Industry 4.0 Transforming Supply Chain Trends

We are witnessing the dawn of the fourth industrial revolution. Industry 4.0, as it is sometimes called, is the result of decades of digital innovation, research, and development. Industry 4.0 is characterized by the use of emerging technologies like the Internet of things (IoT), machine learning (ML),  artificial intelligence (AI), and the use of Big Data in advanced data analytics. 

This digital revolution and its groundbreaking effects on production and manufacturing have transformed supply chains across businesses and industries. Industry 4.0  is centered around leveraging global networks of machines (albeit in a controlled setting), to create cyber-physical systems that allow these machines to operate autonomously, exchanging information, and controlling each other. Essentially creating a smart factory and bringing about a future of growth and efficiency through the new paradigm of Supply Chain 4.0.

By definition, smart factories are flexible and embrace adaptation for changing industry trends and demands. Smart factories are constructed in ways that their operations can be monitored, controlled, coordinated, and integrated via a computing, communication core, making it a functioning cyber-physical system (CPS). The CPS is developed in ways that integrate computing and communication with physical processes for the addition of new capabilities

Industry 4.0 has not only transformed the structure of supply chains, but it has also changed the way we view supply chains. Industry experts and market analysts have been observing a dramatic shift away from traditional sequential strategy hierarchies. Supply chains and the process of supply chain management are no longer a linear set of activities starting from vision to execution. With the introduction of Industry 4.0 technologies, widespread data availability, and increasingly sophisticated data analytics, what used to be a linear process has since become interconnected, iterative, and dynamic, networks of systems and practices. Sometimes referred to as Digital Supply Networks (DSNs)

DSNs consolidate information from a diverse range of sources to drive production and distribution and can drastically change the manufacturing’s competitive landscape.

Interconnected systems like DSNs can make the integration of ecosystem partners a smooth process. Over time, such systems can achieve their optimal state and allow the creation of a world that is virtual but mimics and informs the physical. By using a combination of the traditional and the new, DSNs can provide comprehensive views of the supply network and rapid responses to unanticipated changes and challenges.

In this volatile, ever-changing world, Supply Chain 4.0 is not just a trend within the industry, it is an irreversible, cultural shift.  Successful companies of today and tomorrow will have to take a proactive approach to their supply chains to remain viable regardless of major events or business occurrences outside of their control.


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