The gradual shift towards Industry 4.0 fulfills the promise of greater flexibility and autonomy for organizations seeking productivity. These companies are investing in new tools to digitize and automate their production means. Big Data, smart devices and artificial intelligence are introduced at every level of the production chain. With one exception... Despite the considerable progress made over the past few years in the industry, the supply chain seems to be lagging behind. According to a report published in early 2018 by DHL, the supply chain is still struggling to fit into the efforts organizations put in for their digital transformation. According to the logistics market leader, 95% of respondents still have to realize the full potential of Industry 4.0.
Stakes and challenges
The digital transformation of a value chain cannot be stronger than its weakest link. Therefore, it is important for organizations to enforce Industry 4.0 principles at all levels of their production chain, including inventory and, by extension, purchasing management. It is time for them to reshape their supply chain management model.
With the rise of new technologies, the Purchasing function is more and more often considered as a strategic function. Companies are more likely to consider the life cycle of products as a whole, rather than just their purchase price; this is called strategic sourcing. This new structure of the Purchasing function reflects the increasingly volatile nature of demand. Now more than ever, consumers are looking for unique, customizable products. In this context, the flexibility of the production chain, and by extension of the supply chain, has become a real competitiveness issue.
Digital transformation offers companies new opportunities in terms of inventory management, reduced production costs or time savings, among other things. Thanks to an optimal combination of solutions inspired by Industry 4.0 (smart devices, IoT, field data collection and analysis...), organizations can now put their customers at the heart of the supply chain by adapting production flows to their needs. In other words, the adoption of a new strategy of supply chain digitization is now a necessary step towards understanding the growing technological landscape, reaping the benefits, and strengthening its competitive advantage.
Predictive maintenance and Supply Chain
Traditionally, the supply chain is organized in a linear and sequential way, but with the rise of Industry 4.0 and the rationalization of the Purchasing function, supply chains are becoming increasingly dynamic and interconnected. Industries are now witnessing the emergence of a "Supply Chain 4.0", whose management is aligned with the company's just-in-time production standards.
Once relying to the Purchasing or Production functions, the supply chain is now organized as an autonomous entity. From suppliers to customers, decisions about inventory, costs and customer relations are no longer made in isolation, but through a global view of the production chain.
Like industrial maintenance, there is currently a paradigm shift in the supply chain. By exploiting the full potential of new technologies and mass data analysis, it is now possible to integrate the notion of "predictive", or forecasting, into the supply chain. Predictive analysis, based in particular on mass data collected at the foot of the equipment using a new generation CMMS, aims to anticipate needs and thus asserts itself as a real tool to support decision-making. In other words, operations are triggered according to the real needs of the production chain and no longer by a defined schedule
This is achieved through:
- The use of SaaS software, such as Mobility Work Suppliers, the first platform dedicated to the relationship between suppliers and customers;
- The automation of the most common interventions, for example using the CMMS Mobility Work planning tool;
- The use of collaborative tools by the company's departments;
- The use of analytics solutions to make the best use of company data.
What are the benefits for the organization?
By making supply chain the next step in their digital transformation, companies are tackling three main points of the business: communication between the various functions of the organization, costs and inventory levels, as well as supplier relations.
Communication and flexibility
While easing data collection and analysis, the introduction of Industry 4.0 tools help breaking down silos within the company, which according to 78% of DHL survey respondents are one of the most significant barriers to the digital transformation.
Thus, the digitalization of the supply chain allows greater transparency and better collaboration between departments, but also better fluidity between production, distribution functions and the supply chain. Teams are no longer attached to a fixed station and become even more flexible, more mobile.
Moreover, the predictive analysis of data along the production chain helps understand more easily and more quickly the needs of both maintenance teams and customers. Indeed, based on the results of these analysis, maintenance experts can use their next-gen CMMS tool to report their actual needs in spare parts, for example, to the Purchasing function. Together, the various actors of the supply chain are now able to define a real-time procurement planning in order to respond to changes in supply and demand, while reducing downtime in the production chain.
Costs and inventory optimization
Increasing transparency and flexibility in the supply chain also makes it possible to rationalize inventory management and thus optimize associated costs. By using data collected by the smart sensors, for example, supply chain stakeholders now have highly accurate indicators on the actual level of equipment and stocks.
When they notice a decrease in stocks, maintenance teams even have the opportunity to report it directly to the teams concerned using next-gen CMMS tools such as Mobility Work collaborative maintenance management platform. No more unnecessary purchases: orders are made according to the production rate, they are triggered by operators according to their own needs, according to inventory levels and no longer to a defined planning. By reducing purchasing volume and optimizing inventory costs, the organization is able to reduce its overall operating costs.
In addition, thanks to predictive analysis, managers can closely monitor the efficiency of the processes in place within the company, and in the long-term opt for the automation of defined tasks with low added-value (by democratizing first-level maintenance interventions among production operators), thus limiting employment costs and improving supply chain productivity.
Better suppliers relationships
Increased flexibility and reduced costs are not the only benefits of supply chain digital transformation. When an organization moves away from a linear approach of the supply chain, the whole model as well as the relationships between stakeholders are deeply changed.
When it comes to the successful deployment of a predictive maintenance program, anticipating failures and breakdowns is not enough; inventory and spare parts management play a huge role in predictive maintenance. The implementation of industrial maintenance plans should also be coordinated on a logistical and organizational level. In this regard, emerging solutions such as Mobility Work Suppliers help remodelling the relationships between customers and suppliers.
Mobility Work Suppliers is the first platform dedicated to manufacturers and suppliers of industrial consumables. With Mobility Work Suppliers, they can promote their products directly among a targeted audience of maintenance experts. Nothing could be easier: after creating their company profile, suppliers upload their official product catalogue on the platform and add all useful information and documentation.
Product sheets are then showcased in the search results of Mobility Work next-gen CMMS. Mobility Work CMMS users can easily duplicate these data in their equipment or directly contact the manufacturer of their choice. As for suppliers, they receive reports on customer data, that help tailor their products and advertisement campaigns according to customers’ needs.