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Industry 4.0: How Supply Chain Leaders Are Adapting

From boardrooms and shareholder meetings to conferences and collaboration circles, it seems everyone is talking about the fourth Industrial Revolution (i4.0).

Manufacturing executives are increasingly challenged to evolve to remain competitive in this age of rapid technological disruption. Depending on whom you talk to, the disruption for value chains, employees and business models may be fundamental.

In this environment, it is critical for executives at manufacturing companies to separate hype from reality in order to effectively prioritize their business initiatives. They need a clear picture of the current risks and opportunities and they need to understand what their peers and competitors are doing to drive value and capture competitive advantage.

While most manufacturers are certainly investing into i4.0 capabilities and technologies, few have achieved the scale and integration required to drive enterprise value from i4.0. There are many working towards creating the “factory of the future” or going beyond to evolve to a “digital enterprise,” but none have yet to achieve consistent application of those capabilities across all of the corners of their operations. Most are still experimenting with discrete pilots or trialing point solutions. Some have yet to start developing their roadmap for integrating i4.0 into their business and operating models.

Supply Chain: Enhancing i4.0 Value

After years of struggling to improve integration and coordination across the value chain, many manufacturers clearly see i4.0 as a potential solution to some of their more persistent supply chain challenges. Indeed, a fully integrated i4.0 environment could help manufacturers to remove significant friction from their increasingly complex supply chains. It could unlock improved visibility across the network and down into lower tier suppliers to better reduce risk and improve flexibility. It could enhance coordination and innovation through better access to customer and product usage data and deliver scaled yet customized product solutions. And it could deliver improved working capital flexibility by helping to lower inventory levels and sharpen forecasting. The benefits of integration can be significant.

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