A supply chain is the whole process of an item being ready from its raw form to the end-stage when it reaches the consumer. Procurement, operations management, and the delivery of the goods are the activities that are consisted in the supply chain. One must be wondering why it is called a ‘chain’ anyway. The whole activity takes place in an order which was called the supply chain because to reach the results the order must be followed and hence the chain is as it is. No step can be skipped in this whole process. For example, person A in Location Z has ordered a piece of cotton cloth and so in location Y, we have the raw cotton being sent to a factory nearby where there is the whole process of manufacturing going on to make the piece of cloth. This is then transported from location Y to Z so that the result is reached to the consumer who has ordered this particular item. This whole process of the raw material is taken from the field to the result being transported to person A in location Z is the supply chain and there is always someone making sure that when the chain only stops at the endpoint. This process of looking after the whole process is Supply Chain Management.
Industrial Revolutions so Far
Bringing transparency to the Supply chain management is digitizing the supply chain and this is part of the Industry Revolution 4.0 or Business 4.0. To understand this, we need to go back to the other three revolutions to understand why they took place and what their purpose was. The First Industrial Revolution was to mechanize the whole manufacturing process. This led to mass-scale manufacturing and hence was the rise of steam engines. Before the Industrial Revolution, life was centered on farming and agriculture and with this revolution, the societies turned into urbanization. This was the age of the rise of the working middle class that was cheap labor with inhumane working hours and in a bulk.
Then came the second Industrial Revolution that is Industry 2.0, the age of Science. With this revolution, the engines were no more limited to steams but moved to gasoline, steam railways were taken over by airplanes by those who could afford them. In short, life was taking speed with the innovations happening around. Urbanization was no longer an option, it became the way of life with the ever speeding life around them. The second revolution saw the emergence of the modern man with the invention of the radio, electric lights, the telephone, and other ways of life that changed the living standards completely.
Following the second revolution was Industry 3.0 which was the Digital Revolution. The world started getting digitized. Beginning in 1950 we saw the eagerness of the inventions of modern technology and so was mainframe computing, the Internet, and personal computing. There was a shift from analog electronic to mechanical and digital and so started the era of Globalization. The world was no longer waiting for papers to arrive from one country to another to make a move, it was all in a click and there we were, making worldly decisions based on instant communication. Electronics and the IT world began to systematize production and take over the supply chains globally.
Industry 4.0/Business 4.0
So, when the world invented machines to simplify life and do the work mechanically we called it the First Revolution, applying to make mass production was the Second Revolution, automating the process and the global presence and the emergence of the robot world is the Third revolution. The Fourth Revolution is curative of all these, we have used robotic technology to automate repeated work hence removing unnecessary manpower. The four business basic pillars of this revolution are as below:
- Customizing the applications or modifying its way of working to stand upright on the customer requirements.
- Accepting risk and challenges.
- Exponential progress.
- Using several technological platforms at once to come up with a single function to leverage jobs and utility.
The technological pillars are – agility, automation, innovation, and cloud computing. The implementation of these pillars in terms of technology and business ideas will help a company grow and survive in this world that changes itself every 24 hours.
Digitizing the Supply Chain and Why is it Needed
At the beginning of this article, we saw the example of the journey of raw cotton to the finished product of being a piece of cotton cloth. This whole process of supervising or managing would be very simple if we digitized the way it was taking place. It would simply add to efficiency. The whole idea of a digital ecosystem is to bring in all the existing industries under one roof. It is an important task but equally a very difficult task. To make this simpler, let us assume there is a company called ABC and it has got its branches in 13 different countries. Now bringing and merging the data of these 13 branches under one cloud can make it easy for the company to track the logistics, the consumer demand and also check for availability at one click.
This sounds easy for a single company but when it comes to creating a digital ecosystem we are thinking of all the companies possible to be equally accessible and operative. When weaving these companies together one needs to make sure that there are no data silos as this can create a major problem when arises in terms of transparency. Because when the arrangement, procuring, and manufacturing departments are made to work in such silos, there is miscommunication, and work gets delayed or the result is messed up.
Artificial Intelligence and its Role in Digitization
This global technology movement that is taking place in our presence is nothing but the need of the hour. With AI being the go-to tech for all possible issues at the moment, it is the go-to tech when it comes to digitization. A small aid manually goes a long way but if AI can make this small aid multiply and come off as one big aid then the time taken will be much less and impact more evident
However one must not forget that even though we are living in the automation era but is the relationships that matter the most and it is the human effort and ideas that go into the success of a technology. We need to walk hand in hand and not completely put our money on the ever-evolving technologies. To conclude, transparent and technologically better-performing supply chain management will not only bring in better opportunities within the chain but also across companies and will work towards building a better relationship between companies.
