Industry 4.0 technologies are empowering companies to rethink how they design their supply chain. The digitization of the traditional supply chain enables companies to address their customers’ growing expectations while also driving efficiency and higher KPI’s.
The wide-scale digitation of a traditional supply chain incorporates emerging technologies throughout its end-to-end processes from raw materials to last-mile delivery. A digital supply chain uses software to track every element of product fulfillment. This includes the source and status of:
• Materials and inventory necessary for production
• Human resources and equipment required for production
• Customer orders indicating the necessary level of production
• The distribution network
Digital supply chains have a number of advantages over traditional methods. The three primary benefits are efficiency, agility, and insight.
Implementing a digital supply chain requires comprehensive tracking of all resources, typically using enterprise resource planning (ERP) software. Gaining such a granular, real-time, end-to-end view of resources increases asset efficiency from equipment to materials and labor. By maintaining a persistent view of the entire supply chain, manufacturers can order only what they need, only when they need it.
By the same token, a digital supply chain improves agility in adapting to adverse conditions. If there is a sudden spike in demand, real-time visibility of supply can be used to rapidly source the extra resources required to meet it. This can become a major competitive advantage; ambitious SLAs serving as a key differentiator.
Adopting a data-driven digital supply chain can yield insight across the enterprise. Unifying information from each stage may uncover systemic issues. Real-time visibility can help to drive better decisions. Interconnected pieces of information prevent data from becoming siloed and can spark collaborative problem-solving and analysis between departments.
Cloud computing and the Software as a Service (SaaS) model have made the tools of a digital supply chain relatively accessible to businesses. However, digitizing the supply chain requires more than mere software.
Achieving a digital supply chain requires fundamental changes to the way your organization approaches its supply chain. One key factor is orchestration among each link in the chain. For full visibility, you will need all your suppliers to participate in your network, as well as each of your own departments.
Successful implementation requires a strong vision of what you’re trying to achieve. Be clear about the business objectives you’re hoping to meet in the process of digitizing your supply chain. Undergoing a digital transformation is not a one-size-fits-all process. Your objectives will guide you through the appropriate steps for your unique organization.
The ideal digital supply chain has visibility of every element but collecting data from the complex environments on the factory floor can be challenging. Data collection must be cross-functional, standardized, and centralized; implementing an industrial internet of things platform can help to streamline data across your enterprise.
Digitizing the supply chain is a complex undertaking, necessitating as much organizational change as technological. However, the efficiency, productivity, and competitive advantages of a supply chain enabled by digital manufacturing solutions are more than worth the effort—you just have to be clear about what you’re trying to achieve beforehand.