Implementing Industry 4.0 to Streamline Your Supply Chain

How beneficial will the fourth industrial revolution be for manufacturers? Here are three ways Industry 4.0 may help streamline your supply chain.

The digital revolution is upon us, and with it comes the arrival of Industry 4.0—the new wave of digital transformation hitting the modern supply chain. From the very latest in technology to whole new ways of thinking, it’s certainly set to shake up the dynamic of manufacturing. But how beneficial will it be for manufacturers in the long-run?

What Is Industry 4.0?

Being something of a buzzword for the last couple of years, most manufacturers are now fairly familiar with the idea of Industry 4.0. If you’re still not fully clued up on the term and what it entails, here’s a quick overview. Also referred to as the fourth industrial revolution, Industry 4.0 is the further digitization of the manufacturing sector. While Industry 3.0 introduced the likes of computers into the process, 4.0 focuses on enhancements via disruptive new technologies and software solutions that force businesses to rethink the way they operate. From machine learning, artificial intelligence, and automation to big-data analytics and the Internet of Things, this new wave of tech promises to provide a truly connected manufacturing network.

How Can Industry 4.0 Benefit the Supply Chain?

The adoption of Industry 4.0 looks set to benefit many aspects of the manufacturing sector, and none more so than the supply chain. Here are just a few examples of the ways in which the supply chain could be transformed:

1. Better Warehouse Management

The warehouses of this new era have the potential to be fully autonomous: a smart, interconnected environment with vastly improved efficiency. Warehouse inventory tracking software will constantly update in real time, with embedded sensors to indicate exactly when and where stock has been deposited and picked up. When delivery trucks alert the warehouse of their position and estimated arrival time, intelligent management systems will even be able to choose a docking spot for the item, and arrange for autonomous equipment to move it to a chosen location. This is the reality of a smart warehouse—streamlined and much less labor intensive than today’s warehouses.

Smart warehouse technology is already being tested by some businesses. DHL tested augmented reality in one of its Netherlands warehouses to great success. It utilized “vision picking,” in which staff wore smart glasses and were guided through the warehouse via graphics. This helped to reduce errors and sped up the picking process by 25%.

2. Reduction in Forecasting Errors

Predictive analytics will be one of the major capabilities of Industry 4.0. More than just reporting on the current state of the supply chain, advanced algorithms will be able to accurately predict demand volume for certain items, as well as highlight potential risks and identify trends further down the chain. This will help businesses plan accordingly, optimize their inventories, and reduce the likelihood of forecasting errors. It’s all about encouraging more informed and proactive decision-making by managers, which will, in turn, result in reduced costs.

3. Greater Visibility

One of the most common issues the supply chain faces today is a lack of shared information. In the world of production, disruptions are likely; but with so many different parties involved in the supply chain, it’s easy to lose sight of where things go wrong and fail to receive information in a timely manner. Going digital helps break down communication barriers and offer greater transparency, removing the outdated linear nature of the chain and allowing everyone to see the whole network.

It also makes for easier traceability, with real-time tracking and status updates similar to what we see in the B2C market now. This transparency goes a long way toward building stronger relationships with customers and suppliers alike.

Transforming the Supply Chain of the Future

Although the revolution is still very much in its infancy, the potential that comes with this new era of supply chain management is tremendous. Fast and flexible, the digital supply chain is one that’s set to be much more customer focused and to boost revenue via whole new avenues. As more businesses begin to adopt Industry 4.0 models and technologies, they’ll be able to establish supply chains that are more sustainable and efficient than ever before—and those that don’t adapt with the times will likely be left behind.