How is Industry 4.0 impacting the supply chain?

Essentra Components Ltdvisit website


Scott Fawcett, Divisional Managing Director of Essentra Components, discusses the impact industry 4.0 has had on the development of the supply chain, the need to streamline manufacturing processes, and the need to build one transparent ecosystem.

Driven by the changing demands of customers, Industry 4.0 is completely transforming the manufacturing industry once and for all. An increase in connectivity, digitisation and automation is shaking up traditional manufacturing processes, and there is no better example of this than in the supply chain network. This multi-faceted ecosystem, linking manufacturing, product development and distribution networks into one fully transparent and digitised network, is the root of all successful businesses. However, upgrading these systems is no easy feat. While this transition may seem overwhelming both financially and logistically, manufacturers need to take this leap and invest now to reap the rewards for many years to come.

Technological developments are being made at an ever-increasing rate and continue to dominate every aspect of society. It was therefore inevitable that digitisation would seep into our industry and impact the way products are manufactured. Change is happening now, and for those manufacturers who want to stay ahead of the competition, they must respond now by implementing a more digitised, automated and streamlined approach to their manufacturing process and supply chain.

Building a seamless integrated approach

There is no ‘quick fix’ to implementing this change to a more connected, smart and highly efficient ecosystem. Building a completely connected supply chain ecosystem will require a great number of components, including integrated planning and execution systems, logistics visibility, autonomous logistics, smart procurement and warehousing, spare parts managements and advanced analytics, to name a few. Given the number of suppliers feeding into the chain, it is fundamental that the network is transparent. A lack of transparency and clear lines of communication can lead to links breaking down and disrupting the efficiency of the process.

Transparency will enable businesses to not only react to problems in real time but also to anticipate them. Those that respond proactively will ultimately be ahead of the competition, with the ability to anticipate any potential issues and safeguard their manufacturing processes, should conditions change. Manufacturers must not be deterred by the challenges, both logistic and financial, that lie ahead, and must be reassured that they will see an immediate improvement in efficiency.

Driving efficiencies

Through the installation of a digitised and fully integrated supply chain network, companies are able to respond to customer demands more quickly and effectively, ultimately strengthening productivity rates. According to a recent study by PricewaterhouseCoopers (PwC) on the rise of Industry 4.0, a third of companies surveyed have already started to digitise their supply chains and 72 per cent of respondents expect to do so in the next five years. Crucially, companies with highly digitised supply chains and operations can expect annual efficiency gains of 4.1 per cent, while boosting revenue by 2.6 per cent a year.

With so many layers involved in the supply chain ecosystem, a transparent and digitised network will bridge the gap between demand and supply. Every link of the supply chain network will have full visibility into the needs and challenges of the ecosystem. Any developments, ranging from a sudden increase in customer demand to a breakdown of a key manufacturing component, can be signalled instantaneously and will immediately alert the entire network, which can compensate accordingly.

Above all, manufacturers wanting to compete on a global scale must align with the principles of Industry 4.0 through digitisation, automation and data collection. Manufacturers failing to align with these new Industry 4.0 principles risk being left behind. A fully integrated digital supply chain will open the supply network and provide visibility for everyone involved. Businesses can respond in real time, ultimately improving the experience both for the manufacturers and the customers. This supply chain ecosystem enables manufacturers to continue to evolve and adapt to meet the ever-changing demands of their customers.

For more information about Essentra Components go to

© Copyright 2006-14 Damte Ltd.