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4 Disruptors to the Digital Supply Chain

Posted by Jason Cope, CPA on Feb 17, 2020 9:30:00 AM

Industry 4.0 has disrupted the traditional supply chain through digitization, offering ways to reduce inefficiencies, lower costs and improve customer satisfaction. The Internet of Things (IoT) and artificial intelligence (AI) continue to evolve, offering continued improvement to manufacturers. With a new decade ahead, and Industry 5.0 around the corner, it’s beneficial to examine four of the greatest disrupters to supply chain operations.

  1. AI

    AI allows manufacturers to spot patterns much more effectively than people can. That enables supply chain systems to dramatically boost efficiency. Consider the difference between machine learning and AI when it comes to gauging product demand. AI can remove complexities and predict what orders will be ahead. While AI has already disrupted the supply chain, there is much more to come as Industry 5.0 evolves

  2. Predictive Shipping

    It’s almost impossible to think of changes in shipping and customer expectations without thinking Amazon. Order a product and see it at your door the next day—or, in some cases, the very same day. In some ways, the supply chain has become the product, driven by the customer’s demand for speed and agility. Predictive analytics enables manufacturers to precisely forecast customer needs and reduce time of delivery down to the hour rather than days.

  3. IoT

    As our manufacturing accountants have addressed in previous blogs, IoT has been a game-changer when it comes to tracking items, expediting shipping and reducing loss by spotting errors. When all your devices are speaking to one another, the ability to eliminate waste is tremendous. Along with AI, IoT devices can identify bottlenecks, improve overall accuracy and expedite the shipping process.

  4. Sustainability

    Sustainable practices in the supply chain are becoming the norm. For many companies, it was financially impractical in the past, but today there are more affordable options. Sustainable supply chains include choice of packing materials and shipping containers to how items are packaged together to avoid additional costs. The old model of taking resources to make a product and disposing of the waste is well on its way out. The process has become circular, meaning all used products are recycled and reused.

    There are also opportunities to reduce digital waste. For example, if a manufacturer receives advanced notification of shipping needs but does not act on it, how can they optimize their processes? If IoT does its job of sensing a supply disruption, there is digital waste if the issue is not resolved quickly.

Related Blog: 4 Ways Supply Chain Management Can Reduce the Bullwhip Effect

Looking ahead, Industry 4.0 will move from AI and IoT to manufacturers using real-time data to enable data-driven business decisions. That means workers will be able to predict outcomes across the entire supply chain. Rather than having robots simply replace the physical tasks performed by humans, Industry 5.0 will enable those running the supply chain to focus on perceptive-driven strategic planning and analytics as well as strengthening customer relationships.

Having an advanced, digital supply chain has become a competitive necessity. Those manufacturers with advanced capabilities will have a leg up in gaining market share while delivering exceptional client service.

Do you have questions about this blog or other manufacturing and distribution topics? Our manufacturing accountants can help. Please contact Jason Cope at 214-635-2508.

Note: This content is accurate as of the date published above and is subject to change. Please seek professional advice before acting on any matter contained in this article.

 

Topics: supply chain, AI, Internet of Things