4th industrial revolution
In the First Industrial Revolution steam power was used to mechanize production. Electric power was used to create mass production in the Second. The Third used electronics and information technology to automate production. The Fourth Industrial Revolution is characterized by a breakthrough of technologies that is connecting the physical and digital world. It is evolving at an exponential pace and it is disrupting almost every industry in every country. The breadth and depth of these changes will lead to the transformation of entire supply chains, systems of production, management, and governance.
What we already experience is that international margin pressure and changing requirements from consumers ask for flexible and cost effective production processes and logistics. E-commerce is changing the requirements to have products in store. Products are copied swiftly after introduction, resulting in a short exclusive life time (commoditization) of products. Both trends result in orders of smaller batches of products or even unique products, which should be delivered just in time and in the shortest time possible at mass production prices.
Suppliers in the Business-to-Consumer market ask their suppliers to come up with new concepts to make this possible. Machine manufacturers are pressured to highly digitalize and modularize their setup. The new production facilities need to be able to deliver different types of products, Just In Time, in an effective and efficient way to comply with the requirements of the consumers.
Supply chain of Industry
Suppliers of materials and intermediate products (i.e. the process industry) will be asked to comply with these requirements as well. This will result in smaller batches of special grades Just In Time and for almost the same price as mass products as well.
Are you ready?
To be prepared for these new requirements, your industrial setup has to be highly digitalized and flexible. This starts with all the basic processes automated and all relevant data of your product and production equipment readily available in a Manufacturing Execution System. The next step is to fully integrate your Manufacturing Execution System with your Enterprise Resource System. Only then you will be able to comply to the Just in Time delivery requirements of the industrial supply chain. If some of these processes are still not digitalized or integrated, you will not be ready for the 4th industrial revolution. Then the question is how and where to start first….
For more information or help please contact STB solutions.