Streamlining the Supply Chain with Industry 4.0

By Scott Fawcett, Divisional Managing Director, Essentra Components 

We’ve seen the developments of Industry 4.0 through the establishment of smart factories, automated and digitised manufacturing processes and smart data. But how is Industry 4.0 impacting the supply chain? In today’s world, the supply chain is a hugely complex, multi-faceted ecosystem. As many of us know, it’s all too easy for one weak link to break this chain and completely shut down the entire manufacturing process. In a world where digitisation and automation are completely transforming traditional processes from the very core, the supply chain can hugely benefit from these developments which will help businesses futureproof themselves in this new world.

Establishing a Transparent Ecosystem

Collaboration is key. There is a huge number of suppliers feeding into the supply chain ecosystem at any given time so it is essential that the network is transparent and works collaboratively with all parties. A lack of clarity can mean that links and relationships can break down and disrupt the efficiency of the process. Complete transparency enables businesses to not only respond to problems in real time but also to anticipate any issues and respond to them ahead of time.

As a means of ensuring this supply chain visibility, companies rely on an effective and streamlined implementation of a “track and trace” (T&T) system. Two years ago, Essentra Components launched the SO99 demand planning platform in EMEA and will shortly be launching this system in the Americas. This platform is an aggregated global demand plan for all vendors, providing transparency across the entire business process.

Driving Efficiencies

The ultimate end goal of digitising and creating a fully integrated supply chain network is to improve productivity. Not only will companies be able to reap the financial rewards of an efficient supply chain but customers will also benefit from improved turn-around times as businesses respond to customer demand in real time. Boosting the agility of the supply chain will reduce the amount of down time on each machine which will ultimately reduce operational costs.

Through the installation of a digitised and fully integrated supply chain network, companies will be able to respond to customer demand more effectively and efficiently, which will ultimately strengthen productivity rates. Every link of the supply chain network will have full visibility into the needs and challenges of the ecosystem. Any developments ranging from a sudden increase in customer demand to a breakdown of a key manufacturing component can be signalled at any point and will travel immediately throughout the network.

Time is of the Essence

There is simply no time to waste when it comes to bringing the supply chain online and up to date. Manufacturers who fail to respond to this risk being left behind as competitors strive to remain one step ahead of this revolution. This has been stressed in a recent study by Pricewaterhouse Coopers (PwC) on the rise of Industry 4.0[1]. The study revealed that a third of companies surveyed have already started to digitise their supply chains, and 72% of respondents expect to do so in the next five years.

Forward-thinking manufacturers can expect annual efficiency gains of 4.1%, whilst boosting revenue by 2.6% a year.[2] This transition to a digitised network will require integrated planning and execution systems, logistics visibility, autonomous logistics, smart procurement and warehousing, spare parts management and advanced analytics. Though not a small undertaking logistically or financially it is clear that manufacturers that embark on this change will reap the benefits. With so many layers involved in the supply chain ecosystem, a transparent and digitised network will bridge the gap between supply and demand. Every facet of the supply chain network will support a fully visible feedback system, reporting on the needs and challenges of the ecosystem.

Invest Now, Reap the Rewards Later

Above all, the main aim of the digital supply chain is to open up the network and provide visibility for everyone involved. Manufacturers wanting to compete on a global scale must begin implementing a digitised supply chain network now. In doing so, businesses can respond in real time, ultimately improving the experience both for the manufacturers and the customers. Supply chains are extremely complex and multi-faceted so this digitisation will be no easy feat. However, manufacturers must be reassured by the fact that this long term investment will pay dividends to the company for many years to come.

Evidently, this is no small task and manufacturers must invest time and money into this vital upgrade in the supply chain. However, manufacturers must be rest assured in the fact that once their processes are fully automated and transparent, the company will be able to reap the rewards for many years to come. Automation will ultimately drive productivity, improving the experience for both the manufacturers and the customer.

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