Starting with Supply Chain 4.0

June 18, 2019

Buzzwords like Artificial Intelligence, Machine Learning, Augmented Reality, Blockchain and Prescriptive Analytics are all out there and creating lot of fuss. It might be difficult to connect these buzzwords with the industry you work with and understand how to move from as-is situation to 4.0.

Turning a Big Ship. Where to start?

Coming from Supply Chain and having worked for a major conglomerate as a Data Analyst has made me understand that majority of industries are still very far from 4.0. and It is extremely difficult for most companies to turn direction and step out from their current routine.

Industry 3.0 in Supply Chain meant practical use of IT. Buzzwords back then where MRP, ERP and the main aim was using new ways to share and receive information. Table calculation tools, such as Excel helped to master data analyses.

Start visualising your endgame, and focus on certain strategic goals.

How the life of Supply Chain Manager looks like after implementing SCM 4.0?

When it comes to Supply Chain 4.0 then Supply Chain Manager should imagine itself as flight controller in the control tower. All the information from internal and external sources is always on hand, visually presented and trustworthy. This information supports faster and smarter (Big Data based) decision making.

Immediate response system is in place and system itself runs autonomously. Need to interfere with the system’s work should be minimal.

Best part of it is that when the Supply Chain Manager leaves the tower, then there is no need to think about emergency procedures or deal with firefighting.

In case something exceptional occurs — there will be automatic alerts for responsible persons in place, which will escalate as the situation requires.

Where to start when sight is set to run autonomous Supply Chain 4.0?

I would recommend the following practical list:

1. Analyse the as-is situation. Do an in depth analysis of data sources, IT systems/tools, communication methods & IT infrastructure.

2. Understand business needs, strategic decision making regards the steps that need to be taken and set up the improvement budget.

3. Invest in a Data warehouse or Data lake or a combination of both. These help to work with data and enable good use of BI tools.

4. Set up visual dashboards using single point of truth.

5. Map business critical external conditions, which affect your business and connect these with internal data.

6. Create full visibility throughout the entire network.

7. Work out resilience models to balance fluctuations and manage risks.

8. Build ML logic to analyse and move from descriptive to predictive and eventually prescriptive analytics.

Any company, no matter how mature, can become a Industry 4.0 role model. Bringing in external knowledge and using current Data and IT systems can throw your company to new heights.

You don’t have to become a Data Scientist, instead envision yourself in the Control Tower and think about the brighter future with less firefighting and no more sleepless nights.

Tarmo Saidla is Head of Supply Chain Excellence at Neurisium. He is responsible for Supply Chain Business Strategies and helps Customers to implement Industry 4.0 standards across the whole Value Chain. He uses both Supply Chain Expertise and Data Analytics skills to provide real value for Customers.

Feel free to also check out our other posts:

Digitalisation: Making Your Data Tell the Truth

Leveraging Past Data on the Production Line