22 February 2019

The impact of Supply Chain 4.0

Certain stages of technological innovation are so transformative, they revolutionise the way we work. The first industrial revolution saw the dawn of mechanisation, the second involved mass production and the third was all about computers and information technology, and now many believe we are in the midst of the fourth right now; the era of big data, automation and digitisation.

Today, Industry 4.0 is making its presence felt across all aspects of the manufacturing process, including the supply chain. For bulk logistics companies, Supply Chain 4.0 represents a faster, more responsive and more efficient operational approach.

What is Supply Chain 4.0?

Supply Chain 4.0 is a digitised incarnation of the supply chain – one that’s enhanced by intelligent technology. With the ability to connect and record data from almost every stage of the process, Supply Chain 4.0 gives us the insight to make continual operational improvements as products move from supplier to customer.

In a ‘Supply Chain 4.0’ infrastructure, there are no separate, isolated systems or information silos; data flows freely through a network in which management systems communicate in real-time. Connected sensors turn previously un-trackable aspects of the supply chain into sources of data insight thanks to the Internet of Things (IoT), while big data analysis and artificial intelligence (AI) create opportunities to automate segments of the process without the need for human intervention. Each digitised part of the supply chain generates a continuous stream of data about its operational performance - information that can be used to refine it further still.

What can be achieved with Supply Chain 4.0?

So, Supply Chain 4.0 is fuelled by digital technology, but what does this mean in terms of actual benefits for the bulk logistics industry? Here are some of the ways that Supply Chain 4.0 methodologies can create tangible value for our sector.

A more transparent and agile supply chain

In a move away from the linear ‘step-by-step’ model of the traditional supply chain, in which each stage is separately planned and confirmed before the next, Supply Chain 4.0 is based on free-flowing information.

Thanks to connected systems, each party in the process – suppliers, manufacturers, distributors – have visibility of the movements and progress of the others, giving them a holistic view of the entire supply chain and instant alerts if a problem or delay occurs. This real-time transparency arms them with the agility to respond to changing supply or demand needs almost immediately, minimising supply chain interruptions and keeping things moving. 

A faster and more forward-thinking supply chain

Informed by data at every stage, Supply Chain 4.0 is naturally faster than its earlier guises. Digital connectivity both at base and in the field enables a smoother, more efficient and ultimately quicker handover between supply chain stages.  But that’s not all, there’s even more time-saving that Supply Chain 4.0 has the potential to achieve.

The analysis of vast amounts of supply chain and related data can be used to ‘train’ artificially-intelligent applications, until they’re capable of spotting trends and patterns, as well as the factors that contribute to them. These predictive analytics give logistics managers the ability to pre-empt surges or drops in demand, adjusting supply chain levels accordingly in order to meet imminent client needs in record time. For example, combining fluctuations in seasonal client demand with wider market trends and weather forecasting data could flag key periods of expected need before they occur – to the point where product could be shipped before a client places an order.  

A more accurate and efficient supply chain

Working from a ‘single version of the truth’ enables managers within Supply Chain 4.0 to prevent miscommunicated or unknown information from causing errors up and down the chain. No longer will discrepancies between different systems and sets of paperwork threaten to derail the process, instead constant digital communication gives everyone access to the same accurate and up-to-date data to work from and decide next steps. Furthermore, Supply Chain 4.0 creates scope for automation to take on many of the daily supply chain management tasks that can slow human managers down. The same AI that can learn to predict demand trends can be trained to automatically react when certain parameters are reached within the supply chain; to take mitigating action that leaves managers free to concentrate on more complex responsibilities.

Supply Chain 4.0 will shape the future of bulk logistics    

Ultimately, digitisation and its myriad applications have the power to turn the traditional supply chain into something dynamic; a data-led and data-generating process that constantly creates actionable performance-improving insight. Through logistics optimisation technology, we already have the capability to apply Supply Chain 4.0 methodologies to bulk logistics management; systems that can digitally ease the complexities of this unique sector and also link seamlessly with other parts of the supply chain. This technology will continue to evolve as the fourth industrial revolution unfolds, ensuring bulk logistics managers can stay at the forefront of digital innovation.   

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