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Re-imaging the Supply Chain for Industry 4.0

Saj Kumar, Vice President, Internet of Things and Digital Transformation, SAP APJ | Sept. 21, 2016
A digital supply chain delivers more than speed and efficiency. When the supply chain goes digital, manufacturers can be more customer-centric, offer customised, personalised products, and overcome resource scarcity and waste.

Reserving our Resources

Renewable energy has been a part of conversations for decades, but excessive costs mire potential solutions. The costs of manufacturing wind turbines, for example, represent only one third of the overall expenses with maintenance and operations representing the biggest portion. Automating and simplifying maintenance and operations will make these options more viable, and they are a direct result of the digital supply chain.

Consider the wind farms in the North Sea, which are becoming regular sights and powering homes nearby and far away. The average winter temperature in the North Sea is 6⁰C and wind gusts can reach 60 knots-great for windmills, but not friendly to humans. Bringing a technician onsite to fix a nonworking windmill is expensive. Sensors can track the health of the windmills and send alerts when they are at risk for downtime and humans need to intervene. Minimising these types of onsite visits and automating operations processes could greatly expand our renewable energy options in Europe and throughout the world.

Preventing Waste in the Supply Chain

The emphasis and demands on quality control and waste prevention can cripple a supply chain. Automating these processes eliminates much of the human effort that slows time to market, and it prevents or reduces waste that occurs when standard processes are not followed and guidelines are not met.

Tech Mahindra, part of Mahindra Group, launched Fresh Produce End to End Digital Supply Chain (FEEDS) - a revolutionary initiative to manage the food supply chain. This enabled companies to transport farm grown produce and deliver it as fresh as if it were grown locally. In addition to facilitating business collaboration, FEEDS also allowed for product quality and freshness to be maintained while providing a 15-20 percent reduction in losses and wastes.

Digital Supply Chains Tackle Changing Customer Demands and Global Dispersed Networks

When GTNexus surveyed business executives about supply change challenges for its State of Global Supply Chain Report, keeping up with ever-changing customer demands and orchestrating and managing a globally dispersed network of partners were their main concerns. Organisations are addressing customer demands and dispersed networks by modernising their supply chains with analytics and IoT, and the impact to the supply chain's performance will be visible sooner rather than later. In fact, IDC forecasts that IoT technologies will be materially affecting the way all companies manage their supply chains by 2020.

For many companies, digitising the supply chain may seem intimidating-too tall of a mountain to summit right now. Rather than procrastinating, keep in mind that digital transformation doesn't have to be all or nothing. The best strategy is to start with a proof of concept that aligns with the business goals and start making incremental improvements. Small, steady changes will move the digital transformation forward and connect the myriad business processes that will deliver optimal value to the customer.


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