How is supply chain 4.0 affecting manufacturers? Part 2

How is supply chain 4.0 affecting manufacturers? Part 2

27 July 2017

  • Indigo Industry 4.0

Continuing our look into how supply chain 4.0 is affecting manufacturers, here is Part 2 of Eric Carter's insights into the key issues manufacturers are facing.

6. Forecasting accuracy requirements

The lead times in supply chains are getting longer all the time. Goods are being sourced and made in many different regions worldwide which in turn, has made forecasting accuracy more critical to get right. The need for manufacturers and retailers to ensure product forecasts accurate as possible is an ever present challenge. By having an accurate forecast, companies can become more agile when sourcing raw materials for the lowest prices, they can benefit from the costs associated with longer shipping lead times whilst still meeting demand and ultimately keep inventory levels as low as possible, again minimising costs.


7. Opportunity to implement ‘predictive shipping’ techniques

Although Amazon may be trademarking the concept of predictive shipping, the idea behind the approach has been in operation with manufacturers for some time where it is part of daily business as usual. Over 80% of Indigo’s customers are using techniques similar to predictive shipping, which are based on forecast data, to plan production and shipping cycles and meet demand.


8. Quality checks built into the supply chain

To ensure consistency of product quality, there is clear evidence of quality checks and inbound process checking being conducted right across the supply chain at each stage. Manufacturers and brand owners are moving the onus for ensuring quality to their suppliers and putting systems in place to give them full visibility as inventory control and quality checks are being completed in a standardised way. This is happening in real time so that by the time goods leave the warehouse for the end customer a full audit trail is available.


9. Requirement for accuracy

Accuracy is the single most important aspect of supply chain 4.0 to get right because the vast majority of warehouses are measured by their ability to get OTIF (on time in full) or OIFOT (order in full on time), with no margin for errors.


10. Arrival of automation

Introducing automation into the warehouse is essential for cost reduction. Full automation may be on the horizon for larger manufacturers but the vast majority of companies are taking a partial approach. This ensures they can maintain greater levels of flexibility and also helps to reduce the level of capital expenditure required. Many of the efficiency and accuracy benefits that come with automation can still be seen when conveyors and cardex systems that have been integrated with a WMS, are added to control stock on a pickface.


Read Part 1