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How Industrie 4.0 is changing the supply chain

Posted by CeMAT Team on 01-Dec-2016 10:27:07


In the hustle and bustle of digitisation, many businesses overlook the core premise of Industrie 4.0. Many believe the new Industrial Revolution simply means moving your processes online, and although that’s a great start, you’ll only be able to travel halfway to your real-time data journey.

But this new revolution of our time is in fact more nuanced than simply e-invoicing over the more cumbersome paper version. Rather, this new industrial revolution is connected to the Internet of Things and cloud computing so that information and data can be connected to everything, everywhere in your business.

In our previous post, we covered the Industrial Internet of Things (IIoT), and the way it supports ubiquitous connectivity between different business intelligence systems. However, one of the biggest hurdles for businesses looking to achieve true connectivity is data integration and getting different data streams to connect to each other.

We will begin to see more and more solutions coming to market to address this issue (EY and GE recently formed an IIoT alliance to provide industry-specific solutions to business), and as time goes on these solutions will become more accessible to all businesses. But for now, there needs to be an easy, effective and efficient way for businesses to tap into the benefits of a more efficient and easier way of doing business.

Let’s take a look at the shifting nature of the workforce and digitising the customer experience to see how Industrie 4.0 is already blurring business boundaries.



Shifting the workforce and utilising the fruits of automation

According to latest The World Economic Forum Future of Jobs Report, the focus on technology will mean that the jobs will go to those with the relevant skill-sets. With the rise of connected machines and artificial intelligence, jobs in the areas of professional services, manufacturing and retail could become highly automated.  As the founding director of the Centre for Technology Innovation at Brookings, Darrell M. West states:

‘The rapid increase in emerging technologies suggests that they are having a substantial impact on the workforce. Many of the large tech firms have achieved broad economic scale without a large number of employees. For example, Derek Thompson writes that “Google is worth $370 billion but has only about 55,000 employees – less than a tenth the size of AT&T’s workforce in its heyday [in the 1960s]’

There is no doubt Industrie 4.0 will result in the automation of mundane tasks by intelligent machines, and the insights that can be gained from this will prove invaluable to business. New categories of jobs will be created, some jobs will be replaced by automation, and there will be an increasing need for digital literacy for staff.

According to Accenture, real-time data access will enable staff to access performance data of equipment. To get started there are already a variety of simple solutions that can be implemented in your business to help bring your workforce into the future. Wearable technology, Global Positioning System (GPS) navigation, and moving to the cloud are some small and early technologies that could be utilised easily for dramatic results.

Eventually, as more technology solutions are introduced within the boundaries of an organisation, workplaces will become more flexible, and productivity and growth will increase due to the ability to make better decisions throughout the organisation.



Developing and focusing on the customer experience

If you can spend less time focusing on the more mundane tasks thanks to the evolution of the workforce, you can spend more time working on delivering new customer-oriented services.

Being able to access data from your supply chain right through to customer fulfilment (even in a B2B context), means you can reward customers for their time, money, effort and engagement. Predictive analytics also makes it possible for you to market to them if you understand their buying patterns and when they are likely to restock on a product they purchase consistently and regularly.

Further, establishing real-time data information structures enables you to create faster, easier and more accessible customer experiences. Marketing Leader at GE, David Kocher, thinks that the growth in technology will shift the focus from technology to experiences that are fed from IIoT. Stating:

“New technology and business model discussions abound with regard to the Industrial Internet of Things (IIOT). What you don’t hear as frequently are discussions about the impacts and changes IIOT will have on customers’ experiences, especially in a B2B model.

From my perspective, these changes will be as profound, if not more profound, than the business model impacts. Additionally, I believe the advancement from technology focus to experience focus will happen more quickly in this space than it has in others.”



Key takeaways on Industrie 4.0 and it's transformative impact

Industrial production was transformed by steam power in the 19th Century, electricity in the 20th, and automation in the 70’s. But we’re now on the cusp of a new revolution, where data and connectivity are beginning to blur the boundaries once sought by traditional business models.

Automating manufacturing technologies and the data exchange behind these operations, has created a new way of working with the exchange of information between cyber and physical systems. The new industrial revolution is heavily connected to the Internet of Things and cloud computing as these two innovations have made it possible for physical objects to tap into the internet.

The overall effects of these changes has been staggering to business and will have long lasting effects on the workforce and the transformation of the customer experience.

In the workforce, businesses will need to transform their operations and automate mundane tasks with intelligent machines, and further, new jobs including robotic design will be created moving in the future.

The customer experience will also be transformed as automation and data insights will make it possible to predict and personalise consumer interactions and transactions.

Is Industrie 4.0 as transformative as the introduction of steam power and electricity? What impact do you think it will have on business as we know it? Let us know your thoughts in the comment below.

Topics: Supply Chain Management