Industry 4.0 is a vast subject involving technological systems and functions integrated with practical manufacturing applications, but it’s worth noting that some metalcasting operations are well beyond the concept stage.

In simple terms, Industry 4.0 describes a network of machines and processes sharing critical operating data, and at the same time contributing to an expanding volume of data that grows an organization’s control over its activities and opportunities. At the organizational level, it makes long-term planning more feasible, shortening process or equipment launch cycles, and improving yields, and enhancing communication across the organization.  It provides real-time data, allowing operators to see and address problems before a failure occurs, for a significant reduction in unplanned downtime.

The application of the Internet of Things, the use of advanced robotics, and the application of advanced analytics of big data in supply chain management: place sensors in everything, create networks everywhere, automate anything, and analyze everything to significantly improve performance and customer satisfaction”

Over the last thirty years, logistics has undergone a tremendous change: from a purely operational function that reported to sales or manufacturing and focused on ensuring the supply of production lines and the delivery to customers, to an independent supply chain management function. The focus of the supply chain management function has shifted to advanced planning processes, such as analytical demand planning or integrated S&OP, which have become established business processes in many companies, while operational logistics has often been outsourced to third-party LSPs. The IOT enabled supply chain function ensures integrated operations from customers to suppliers.

Trends in supply chain management

Industry 4.0 creates a disruption and requires companies to rethink the way they design their supply chain. Several technologies have emerged that are altering traditional ways of working. On top of this, mega trends and customer expectations change the game. Besides the need to adapt, supply chains also have the opportunity to reach the next horizon of operational effectiveness, to leverage emerging digital supply chain business models, and to transform the company into a digital supply chain.

Several mega trends have a heavy influence on supply chain management: there is a continuing growth of the rural areas worldwide, with wealth shifting into regions that have not been served before. Pressure to reduce carbon emissions as well as regulations of traffic for socioeconomic reasons add to the challenges that logistics are facing. But changing demographics also lead to reduced labor availability as well as increasing ergonomic requirements that arise as the workforce age increases.

At the same time customer expectations are growing: the online trend of the last years has led to increasing service expectations combined with a much stronger granularization of orders.  To build on these trends and cope with the changed requirements, supply chains need to become much faster, more granular, and much more precise.  The Supply Chain as a Service automation with autonomous machines in warehouse, logistics, transportation on open highway, and mobile edge computing enabling drone delivery is about to come to a town near you.

  • New business models, such as Supply Chain as a Service for supply chain planning functions or transport management, increase the flexibility in the supply chain organization. Supply chain can be bought as a service and paid for on a by-usage basis instead of having the resources and capabilities in-house. The specialization and focus of service providers allow them to create economies of scale as well as economies of scope and also attractive outsourcing opportunities.  For example, we will see an “Uberization” of transport: crowd-sourced, flexible transport capacity, which will lead to a significant increase in agility in distribution networks.
  • … more granular. The demand of customers for more and more individualized products is continuously increasing. That gives a strong push towards microsegmentation, and mass customization ideas will finally be implemented. Customers are managed in much more granular clusters and a broad spectrum of suited products will be offered. This enables customers to select one of multiple “logistics menus” that exactly fits their need. New transport concepts, such as drone delivery, allow companies to manage the last mile efficiently for single and high-value dense packages.
  • … more accurate. The next generation of performance management systems provides real-time, end-to-end transparency throughout the supply chain. The span of information reaches from synthesized top-level KPIs, such as overall service level, to very granular process data, such as the exact position of trucks in the network. This range of data provides a joint information basis for all levels of seniority and functions in the supply chain. The integration of data of suppliers, service providers, etc. in a “supply chain cloud” ensures that all stakeholders steer and decide based on the same facts.

The transformation from traditional manufacturing to intelligent manufacturing will have profound and lasting effect on the future manufacturing worldwide. Industry 4.0 was proposed for advancing manufacturing to realize short product life cycles and extreme mass customization in a cost‐efficient way. As the heart of Industry 4.0, smart factory integrates physical technologies and cyber technologies and makes the involved technologies more complex and precise in order to improve performance, quality, controllability, management, and transparency of manufacturing processes.  Autonomy Association continues to identify the requirements and key challenges, investigates available new technologies, reviews existing studies that have been done for smart factory, and further provides guidance for the global community on implementing smart factory robotics in the context of Industry 4.0.