics
Robots are now more affordable and available for businesses of every size. For this reason, many enterprises are using robots to automate business functions like packing products, getting them ready for shipping, etc.
Impact of industry 4.0 on Supply Chain
Transparency and increased accuracy-
With everything being digitized, more brands are spreading their reach to global markets. This global supply chain consists of various suppliers in different locations. It can be tough to keep track of every one of them. Having end-to-end transparency and asset tracking becomes highly crucial in such cases.
Industry 4.0 has introduced real-time asset tracking with the help of advanced technologies and cloud-based dashboards. Now, businesses can detect the location of products at all times. It has increased the accuracy of orders and ETAs.
Data based decision making-
Accurate predictive analysis of demand can reduce the error rate by 10-20%. Digitization of supply chain networks allows businesses to collect real-time data using Big Data Analysis, machine learning, and AI tools. These technologies help brands collect data about demand, weather conditions, and current market trends. Furthermore, analyzing this data helps to calculate and overcome the risks involved in the supply chain. Brands can adequately plan their inventory and reduce costs.
Brands can also use the analyzed data to connect the supply chain efficiently, find better pathways, and reduce the ETA for products.
Real-time planning and control-
Advanced analytical systems, IoT, cyber security, and AI, have made the supply chain much more secure and manageable. Businesses can now get real-time data about the supply and use that data for planning and strategizing. In addition, the combination of blockchain and IoT provides brands a better control of logistics and assets.
Analyzing the collected data daily or weekly helps prevent situations like-
- the product being out-of-stock,
- Late delivery,
- Being unaware of market trends.
Increased operational efficiency
Using advanced analytics, robotic process automation (RPA), and connected shipments. Industry 4.0 has significantly increased supply chain productivity. With automation at every level, businesses can run their operations efficiently and increase production capacity. In addition, industry 4.0 technologies have created a digital ecosystem where organizations can-
- Manage inventory processes
- Plan demand and supply
- Conduct Sales & operation Planning
- Track shipments
- Connect with the customers
Smart logistics-
Research conducted by Boston Consulting Group has shown that digital supply chain management gives a 25% faster response when it comes to market demand changes. Industry 4.0 allows enterprises to manage processes, track shipment, etc., under a single digital ecosystem. The fourth industrial revolution also introduced connected vehicles in the supply chain sector, which are efficient enough to take care of shipments with minimal human intervention.
Interaction between customers and supply chain platform-
Another thing that industry 4.0 impacted positively is the customer’s interaction with the supply chain. With the help of new-gen technologies, customers can-
- Track their packages
- Know the Estimated Time of Arrival
- Be notified of late delivery
- Connect with the delivery executives
In addition, a fully digital supply chain platform makes communication between the organization, suppliers, and customers much easier.