If the vision of Industry 4.0 is to be realized, most enterprise processes must become more digitized. A critical element will be the evolution of traditional supply chains toward a connected, smart, and highly efficient supply chain ecosystem. The supply chain today is a series of largely discrete, siloed steps taken through marketing, product development, manufacturing, and distribution, and finally into the hands of the customer. Digitization brings down those walls, and the chain becomes a completely integrated ecosystem that is fully transparent to all the players involved -- from the suppliers of raw materials, components, and parts, to the transporters of those supplies and finished goods, and finally to the customers demanding fulfillment. This network will depend on a number of key technologies: integrated planning and execution systems, logistics visibility, autonomous logistics, smart procurement and warehousing, spare parts management, and advanced analytics. The result will enable companies to react to disruptions in the supply chain, and even anticipate them, by fully modeling the network, creating "what-if" scenarios, and adjusting the supply chain in real time as conditions change. Once built -- and the components are starting to be developed today -- the digital supply "network" will offer a new degree of resiliency and responsiveness enabling companies that get there first to beat the competition in the effort to provide customers with the most efficient and transparent service delivery. At most companies, products are delivered to customers through a very standardized process. Marketing analyzes customer demand and tries to predict sales for the coming period. With that information, manufacturing orders raw materials, components, and parts for the anticipated capacity.
IDC recently released a report, "IDC FutureScape: Worldwide Manufacturing Predictions 2018," surveying the global manufacturing landscape. When creating its predictions the firm examined ecosystems and experiences, greater intelligence in operational assets and processes, data capitalization, the convergence of information technology (IT) and operations. Most of the group's predictions refer to a continuum of change and digital transformation (DX) within the wider ecosystem of the manufacturing industry and global economy.
Retail, one of the largest industries in the world, totaled an estimated $5.73 trillion in sales in 2017 in the US according to Plunkett Research. This is an increase compared to the $5.52 trillion in sales in 2016 according to the U.S Census Bureau. With the help of artificial intelligence, consumers are experiencing a whole new way of shopping both online and in stores. AI in retail is being applied in innovative ways - from before a sale to after products or services is purchased. Businesses of tomorrow must keep up with customer expectations and implementing AI can help.
From advanced robotics in R&D labs to computer vision in warehouses, technology is making an impact on every step of the manufacturing process. Lights-out manufacturing refers to factories that operate autonomously and require no human presence. These robot-run settings often don't even require lighting, and can consist of several machines functioning in the dark. While this may sound futuristic, these types of factories have been a reality for more than 15 years. Famously, the Japanese robotics maker FANUC has been operating a "lights-out" factory since 2001, where robots are building other robots completely unsupervised for nearly a month at a time. "Not only is it lights-out," said FANUC VP Gary Zywiol, "we turn off the air conditioning and heat too." To imagine a world where robots do all the physical work, one simply needs to look at the most ambitious and technology-laden factories of today. For example, the Dongguan City, China-based phone part maker Changying Precision Technology Company has created an unmanned factory. Everything in the factory -- from machining equipment to unmanned transport trucks to warehouse equipment -- is operated by computer-controlled robots. The technical staff monitors activity of these machines through a central control system. Where it once required about 650 workers to keep the factory running, robot arms have cut Changying's human workforce to less than a tenth of that, down to just 60 workers. A general manager for the company said that it aims to reduce that number to 20 in the future. As industrial technology grows increasingly pervasive, this wave of automation and digitization is being labelled "Industry 4.0," as in the fourth industrial revolution. So, what does the future of factories hold? Manufacturers predict overall efficiency to grow annually over the next five years at 7x the rate of growth seen since 1990.
Efficiency and cost-effectiveness are the biggest challenges facing supply chain management today. Businesses are continually striving to reduce costs, enhance profit margins, and provide exceptional customer service. In such a competitive market, disruptive technologies like Machine Learning (ML) and Artificial Intelligence (AI) have opened up exciting opportunities for companies. Are you grabbing these opportunities? Artificial Intelligence and Machine Learning have recently become buzzwords across different verticals, but what do they mean for modern supply chain management?