Supply Chain 4.0

Supply Chain 4.0: Smart, quick and unconventional

Supply Chain 4.0 as a key differen tiator

The tremendous potential of Supply Chain 4.0 derives from Industry 4.0, the Fourth Industrial Revolution. A transformation in production and automation was brought on first by steam and water power (Industry 1.0), then by electrification (2.0) and, more recently, by the digital computer (3.0). Supply Chain 4.0 is about companies orienting themselves to the customer through e-commerce, digital marketing, social media, and customer experience.

It is part of Industry 4.0 where, ultimately, virtually every aspect of business will be transformed through the vertical integration of research and development, manufacturing, marketing and sales, and other internal operations, and new business models based on these advances.

In effect, we are evolving towards a complete digital ecosystem. This ecosystem will be based on the full implementation of a wide range of digital technologies – the cloud, big data, the Internet of things, 3D printing, augmented reality, and others.
Together, they are enabling new business models, the digitisation of products and services, and integration of every link in a company’s value chain.

Supply Chain 4.0 is key to the operations of every company that manufactures or distributes anything. Indeed, for many companies, the supply chain is the business. It extends the vertical integration of all corporate functions to the horizontal dimension, knitting together relevant players – the suppliers of raw materials and parts, the production process itself, warehouses and distributors of finished products, and, finally, the customer – through a network of sensors and social technologies, overseen via a central control hub, and managed through an overarching data analytics engine.

Driving the transformation to the smart supply chain are two tightly intertwined trends. The first is the emergence of new technologies like big data analytics, the cloud, and the Internet of things.

The second trend is growing investment in Smart Supply Chain. Companies across industries are already investing heavily to develop their own versions of Supply Chain 4.0. According to a PwC study on the rise of Industry 4.0, a third of more than 2,000 respondents say that their companies have started to digitise their supply chains, and 72% expect to start digitisation within the next five years.1

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