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Supply Chain 4.0 Is The Next Big Thing In The Market

Supply Chain 4.0

History of supply chain with its transformation

Supply chain 4.0 includes the use of modern instruments such as robotics, internet of things, and advanced analytics of big data that will help all the retailers and businessmen to improve their performance and with that, they can also focus on increasing their customer’s satisfaction. For any business to run for a long period, constant improvement in their methods as well as accepting the change becomes important.

Over the last three decades, the supply chain has completely transformed from just being a part of the process to completely becoming a whole new entity of its own. Later, supply chain management included advanced planning of demand and supply for specially designed sales and operation teams to manage sales. And after that it also started to outsource logistics to reduce the load from the business that helped the businesses to focus on its core activities.

Supply chain 2.0, was mainly based on paper, and used low level of digitisation. Most of the processes were done manually. However, it had some of limitations such as restricted data availability. Supply chain 3.0 had the basic digital component placed but wasn’t fully developed.  But, Supply chain 4.0 is the most matured of all three levels and predicted to become the next big thing in the market.

Understating Industrial revolution 4.0 with current trends

Industry 4.0 is a new phase of the industrial revolution in the world that aims at automation, interconnectivity, machine learning, and real-time data. This revolution has brought a huge change and chaos in the market that makes all the businesses to push themselves to try out new ways to manage their supply chain and also rethink their earlier ways of supply chain management. Within this period there were several changes affected the market right from increasing pollution to steady development in the urban areas all over the world.

The online market trend is getting huge day by day. Owing to this growth, the customers are getting more options to choose from with other customised services. The pressure to stay alive is also increasing with such competition around where businesses are providing services such as one-day delivery, on-time delivery.

Digitization of Supply Chain

Upgradation of the supply chain can be one of the methods used for tackling these changes and trends. Digitization of the supply chain will make the supply chain faster, flexible, accurate, efficient and individualistic.

Using advanced forecasting approaches such as predictive analytics of internal and external trends will reduce down the delivery time of the high runners to just a few hours. For more precise decision of demand and supply, the forecast can be carried out weekly or on a daily basis depending upon the product instead of monthly. Real-time planning helps to react according to the current demand and supply situations in the market. The idea of mass customisation and micro segmentation will be implemented as demand from customers for individualised products is continuously increasing. With the advancement of the technology and use of the same in the supply chain will provide more accurate data related to the products and services. Efficiency plays a key role in every industry but in case of the supply chain management, the use of robots delivers outcomes more efficiently as compared to humans. To make most of supply chain 4.0, companies need to create more flexible and transparent planning which will not only help them to cash on the ever-changing situation of the market, but also enable them to predict their business for the future.

The truth behind Data wastage

Irregular updating of data in the system, that has remained unchanged for years, can affect the balance sheet of the company. If incorrect data is communicated with others, it can cause a lot of data wastage, thereby hindering the performance efficiency. The process of supply chain is interlinked with each other and delaying in one process can hamper the other processes as well. Therefore, updating correct data is extremely important. For this, the organisational setup, processes, governance, and incentives need to be arranged within and between partners in the supply chain to get the advanced level of integrated process.

How supply chain 4.0 will bring the change?

The upcoming supply chain will mostly depend upon big data, advanced analytics, and automation knowledge of work. Predictive analytics in demand planning and closed-loop planning are the two examples of levers that can make a significant impact. Supply chain 4.0 will change the traditional methods of logistics with better connectivity, additive manufacturing, advanced analytics, and advanced automation. The performance management process moves from a regular process to often monthly process to an operational process, aiming directly at continuous improvement and exception handling. Touch order processing and real-time re-planning are the two examples of how order management is improved in lowering the cost through higher reliability due to granular feedback, automation of efforts, and superior customer experience through reliable and immediate responses. The collaboration of information can be done using clouds between customers, suppliers, and the company and with the logistics department. It can also be used between the partners or businesses helping them to learn from each other.

The need and requirement of the businesses are different from each other mostly depending upon various factors such as location, government policies, economy, current situation, climate, and many more. Hence, the customization of the supply chain is a must to meet the demand of the customers and business.

The unavailability of the product in the current stock may lead to losing the customer. This may lead to customer shifting to other brands. Introducing advanced methods can bring overall transform the supply chain process. Minimizing the transportation system, proper channeling of resources, maintaining proper stock count, and regularly updating the data are few of the methods that can be used to reduce the supply chain cost. Planning is the foremost step of any system where the major decisions are taken to properly systemize the process. If implemented, it will result in cutting down most of the unnecessary costs.

Digital supply chain

The transformation of the supply chain can be done using two factors such as capabilities and environment. Digitization will increase the capabilities of the organization and target the same while recruiting for a similar profile. The second step is to create a basic environment for the organization to establish the digitization, an independent environment where testing, development, and implementation of the solution can be implemented. All in all, it will make the supply chain faster, reliable, more flexible, and efficient.