Why Smart Factories Are the Future of Supply Chain Resilience

A robust supply chain is crucial for manufacturing. Manufacturers must respond swiftly to adapt to market changes and withstand disruptions. Although supply chains are inherently challenging to manage, a resilient strategy can be developed to navigate through these difficulties.

4IR technologies are significantly reshaping manufacturing on a large scale. This transformation extends across industries, enabling benefits to propagate through supply chains. To address these changes effectively, it’s crucial to recognize and tackle key challenges:

• Lack of visibility
• Dependence on limited suppliers
• Inefficient inventory management
• Lack of collaborative management
• Data management and analysis
• Limited flexibility

By leveraging 4IR technologies, some challenges can be directly resolved, while others require strategic management. This blog outlines essential solutions to enhance supply chain resilience and operational management during disruptions.

Diversification Through the Chains

Manufacturers must always manage logistics and supply on two ends: input and output. Both involve complex supply chains that are dependent on external partners. A resilient supply chain consists of diversification in material and service suppliers.

While managing them will require a solution, diversification will help create a multi-path, multi-redundancy-based supply, and delivery strategy. The diversification should consider a healthy mix and approximation of scenarios and ensure necessary supply and delivery in each.

Visibility Through the Cloud

Diversification adds complexity to a system that relies on multiple variables. However, technology, especially cloud computing, can aid in controlling variability while supporting diversification. Cloud technologies serve as the foundation for management systems and facilitate the integration of data from the supply chain. This, in turn, enables the necessary visibility and monitoring capabilities for the supply chain.

Management systems can be built on these data streams to achieve higher coordination and real-time management of inventory, stock, procurement, logistics, and vendors. Manufacturers transitioning to smart infrastructure and data technologies can leverage these advancements for supply chain management with minimal extra effort.

Demand Forecasting and Predictive Analytics

With available and real-time data, advanced analytics can be performed to enable demand forecasting and predictive analytics on multiple levels. It can help manage machinery, equipment, and vehicles; monitor inventory, vendor supply, and logistics; and perform broader level forecasting to manage overall supply, stock, and delivery. 

More can be achieved if these analytical and data systems can be coupled with AI/ML, another long-term goal of manufacturing in the Fourth Industrial Revolution. AI and machine learning can help improve the output and insights of supply chain analytics and support them with automation. 

Digital Coupling

With analytics and AI at our disposal, every process and unit (materials, goods, products, etc.) can be coupled with a ‘digital twin’ within the system. This coupling with real-world, real-time data can help manufacturers run scenario-based simulations using AI and prepare mitigation strategies. The simulations can also be improved over time by the self-improving capabilities of the machine learning systems.

Digital twinning can be easily achieved if the system integrates and covers elementary units and processes throughout the supply chain. Simulations can also help automate decisions and operability by monitoring, correlating, and predicting events compared to scenarios. 

Industrial Internet of Things (IIoT)

In a smart factory, an IIoT network comprises equipment and devices that have been given unique identifiers and the capability to send and receive digital data. Even decades-old analog machines can be upgraded to bring them up to speed using IIoT gateway devices. Modern machinery may already have digital gateways. In essence, data given to the device controls and automates its actions and workflows, while data sent from the device reports its condition and activities.

Supply chain resilience in Industry 4.0 is an essential component of the manufacturing strategy. As manufacturers move towards higher digitization of production and smart, adaptable assembly lines, supply chains must be equally flexible. Supply chain disruptions are common due to natural events and geopolitical scenarios. Therefore, manufacturers need to address these disruptions through diversification and holistic management.