For two years, global disruptions have heavily influenced supply chain management. As more workers reach retirement age, for instance, labor shortages increase, requiring companies to rethink how to compensate and distribute labor. At the same time, the trend toward e-commerce has raised customer expectations, with more consumers demanding faster delivery times. To keep up with these trends, supply chains need to become faster, more granular and more precise. Digitization offers one solution, allowing companies to meet changing expectations and remain efficient amidst disruption.

While no company can guarantee a “future-proof” supply chain, businesses can use technology to prepare for disruptions before they occur, and minimize the impact of those events on the bottom line. One way some businesses are staying on top of the competition is by implementing digitization in the manufacturing and logistics sectors. Companies that are ahead of the game, however, understand that technology alone is only a partial solution to a complex challenge, and that a collaboration of humans and machines will prove most effective for the supply chains of the future.

Supply Chain 4.0

Supply Chain 4.0 — the application of the Internet of Things (IoT), advanced robotics and advanced analytics in supply chain management — is how many companies today are responding to disruption in the supply chain. These technologies, when effectively integrated, can significantly improve a company’s processes. 

Supply Chain 4.0 is fast, flexible, granular, accurate and efficient. Real-time planning, which Supply Chain 4.0 promotes, enables flexible responses to changing supply and demand. But it also separates humans and machines, relying heavily on automation and less and less on human decision-making. 

Some visionaries are predicting a Fifth Industrial Revolution: a reconciliation between humans and machines. Could we benefit more from this kind of integrative approach? This is what Supply Chain 5.0 speculates.

Supply Chain 5.0

Supply Chain 5.0 caters to the hyper-personalization and hyper-customization of customer needs, which requires the right mix of human creativity and machine efficiency. While machines take on the laborious work, humans can focus on creative tasks and cognitive problem-solving.

 Robots in the manufacturing space are often used for repetitive tasks, streamlining the overall assembly workflow. The use of robots in that sense is extremely valuable for manufacturers trying to maintain both product standards and a high production volume. What robots cannot do is work personally with customers who need extra help and guidance. This is where the human element becomes invaluable. More importantly, the collaboration between humans and machines can enable the flexibility and efficiency necessary to achieve resilience in a changing world.

Implementing a Collaborative Supply Chain

The hybrid human–machine model of Supply Chain 5.0 helps companies withstand disruption without compromising competitiveness or profitability. To build resilience into your supply chain without changing personnel or asking your customers or suppliers to change their processes, digitization and human collaboration are key. Start with these best practices:

• Automate data capturing and management. Manual data entry is time-consuming, error-prone, and rarely up-to-date. This is where automation can play a significant role in Supply Chain 5.0. Digital data management allows companies to collect more robust data and analyze it in real time, all without wasting valuable labor on this essential task. Accurate data is critical for workflow automation, reporting and artificial intelligence.
• Collaborate on process optimization. Many companies have implemented an integrated planning process, but often this is done in silos. Ensure that each sector of a business has updated insight into what the other sectors are doing and why. Digitization can make real-time information easy to access across an organization, so that every department can stay up-to-date and build on solutions together. By collaborating in this way, everyone in the company benefits.

• Start small and scale up. Empower the employees who have the deepest understanding of the company’s goals to take on mentoring positions. Give them the materials and the power to evangelize the corporate mission in an understandable way. Over time, more employees will have learned from their personal guidance and pass on that information to the next wave of new hires.

Supply Chain 5.0 will use data to reap the business benefits of a human–machine relationship. You don’t have to make big, risky investments. Start small and prove value with quick, simple wins. 

Ray Grady is president and chief executive officer of Conexiom.