In a previous blog, we outlined what the digital supply chain looks like in the Industry 4.0 era. To briefly recap, it is not just about operating digitally – communicating digitally, analysing data digitally, etc.
Instead, it is about connecting all elements in your supply chain in real-time, providing you with simultaneous and instant communication capabilities as well as real-time oversight of your supply chain’s component parts.
Why is this important? How will implementing digital supply chain technologies and processes improve your business?
What is Wrong with Current Supply Chain Management Processes?
Let’s first look at the problems that exist with current supply chain management processes. Those problems include:
- Poor visibility and oversight – you are likely to have limited access to data from the elements in your supply chain, and that data will not be in real-time. This lag in data access forces reactionary decision-making rather than predictive decision-making.
- Slow decision making – following on from the above point, the entire decision-making process operates slower than it should.
- Lack of operational certainty – slow, reactionary decision-making creates operational uncertainty. Another contributing factor to this uncertainty is the lack of real-time oversight of elements in your supply chain.
- Unaligned objectives – the different elements in your supply chain will face different pressures and will have different priorities. For example, one stakeholder might underestimate capacity as it doesn’t want to fully commit what is available because bottlenecks in other parts of the supply chain in that past left its capacity unused.
- Lack of trust between stakeholders – the above creates a lack of trust between stakeholders in the supply chain, where the various elements have competing priorities, i.e. their own interests and the interests of the supply chain/manufacturing operation.
How the Digital Supply Chain Will Transform Supply Chain Management
For companies like us at SL Controls that work daily with Industry 4.0 technologies, we talk a lot about business transformation. Implementing Industry 4.0 technologies is, of course, an evolutionary process, but the solutions and systems that we implement are transformational.
This applies to the digital supply chain too. Below are some of the main ways the digital supply chain transforms manufacturing businesses.
- With fewer manual processes in the supply chain, accuracy and speed improve. This improves the service you provide to customers. For example, the digital supply chain is an important component to achieving batch-size-of-one operational capabilities.
- Predictive analytics, predictive maintenance, big data, and machine learning increases OEE and production uptime.
- The digital supply chain also enables predictive decision-making. Most manufacturing facilities currently look backward when analysing supply chain data. Companies with more advanced systems and processes have moved to a point where they have access to some real-time data. This is limited, however. Accurately predicting future outcomes and situations in the supply chain based on real-time data is the real game-changer, though. By moving to a digital supply chain and implementing other Industry 4.0 technologies, predictive data analysis is possible.
- With the digital supply chain, you can move away from repetitive tasks that generally do nothing more than keeping things ticking over in your supply chain. Instead, you can allocate resources to planning, strategy development, and performance improvement.
- The digital supply chain enables a more collaborative approach between different functions in your organisation as well as different elements in the supply chain. For example, the digital supply chain can align objectives and priorities while also increasing visibility and trust.
The manufacturing operations that will remain competitive in the future will be those that move beyond the hybrid supply chain situation we have now, where there are digital components, but processes are manual and reactionary. The digital supply chain is the future.