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3 Reasons Why Supply Chain Professionals Are Excited About Industry 4.0

The Industry 4.0 revolution is firmly under way. And it’s something for supply chain professionals to be excited about.

Over 200 years ago, the first industrial revolution was ushered in by the roar of the steam engine. Now, thanks to advances in automation and computerisation, a new revolution is underway – Industry 4.0.

Also known as the fourth manufacturing revolution, Industry 4.0 marks the convergence of physical and digital manufacturing capabilities to create “smart factories.”

These factories empower supply chain professionals and manufacturers to digitally plan and project the entire production lifecycle. This can help to increase efficiency, minimise risks and, ultimately, drive revenues.

In fact, 35 per cent of companies adopting Industry 4.0 technologies expect to generate revenue gains of more than 20 per cent over the next five years

Picking Up Steam

The revolution is already well underway in countries with large manufacturing footprints, such as the United States, Germany and Japan.

However, now it’s starting to pick up steam around the globe. That’s because more companies want to take advantage of the tremendous business opportunity presented by Industry 4.0 adoption.

So what specific Industry 4.0 technologies have the supply chain so excited? Here are the top three:

Predictive Maintenance

Big data is playing a big role in the revolution. Predictive maintenance is one example of how it is being used.

Within smart factories, sensors are installed on every machine. These sensors produce data that can be used to accurately monitor key performance parameters. This knowledge is used to assess the probability of machine failure while allowing stakeholders to prepare accordingly.

The manufacturing personnel in the factory, as well as the supply chain professionals who are relying on them, receive continuous, up-to-date status alerts.

Armed with this information, MRO employees can make more precise repair calculations in order to prevent non-scheduled outages. At the same time, procurement and supply chain professionals can identify potential risks well in advance, allowing them to be more responsive and agile.

Additive Manufacturing

Additive manufacturing is not a new phenomena. For decades, the process was used to prototype new products before they were put in production on factory floors.

Today, however, thanks to the improved capabilities and reduced costs associated with 3D printing, additive manufacturing is being conducted on the factory floor itself.

As a result, manufacturers in smart factories need little to no lead time to fulfil spare part requirements, and design improvements and upgrades can be made on the fly. Supplies that were previously too heavy or too cost prohibitive to ship can be created on-site, reducing costs and logistic headaches for supply chain professionals.

This expansion of additive manufacturing has reduced required inventory levels and provided procurement teams with greater flexibility than ever before.

RFID Tags

Intelligent radio frequency identification (RFID) tag technology helps supply chain professionals track the status and location of each piece of inventory throughout the entire supply chain.

This technology provides procurement teams with the peace of mind that no piece of inventory will go unaccounted for. It also improves efficiency by making it easier to find specific items, no matter where they are located within a warehouse.

Lastly, RFID can prevent products from being counterfeited by verifying the authenticity of goods and products as they move through the supply chain. This helps to combat a growing concern in the industry.

Just as it has in the United States, Germany and Japan, Industry 4.0 will revolutionise the supply chain around the globe. As it does, procurement professionals will be able to understand their operations better than ever before and be empowered to make more strategic, agile decisions.

Ed Edwards is Audience Outreach Manager at THOMASNET.com. He leverages his extensive experiences in engineering, manufacturing and procurement, to educate procurement and engineering professionals on how to streamline and improve their work.

Ed provides customised training to organisations’ engineering and sourcing teams and helps buyers with their challenges and finds them new opportunities.