Supply chains, manufacturing and Industry 4.0

Supply chains, manufacturing and Industry 4.0

Milan Panchmatia Blog, Supply Chain

Cloud computing, robotics, automation, data exchange… 4C’s Milan Panchmatia considers how businesses can leverage new opportunities in the era of the ‘smart factory’

Industry 4.0, also known as the fourth industrial revolution, has the potential to transform the way in which products are created, transported and sold.

This new era was ushered in thanks to technologies such as automation, cloud computing, the internet of things and robotics. It marks the coming together of these solutions to create something more powerful than the sum of their parts. Namely, a smart manufacturing process, able to constantly adapt and change its output based on evolving business needs.

But what does this mean for businesses today?

Widespread opportunities

The sheer breadth of solutions that make up Industry 4.0 means opportunities to drastically reshape traditional manufacturing and supply processes are vast. Smart factories, for example, can leverage agile, automated processes and customer data to adapt to consumer demand in real time. This approach reduces waste, optimises the use of storage facilities and could enable products to evolve organically.

Another key element for businesses to examine is how better data visibility can affect relationships with suppliers. Deeper analysis will unveil mutually beneficial process improvements on both sides, resulting in more solid partnerships as well as a quicker, more efficient end-to-end solution. Again, real time data will provide opportunities to constantly iterate and refine processes, based on changing circumstances.

Real time insights have also opened the door for more accurate risk profiling in areas such security of supply and demand management. A more transparent supply chain also means a heightened ability to rapidly react to changes. Businesses will have a better idea of what risks need to be mitigated and which risks are worth taking.

Today’s reality

Industry 4.0 is not a vision of a distant future – all of the above technologies are being used today. Siemens AG, the largest engineering company in Europe, is already leveraging the power of these new solutions. Take the company’s programmable logic controls (PLC) manufacturing plant in Amberg, Germany.

Here processes have evolved to the point where a large part of the creation of automated systems has been automated. Siemens reports that this has led to near perfect 99.99885% rate of production quality. A particularly impressive feat given the plant churns out 12 million PLCs each year.

Siemens has also been quick to point out that people still play a key role in the process. A number of the most important decisions are made by technicians and there remains a need for supervisors to keep tabs on the plant’s value chain.

This process has been facilitated thanks to the real time tracking of each piece of equipment and part in the plant. A process which uses unique barcodes on each product to enable parts to communicate with the machines used in production.

A giant leap for mankind

The combination of technologies and solutions which make up Industry 4.0 is already tackling long-standing issues within the manufacturing industry. Thanks to data sharing, real-time analysis and machine learning, common problems such as limited supply chain visibility, lack of collaboration and inflexible processes are set to disappear.

Businesses in all industries need to work out how the new challenges and opportunities presented by Industry 4.0 will affect them. The changes will be far reaching and will stem far beyond their own processes. There is a need to consider how this wave of disruption will impact suppliers and customers, as well as internal processes.

The first industrial revolution was driven by steam powered machinery, the second by electricity and the third by digital technology. Each changed the world we live in and Industry 4.0 will do the same.