TRANSFORMATION OF THE SUPPLY CHAIN
we are presented with an evolution of mass production, where goods are tailored to the individual at mass production prices. In the car industry for example, while some parts are common, a consumer can configure their vehicle outside and in; getting it delivered in exactly the same time as a standard model.
In the near future, machines could be programmed to build bespoke products from scratch – products that meet exactly their specific needs. Say a manufacturing director needs a very specific spare to repair his main production machine, he or she could simply click a button to instruct a machine to tailor the spare, which would be produced with greater precision than the original. This is not science fiction – the building blocks of this model all exist today.
As the above example shows, Industry 4.0 will completely change the nature of the manufacturing supply chain, from product design right through to customer delivery. We are only at the very beginning of the Fourth Industrial Revolution, and as it progresses, we will see that, as in any revolution, there are winners and losers. For manufacturers wishing to be on the winner’s side of this equation, there are a number of steps they can take.
Firstly, manufacturers need to change the way they view themselves. Gone are the days when manufacturers simply made products. In the Fourth Industrial Revolution, they must view themselves as product and service companies. This combination will enable businesses to offer more compelling propositions to their customers and open up new revenue streams. Such an approach is enabled through the technologies of Industry 4.0, such as the Internet of Things (IoT).
In IoT, products and other objects are connected to each other, to customers and to enterprises through communications chips. Meanwhile, sensors on the products gather data that can be used to improve later iterations of the product as well as form the basis of services. For example, in the past, a phone manufacturer would simply make a phone and sell it. Now, they make IoT-enabled phones and sell a range of services, movies, music and book subscriptions for example, which run on the device. All manufacturers in the future will need to create products that enable services. The more advanced these services are, the more willing will customers be to pay for them.
As a result, the focus of investment for manufacturers today needs to be on how they can digitise their products and business models, starting with the supply chain. This transformation encompasses a number of different elements, from enabling a single real-time view of product development and delivery right through to the integration of mechatronics and software into products, so that manufacturers can deliver services to their customers. After all, those companies that can create only products, but not the ecosystems around them, will be in trouble.
Whether you love it or hate it, Industry 4.0 is already in full effect. Some didn’t notice the transition — it was slow and subtle, after all. It’s a trend that’s marked by widespread industrial automation, the rise of high-bandwidth mobile networks and the development of the Internet of Things.
One technology in particular — blockchain — is generating a lot of buzz among IT pros and enthusiasts alike. It’s been in the news lately due to its connection with cryptocurrency, including the controversial and volatile bitcoin. However, different iterations and applications of blockchain have pertinent uses elsewhere including Industry 4.0.
According to recent stats, almost 60 per cent of companies stationed in consumer products and manufacturing deployed a blockchain solution by the end of last year. Although the fundamental technology behind the blockchain remains the same, it serves a different function when used in an industrial setting.