How has Industry 4.0 impacted the supply chain network?
Author : Scott Fawcett, Divisional Managing Director, Essentra Components
14 May 2018
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Essentra Components is at the beginning of its Industry 4.0 journey, taking its first steps as a company on the I4.0 evolution, but there are still plenty of opportunities for development. A connected and digitised supply chain will offer a new degree of resiliency and responsiveness, driving competition in the market but there is no quick fix to investing in the digitisation of the supply chain network; it is a long-term investment.
Digitisation, automation and data collection are key characteristics that define the fourth industrial revolution. More commonly known as Industry 4.0, the fourth industrial revolution is the one of the most radical transitions in the manufacturing industry to date. The transition towards smart planning, smart machines and smart data has accelerated production and efficiency to new levels. One of the best examples of the benefits this improved efficiency can have is in the supply chain ecosystem. Through the installation of a digitised and fully integrated supply chain network, companies are able to make huge strides in customer service, flexibility, efficiency and cost reduction.
Evolution of the supply chain
According to a recent study by Pricewaterhouse Coopers (PwC) on the rise of Industry 4.0 , a third of companies surveyed have already started to digitise their supply chains and 72 percent 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 percent, while boosting revenue by 2.6 percent a year.
A critical element of this transition will be the evolution of traditional supply chains, towards a more connected, smart and highly efficient supply chain ecosystem. However, this transition to a digitised network will require integrated planning and execution systems, logistics visibility, autonomous logistics, smart procurement and warehousing, spare parts management and advanced analytics. Though not a small undertaking logistically or financially it is clear that manufacturers that embark on this change will reap the benefits.
Efficiency savings
Digitisation allows manufacturers to bring their supply chain ‘online’, allowing their entire end-to-end service to become completely integrated and fully transparent to all participating stakeholders and suppliers. For example, smart planning enables Essentra Components to take customer orders via the e-commerce sites, which feeds into various integrated software platforms and look at and monitor demand planning, process optimisation and production planning.
The creation of smart machines, linked to each other and to the cloud, ultimately speeds up set up times and installation processes, driving efficiencies in production whilst also reducing costs. By linking these smart machines to the cloud, process engineers are able to access machines remotely, diagnosing and resolving problems more quickly, ultimately ensuring the machines are back up and running in the shortest time possible. The quick exchange of information boosts the agility and responsivity of the entire chain.
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Essentra Components’ journey
Essentra Components is at the beginning of its Industry 4.0 journey taking its first steps as a company on its Industry 4.0 evolution, but there are still plenty of opportunities for development. Only, five years ago the company had 300 machines producing 1.5 million mouldings a day. Today, there are 120 machines producing 3.7 million components a day from the Kidlington site. In addition, SO99 demand planning platform has been live in the EMEAs for two years and will soon be launched in the Americas. This is an aggregated global demand plan for internal vendors, providing visibility across the business, response to customers and ultimately a more efficient and dynamic manufacturing footprint. Developments like these have made a huge difference to the company’s efficiency levels.
Essentra Components is also incorporating digitisation and connectivity in to its supply chain, for example, using TW Pick and Pack, warehouse management software. This was a £150,000 investment implemented directly to drive efficiency in pick and delivery accuracy. Digitising the supply chain provides better access to warehouse activity data, strong management information and increased productivity. This year, the company plans to introduce improved location management to reduce the delta between available and picked product.
Drive in responsiveness and resiliency
A connected and digitised supply chain will offer a new degree of resiliency and responsiveness driving competition in the market. Companies are increasingly transforming their processes to provide customers with the most efficient and transparent service. Manufacturers wanting to compete on a global scale must begin implementing a digitised supply chain ecosystem. There is no quick fix to investing in the digitisation of the supply chain network; it is a long-term investment which will pay dividends to the company once successfully implemented for many years to come.
For more information about Essentra Components go to http://www.essentracomponents.com/en-gb.
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