When it comes to the manufacturing sector, managing stocks is the real big deal. In fact, fines can rise as much as $4,000 per minute for automotive trading partners whose late delivery causes a delay in production. This is the reason why most companies host massive inventory warehouses, with the subsequent costs attached.
Steve Banker, Vice President of Supply Chain Services at ARC Advisory Group, is clear about the solution: smarter robuster optimization software. As incredible as it may seem, the industry is yet to fully embrace internet-of-things (IoT) to leverage stock and production, something fairly understandable considering the macro-structure and logistics involved.
Now imagine a massive IoT solution which is machine-to-machine (M2M) focussed on increasing productivity while saving energy thanks to predictive consumption. Or imagine an RFID solution that allows you to locate stock in extensive automotive lots with really little battery. Technology is definitely ready for this. In fact, the last example was a real solution participating in The Collider’s first edition.
We have seen the rise of smart homes, with new funky devices coming out everyday. Now you can switch all lights from your phone, turn on the heating while on your way from work and ask Alexa to pick up a movie for your Saturday night. The automated house is a reality – and it works. It was about time that this solutions took over the industry by storm.
The smart factory is the result of the fourth industrial revolution, also known as Industry 4.0.
The Industry 4.0 has already made a huge impact in terms of advanced planning and scheduling for real-time processes in manufacturing. However, a real smart factory takes automation to its full extent, taking manual intervention to a minimal expression. According to Deloitte, the uniqueness of a smart factory comes down to 5 key characteristics:
- CONNECTED: end-to-end straight collaboration, between both internal actors (departments) and external ones (suppliers, clients).
- OPTIMIZED: efficient production streamline minimizing quality costs with little human intervention.
- TRANSPARENT: any data collected is real-time, from stocks to demand or tracking orders enabling consistent decision-making.
- PROACTIVE: quality and quantitative issues are addressed immediately by safe and efficient monitoring.
- AGILE: flexible and adaptable; open to testing and quick iterations.
Following the footsteps of the first, second and third industrial revolutions (mechanization, mass production and computation), the Industry 4.0 appears to be as daunting as promising. It is changing the status-quo, shifting the workforce and enforcing a whole new relation between stakeholders. Moreover, it is pushing the industry to a more environmentally conscious position. It may take more or lesser time to settle in but the trend is irreversible.