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Logistics 4.0: The Digitalization of Supply Chain Management

Remember when we talked about the blockchain? If you don’t, remember to check out our entry on what’s the blockchain and how it’s shaping the logistics industry. As you can see, this game-changing innovation is just a small part of a bigger and more complex technological revolution that is taking place in the supply chain industry. In logistics, where assets must get from point A to B in no time, we can think of various contributions, such as cloud computing, robotics, drones, smart warehouses, and self-driving transportation.

Starting with the development of the steam engine and machine tools, the industrial revolution has gradually introduced new technological advances along with networking tendencies that allow to facilitate manufacturing and supply chain processes. This brings us to the fourth Industrial Revolution, also known as Industry 4.0. Including the introduction of Internet of Things (IoT) and blockchain, such concept incorporates communication technologies and the development of information in times of fast manufacturing cycles and constant-growing markets. Over the past decade, a higher demand for technological innovation in the transparency, monitoring, and customer service has called for the logistics industry to adapt to such changing environment.

So how does Industry 4.0 influence on the supply chain processes? According to an article by i-SCOOP, “to meet the demands and decentralization behind Industry 4.0, however, an automated, intelligent and increasingly autonomous flow of assets, goods, materials and information between the point of origin and the point of consumption and the various points in-between is key.” This means that the intelligence not only depends on the human factor, but also on an autonomous system that allows the logistics workflow to operate in a more efficient and connected way.

Just take a look at the automotive industry, which has adopted new technological tendencies within its production processes through better monitoring systems, the power of customization of products, and interconnection. In the part of supply chain, OEMs and suppliers are facing changing standards and regulations that require a networked and adaptable system that is able to respond quickly. BMW Group’s board member for production, Oliver Zipse, once noted the company’s huge flow that the supply chain must be able to sustain. With 30m parts per day that move from 1,800 suppliers and 7,000 sea freight containers per day, the planning of this product flow has aimed to be even more transparent and autonomous. Some of their innovations include a private cloud for effective track-and-trace, sensor-based readings to connect materials to IT platform, and even data goggles.

Even though a big part of these technological innovations may seem a bit far away, some elements are starting to take place through a step-by-step process. Certainly, this technological jump may not be completely evident today, but we can expect it to gradually start boosting supply chain operations all over the world in a way that logistics will adopt the fastest and safest workflow strategies and make them a reality.

 

Sources:

Ludwig, C. (2016, December 22) BMW’s ‘connected’ logistics:Shapgin a self-steering supply chain. Retrieved from: https://automotivelogistics.media/intelligence/bmw-shaping-self-steering-supply-chain

Masters, K. (2017, February 21) The impact of Industry 4.0 on the automotive industry. Retrieved from: https://blog.flexis.com/the-impact-of-industry-4.0-on-the-automotive-industry

i-SCOOP. Logistics 4.0 and smart supply chain management in Industry 4.0. Retrieved from: https://www.i-scoop.eu/industry-4-0/supply-chain-management-scm-logistics/