Executive Briefings

Industry 4.0: The Five Steps Toward a Digital Supply Chain

If the vision of Industry 4.0 is to be realized, most enterprise processes - manufacturing, product development, customer relations, and the workplace itself - must become fully digitized. A critical element will be the arrival of the digital supply chain.

Industry 4.0: The Five Steps Toward a Digital Supply Chain

The supply chain today is a series of largely discrete, siloed steps taken through marketing, product development, manufacturing, and distribution, and finally into the hands of the customer. Digitization brings down those walls, and the chain becomes a completely integrated ecosystem that is fully transparent to all the players involved - from the suppliers of raw materials, components, and parts, to the transporters of those supplies and finished goods, and finally to the customers demanding fulfillment.

This network will depend on a number of key technologies: integrated planning and execution systems, logistics visibility, autonomous logistics, smart procurement and warehousing, spare parts management, and advanced analytics. The result will enable companies to react to disruptions in the supply chain, and even anticipate them, by fully modeling the network, creating “what-if” scenarios, and adjusting the supply chain in real time as conditions change.

The key for a successful digital transformation of the existing supply chain, and therewith reaping the full benefits of DSC, lies in developing an orderly process for implementing and integrating the many technologies and capabilities required. In our experience, companies need to take five primary steps:

1. Understand your starting position: Review your current maturity along the four stages of the maturity model and identify areas for improvement.

2. Define your strategy: Determine your target maturity level and the supply chain vision that best supports your business strategy.

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The supply chain today is a series of largely discrete, siloed steps taken through marketing, product development, manufacturing, and distribution, and finally into the hands of the customer. Digitization brings down those walls, and the chain becomes a completely integrated ecosystem that is fully transparent to all the players involved - from the suppliers of raw materials, components, and parts, to the transporters of those supplies and finished goods, and finally to the customers demanding fulfillment.

This network will depend on a number of key technologies: integrated planning and execution systems, logistics visibility, autonomous logistics, smart procurement and warehousing, spare parts management, and advanced analytics. The result will enable companies to react to disruptions in the supply chain, and even anticipate them, by fully modeling the network, creating “what-if” scenarios, and adjusting the supply chain in real time as conditions change.

The key for a successful digital transformation of the existing supply chain, and therewith reaping the full benefits of DSC, lies in developing an orderly process for implementing and integrating the many technologies and capabilities required. In our experience, companies need to take five primary steps:

1. Understand your starting position: Review your current maturity along the four stages of the maturity model and identify areas for improvement.

2. Define your strategy: Determine your target maturity level and the supply chain vision that best supports your business strategy.

Read Full Article

Industry 4.0: The Five Steps Toward a Digital Supply Chain