Supply Chain 4.0: The Future of the Supply Chain is Already Here - Sep 2018

Supply Chain 4.0: The Future of the Supply Chain is Already Here

While we don’t often think of it, the supply chain consists of more than just logistics activities, such as transportation, distribution, or warehousing. Marketing, finance, manufacturing, customers, and countless other internal and external factors each create a unique supply chain link. Often, these links operate in their own silos with very little input from the others. But that’s all going to change.

Enter Industry 4.0, also sometimes referred to as the fourth industrial revolution (if you missed it, the third industrial revolution usually refers to the rise of the internet and green energy technology). As physical and digital process automation and the Internet-of-Things (IoT) continue to combine with disruptive digital solutions such as cognitive technology and artificial intelligence (AI) to provide manufacturers with data on nearly everything, the supply chain must keep pace.

Meet Logistics 4.0

While there are many overlaps between logistics and production, some processes don’t necessarily fit under the “industry” heading. As such, experts have begun using terms such as Logistics 4.0 and Supply Chain 4.0 to describe advances taking place outside the manufacturing floor. While Industry 4.0 includes technology such as robotic automation or digital process improvement, Logistics 4.0 encompasses new technologies being tested in cargo storage and movement, such as driverless technology, unmanned drone delivery, intelligent shipping containers, smart warehouses, blockchain, and more.

So, what will this mean for your shipments, partners, and suppliers? Recent research from PWC provides an answer this question. PWC shows that the following five areas will see significant impact in coming years:

1. Visibility. Currently, you can check progress of your cargo at various touchpoints and estimate a reasonable delivery window. In the not-so-distant future, you’ll be able to view shipment status at any point during transit. GPS will let you know exactly where your cargo is and predict delivery within very narrow windows. Sensors will report temperature data and cargo condition.

2. Communication. Technologies such as blockchain will streamline communications more than ever before. Information will be available to all stakeholders simultaneously, reducing the need for lengthy calls, emails, or meetings that often take away from other supply chain management tasks.

3. Collaboration. Various supply chain stakeholders once did all they could to pass costs upstream or downstream to other players. More recently, however, collaborative efforts between partners have allowed us to reduce costs through improvements in the way we move freight and manage inventories. A smart supply chain – one fueled by increased data and driven by AI and IoT – will only further improve supply chain processes, allowing supply chain partners to further align their goals and implement more effective cost reductions

4. Flexibility. The “Amazon Effect” created the need for more effective prediction models, distribution practices, and delivery models. Two-day shipping changed the way retailers and manufacturers push/pull products and materials, and that delivery window is getting even shorter. Services like Prime Now offer many products within two-hours in metro areas. Amazon and parcel carriers have made progress with regulators on unmanned drone delivery. Remote door bells are now allowing for package delivery when nobody is home. The already limited room for error is disappearing, and the supply chain must be flexible and efficient.

5. Responsiveness. Even the most efficient supply chain will face disruption if it isn’t responsive. Supply chains will only become more responsive as disruptive technologies continue to advance our ability to monitor consumer trends, compensate for tragedies and natural disasters, and shift our processes to meet expectations. A technologically enabled supply chain means a supply chain that lets stakeholders meet uncertainty head on and adapt instantly.

What Can I Do Now?

Industry 4.0 isn’t just a concept. Most of these technologies are in advanced testing phases, or already in use. Speak with your logistics technology provider to find out what you can do to shake the dust off your traditional supply chain and push it into the digital age.

For the time being, focus on integrating your existing B2B technologies and preparing to connect your supply chain assets and technologies to the wider world. Meet with your suppliers, transportation providers, and other logistics partners and stakeholders, and discuss how you can collaborate to drive efficiency. Do all you can to stay abreast of up-and-coming technologies, and prepare a plan for integration into your own operation.

Supply Chain 4.0 is here, whether you’re ready or not. Don’t get left behind.