The Autonomous Supply Chain: The Industry 4.0 Endgame
Try to picture a world in which the supply chain is seamless.
A world where items arrive from the right supplier, in the best route, on time, appropriately stored, and issued according to an optimal production plan.
Where products are manufactured, packed, and loaded using industrial automation and robots, and shipped by autonomous vehicles or drones to the client.
Well, if you can, you essentially imagined the autonomous supply chain.
Supply chain management has always been a challenging task in the electronics manufacturing sector. Competition is fierce, margins are thin, products are complex, and volatility is the only constant. In an age of mass-customization and short product lifecycle, electronics manufacturing service (EMS) providers should be responsive, adapt to small batches, and offer short lead-times while continually cutting costs.
Adding to that, shocks such as increasingly frequent natural disasters (linked to climate change) and trade wars that can cut entire supply chains at once creates an equation that is very complicated to solve. COVID-19 has forced companies to rethink their entire supply chains, raising fundamental questions about how modern businesses operate.
Is lean manufacturing still useful, or should we neglect the concept of just-in-time and readopt the just-in-case approach?
Should low-cost countries continue to function as the western world's production site, or is it time for reshoring to mitigate global risks?
Should supply chains manage a narrow supplier base, maximizing buying power and reducing complexity, or diversify to reduce the risk of a supply chain cut-down?
Most of these dilemmas derive from the limitations of current IT systems and human capacity.
Artificial intelligence (AI) and machine learning (ML) should provide the answer to managing this complexity, and for the past few years, have been widely used in multiple supply chain activities. Implementing these technologies brings us closer to optimizing our results. Still, as long as we implement AI and ML to address specific challenges in the supply chain, we can't expect to achieve more than a local optimum at best.
The next giant step would be to use the technology for creating a holistic, orchestrating solution, targeted to optimize our whole supply chain in real-time.
Today, this concept is mostly discussed in academic articles, referred to as the autonomous, or self-thinking, supply chain. It incorporates autonomous vehicles, robotics, 3D printing, the Internet Of Things (IoT), AI, and ML.
In theory, the autonomous supply chain would make human intervention unnecessary. It would independently process the activities generated out of a customer sale order, including material planning and procurement, delivery of components to the warehouse, receiving, storing, issuing the items to the production floor, manufacturing the product, and packing it. These form the inbound supply chain. It will optimize the shipping route to the customer site, allowing you to track it in real-time, monitor the equipment function, predict failures, and generate the production and shipping of replacement parts, to automate the outbound supply chain.
This entity will offer extensive predictive capabilities, enhancing its capacity to forecast trends or important discrete events that could disrupt the supply chain.
That sounds a lot like science fiction; perhaps it is unrealistic to forecast that we will ever eliminate the need for human inputs.
Nevertheless, every one of these autonomous segments already exists today, to some extent, and the technology keeps developing. The autonomous supply chain represents the full realization of the Fourth Industrial Revolution. It has enormous potential to create a competitive advantage for companies and prepare them for the chaotic future. The process for achieving a fully-autonomous supply chain is challenging and long, but companies would be wise to start the journey.
Whether they reach this ultimate goal or stop after making notable progress, the benefit in terms of their capacity to adjust to changes and offer a cost-effective, flexible solution to their clients would be tremendous.