5 ways Industry 4.0 impacts the supply chain

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Categories: Distribution / Supply Chain, SOFTWARE
February 8, 2018
Distribution management software

Today, the digital supply chain becomes an interconnected series of nodes that allow for more transparency and better manufacturing decision-making.

The fourth industrial revolution is changing the game for manufacturers who make the investment in innovative digital technologies. In addition, Industry 4.0 allows manufacturers to create new markets, products, and services that meet ever-evolving consumer demands and expectations.

One of the most powerful impacts of new data-driven manufacturing is on the supply chain. As seen in Industry 4.0: What It Means for the Manufacturing Industry, manufacturers that can best use supply chain partnerships, synergies, and insights are bound to make better-informed decisions that can generate new revenue streams and open up opportunities for new and improved business models.

Here are five ways Industry 4.0 impacts the supply chain.

1. A shift From linear

Traditionally, supply chains are linear entities in manufacturing, as manufacturers draw on suppliers of goods and products, that draw on their own suppliers of raw materials and so on. Information flows linearly in the traditional supply chain, and there is a great deal of dependence on information and actions from the source below each player on the chain. When there are inefficiencies at any step along the chain, the cascading effect can be disastrous.

With Industry 4.0, the linear supply chain is evolving into a dynamic digital network of nodes. This should be viewed as an opportunity for manufacturers to rethink how goods are produced.

With digital supply chains, there can be more transparency, more collaboration, and more information sharing that leads to better decision-making, often in real time. The supply chain is no longer a series of links, but a latticework of interconnected nodes allowing communication and collaboration between any party in the supply chain.

2. Integrated communication

Today, consumers want to have meaningful experiences with the products and brands they purchase. The increasing expectations (access anywhere, anytime, on any device) mean that manufacturers today need to interact with suppliers to provide solutions. With Industry 4.0 cloud solutions, data analytics, and IoT connected objects, manufacturers can collect, store, transmit, and analyze data faster than ever.

Sharing this information with suppliers is essential. With the integration of data and analytics via enterprise resource planning and distribution management software, companies can turn challenges into opportunities to delight consumers.

Distribution management software

Industry 4.0 allows for lower costs in the transportation and storage of component goods and finished products.

3. Data analytics

With massive amounts of data being generated by products and machines, companies have a veritable treasure trove of information available along with the tools to collect, store, display, and report on that information. Data analytics, when shared throughout the supply chain, can help identify inefficiencies and develop solutions at each step in the manufacturing process.

The analytics also allow companies to find which customers are the most profitable, where there is financial exposure, and where there is risk along the supply chain. With information processed in real time, manufacturers can be proactive and curb issues before they become problematic.

4. Lower transaction costs

Today’s technologies allow companies to lower transaction costs by identifying weaknesses early. If data can flow throughout the nodal supply chain, then manufacturing partners can help to pinpoint issues, optimize pricing, and find the best sources of information and products.

5. Innovation abounds

Just as Uber and Airbnb have disrupted the transportation and travel industries, so too can manufacturers identify new solutions that meet a need. Working closely with supply chain partners, manufacturers can find products and services that are disruptive, allowing them to enter markets that were previously impossible or improbable to pursue.

At NexTec Group, we help manufacturers find the digital solutions that allow them to leverage the power of Industry 4.0. Download the NexTec Corporate Brochure to learn how NexTec can help you and your supply chain improve your business.