Industry 4.0 and the Digital Supply Chain

By Momentum |

digital supply chain

Digital technology is driving much of modern business, including industry 4.0, which represents the smart factory. It encompasses all the automated practices used by manufacturers to speed up production. The analytics that IoT technology generates can be used to streamline a factory, resulting in higher output at lower costs. Here are ways that this innovative wave is contributing to the digital supply chain.

Improving the Customer Experience

The digital supply chain should be an area of interest for businesses looking to dive deeper into smart manufacturing while improving the customer experience. By allowing supply chain members to input data in real-time into a supply chain reporting system, each member will be up-to-date and able to make better decisions related to orders and inventory. It’s possible, for example, to learn how customers respond in real-time to a product launch, which affects order flow.

Two major advantages for retail outlets using the digital supply chain model are that managers can make adjustments quickly and personalize products for customers. The key to personalization is having access to customer purchasing history and studying the customer’s in-store customer journey. This information can be collected from the customer’s store account or smartphone when they enter the store’s free wi-fi zone, which helps build loyalty with the establishment. Plenty of useful customer data can be stored in a customer relationship management (CRM) platform.

Heat maps are visual tools that can be linked to sensors to show which in-store display items get the most customer attention. They can also reveal what times and days of the week attract the most traffic in a certain location. This information can be used for staffing purposes and placing the most talented personnel on the floor when they are needed. A smart environment allows for store workers to receive alerts that indicate a customer needs assistance to learn more about a product.

In the digital age brand experiences must excite and inspire to capture consumer attention. There are so many alternatives at people’s fingertips on their smartphones that it’s difficult to compete without digital technology. Consumers expect on time delivery and positive responsiveness to demand.

Sustainability and Reducing Waste

Another deep concept that is embedded in industry 4.0 solutions is sustainable manufacturing of products and services. Cutting waste has been a big concern among manufacturers for both financial and environmental reasons. Companies can now use software to calculate the exact amount of raw materials that go to waste, so that they can work on solutions to reduce or eliminate waste. Ultimately, an operation becomes more efficient the more waste is reduced.

Sustainability plays into the overall economic picture of manufacturing and supply chains in multiple ways. Ideally, the material is recyclable so that surplus material can be sold or donated to another organization. Manufacturers are also moving toward solutions that put a minimal strain on the environment, as in avoiding the long-term environmental damage costs to society that add up. Since depleting supplies leads to scarcity and higher prices, which threatens customer relations, it’s up to manufacturers to continue finding more efficient solutions for supplies.

Better Visibility Across Departments

In last century’s workplace model, companies were divided into silos that were somewhat independent of each other. The industry 4.0 model allows for greater knowledge among decision makers of the bigger picture of a company’s day-to-day activities. Data can be used to evaluate worker productivity and performance, as well as pinpointing who is causing inefficiencies due to lack of skills or knowledge. The information can be studied in real-time to fix weak links in the system as they are discovered by managers on a simple easy-to-understand dashboard.

A smart platform gives management the ability to evaluate how money is spent in any department at any given time and how personnel are being utilized. It provides the potential to sharpen the company’s understanding of customer demands and fix supply chain imbalances quickly. By breaking down silos, departments can engage in more synchronized planning, which helps speed up planning cycles.

How Greater Connectivity Improves Efficiency

The more devices that can be connected to a business network, the more the system can be analyzed to improve efficiency. Allowing for this smart connectivity gives organizations better visibility of the entire operation with the ability to detect and correct vulnerabilities. The more a system can collect information and treat each customer as an individual with a unique history instead of just as a raw statistic, the more the company can move toward flexibility and customization.

One of the keys to speeding up manufacturing processes is automation. Robots and algorithms are useful for getting work done faster with higher accuracy. This fact does not necessarily mean a company should replace all its workers with machines, as the more powerful strategy is to combine automation with human talent for quality control purposes. The human mind is usually still better at making decisions than an AI-driven computer program, especially when it comes to handling customers.

The key to greater connectivity is using more bandwidth, which allows for tracking video as well as data from IoT sensors. Managing and storing this data is becoming a growing issue among big companies, but there are also new solutions addressing this issue. The use of codes to abbreviate data has helped speed up data transmission and reduce bottlenecks. Edge computing is another solution for keeping big data under control.

On time Delivery

A crucial aspect of how the supply chain affects the customer experience is whether or not the product is delivered on time. A digital network allows for a manufacturer to track exactly where any given unit based on its serial number exists in the supply chain, thanks to RFID technology. In the old days when machines didn’t keep as close track of every product, it was possible for someone in the supply chain to get away with theft. These days points of contact are digitized to where theft is easier to catch, which has helped reduce the problem.

Supply chain managers can now plan delivery routes based on weather and traffic conditions. Temperatures of products can be monitored in real-time to make sure they are not damaged in the process. By improving delivery experiences, a company can ultimately improve the customer experience, especially if the product is delivered sooner than expected.

From Supply Chain to Supply Brain

Ultimately, the goal of a modern digital company with access to AI technology should be to transform its supply chain into a more powerful hub. A modern supply chain behaves more as a responsive network than just vendors linked together. It allows for all the players to take proactive steps that prevent errors of the past. Collectively, each player contributes to a smarter, centralized “brain” that has access to vast amounts of internal and external information.

When a digital “supply brain” is put to good use, it can increase the company’s flexibility and ability to deal with customers and vendors on a personalized level. The company will save money and time by hiring the right talented professionals to study analytics and make quick decisions about improving manufacturing efficiency. Ideally the system is set up to allow for easy integration with new devices that can be added to the data collection process in the future.

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