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In the article Benefits of a Smart Supply Chain, the author introduces the concept of big data being used advantageously in a manufacturer’s supply chain.  Big data analytics is widely accepted as a superior way for manufacturers to predict demand and understand customers, but big data analytics can also be used on the warehouse floor to save money.  The smart factory concept is one in which the entire manufacturing area is connected by sensors via the IoTs.    In the supply chain, big data is allowing manufacturers to predict bottlenecks, avoid machine failure, and reduce replacement part inventory via predictive analytics.  This Industry 4.0 holds the key to manufacturers staying competitive in a global marketplace.

The concept of Industry 4.0, run by smart factories, was actually introduced in Europe as recently as a few years ago.  To stay competitive in the global marketplace, manufacturers will have to adapt at least in some way to this new Industry 4.0.  Interestingly, a recent study indicated that 92% of manufacturers in the UK do not understand Industry 4.0 processes, but 59% of manufactures recognize the impact these new processes will have on the sector.  Using the UK as a representative sample, it certainly appears that the manufacturing industry as a whole needs to technologically transform and educated itself.  Those who stay ahead of the curve will reap the benefits of more efficient, smarter processes, while those who do not risk losing money.

The specifics of Industry 4.0 includes the big data analytics to design a smart supply chain.  A smart supply chain can avoid many of the traditional supply chain problems such as supply bottlenecks and machine downtime.  Bottlenecks can be avoided due to the fact that a connected factory shares data with other parts of the supply chain so production can be eased or intensified based on data from the factor combined with data from down the supply chain.  Furthermore, a smart supply chain can use predictive analytics to shutdown equipment and processes before the fail.  In this case, there is less downtime.  The sensors on these processes can be programmed to monitor equipment and order parts prior to equipment failure so that excess replacement inventory is not need thus saving money.  With all of these advantages, the smart supply chain managers will invest in the smart supply chain to keep their manufacturing processes ahead of the curve an competitive in a global environment.

What will need to happen to educate those in power at manufacturing companies so that the transition to smart processes happens?

Will these smart processes create or destroy jobs?

Will they transformation to a smart factory decrease or reverse the decay in the manufacturing industry as a whole?