How Supply Chain 4.0 delivers the goods other approaches can’t
Supply Chain 4.0 uses digitalization to interconnect every part that matters
When supply chains hit the headlines, it’s almost never good news. Recently they’ve been in the headlines most days, sent into a tailspin by a mixture of panic-buying, workforce shortages, travel embargos and manufacturer uncertainty brought on by the pandemic. As people locked down, stocked up and logged on, the world soon faced shortages of everything from semi-conductors to bicycles.
But the pandemic isn’t the only curve ball. Take the supply logjam that ensued when a colossal container ship got stuck in the Suez Canal for 6 days this March, costing billions of dollars. Or the docking capacity issues that have left hundreds of laden cargo ships floating off the Californian coast, evoking the need for a US Presidential press conference, and revealing what the New York Times called ‘a crack in the supply chain’.
In fact, it’s probably a whole series of cracks that bring outwardly optimized processes like these to their knees. As the supply chains we all took for granted two years ago come under the spotlight, we’re waking up to the truth that goods get off the production line into our hands not by some sort of invisible Amazon-sponsored magic but by the painstaking alignment of connection after connection. And the whole process is way more fragile than we thought.
The future needs flex
From semiconductors to bicycles and Long Beach, California to the Suez Canal, the problem is always the same: rigidity.
The supply chains of the future need to be intuitively adaptable and flexible to shift to handle out of the blue events and unforeseen demands. Less brittle, more fluid.
That takes the kind of hyper connectivity that Industry 4.0 digitalization can bring.
Head of the Nokia global logistics practice, Venkatesh Ramakrishnan states in his blog titled, “Companies need new strategies to improve the resilience of their supply chains while keeping operational costs down — the strategies of Supply Chain 4.0.”
Supply Chain 4.0 is helping us transform supply chain resilience by intimately connecting every moving part, beginning right at the source, where the story is really born.
Resilience requires longer, deeper, smarter chains
Supply Chain 4.0 uses digitalization to interconnect every part that matters from where the raw materials are obtained to how they are transported to the manufacturer’s smart factory, how they’re efficiently turned into goods which leave the manufacturer and enter strategically located smart warehouses in order to meet demand closest to where it’s needed. That’s where logistics providers pick up from rail, road, air or seaports, fully connected into key elements of the process to plan, fulfill and deliver, with both the quantity of goods created and logistics capacity and automation needed to ebb and flow with demands.
Delivering all this, with the visibility required end-to-end requires industry 4.0 technologies bolstered by high-performance, everywhere broadband connectivity across industries, taking operational and situational awareness to advanced new levels.
Using automation, artificial intelligence (AI) and digital twins allows players to start creating the kind of touchless, insight-driven supply chains that will bend, not break, as circumstances change.
Automation is already here.
Robotics is increasing in use within supply chains to great effect. According to the World Economic Forum, they’re already sorting mail for the Hellenic Post in Greece, to help manage the pandemic-driven rise in online shopping. 55 robots work in one Athens site handling about a million items a week and increasing sorting speeds by 250%. Chinese retailer JD.com is also using hundreds of self-driving robots to deliver goods to customers and autonomous robots are widely deployed in smart warehouses to speed fulfilment.
With certainty of supply being one of the hallmarks of business and social stability, everyone wants to avoid another year of empty shelves and marooned cargo. First the industry will need to learn from its manufacturing counterparts and start to create highly digitalized supply chains that are ready for anything. As we’ve seen, anything less leaves consumers and businesses, sometimes quite literally, stranded at sea.