What is Supply Chain 4.0



Also known as the Next Generation Digital Supply Chain platform, Supply Chain 4.0 has the potential to truly transform your supply chain management practices. So what is Supply Chain 4.0? Simply put, it’s the amalgamation various practices in order to facilitate a smooth running ship from manufacture to distribution. Automation plays a big role in Supply Chain 4.0, including the role of robotics, use of analytics for means of improving performance and customer satisfaction.

This new trend in supply chain is the inevitable, that is the culmination of what the logistics industry has been undergoing in the last three decades.  It started off with operational functionalist which them progressed to the need for supply of production lines and delivery, and thereafter  to what became an independent supply chain management function. The focus of SCM functions have shifted  more onto the use of advanced planning and analytics processes along with operational logistics being outsourced to logistics service providers rather than having them in-house to reach higher economies of scale.

What Supply Chain 4.0 within the industry means, is that it demands that you restructure your organisation processes to factor in the new means of bettering the supply chain processes and bringing gaps between customers and suppliers.  Other factors that have led to this progression include the likes of customer expectation and also global mega trends. Customer expectations are ever flighty with on-demand gratification is the expectation and not to mention service level on par with it. Furthermore, global pressures to reduce carbon footprints and to keep socioeconomic factors in mind also factors into the need for Supply Chain 4.0.

In essence, the following image by McKinsey looks at the various factors that revolve around Supply Chain 4.0.