The importance of the digital transition is a well-established theme, which in the manufacturing world has already been taken into account within the Industry 4.0 standards. But in order to take full advantage of it, it is necessary to consider one of the key aspects of the digital supply chain: integration with suppliers and customers.
In practice, it is about the possibility of integrating information flows within the entire production chain, even and especially when this involves interconnection between different production realities. This is a relevant topic, which to tell the truth is nothing new: it has already been incorporated even by the National Plan Industry 4.0, but whose benefits often remain unexplored. Let’s see what the main ones are.
Digital Supply Chain Improves Efficiency
In adopting advanced digital solutions for information interchange and integration with suppliers and customers, the manufacturing sector has a strategic advantage. In fact, it can take advantage of solutions already used within other sectors, dematerialized by their nature, such as finance or IT services. This means that the solutions that can be adopted in the digital supply chain are already established and have already proven their effectiveness.
The digital supply chain, which in a smart factory context is the backbone of the digital value chain, takes advantage of technologies such as Big Data, IIoT, and artificial intelligence to make processes more efficient, minimize production downtime, and generally foster competitiveness.
To clarify with an example, let us imagine a complex supply chain context in which a company uses raw materials from a supplier and sends semi-finished products to a customer.
Let’s start with a simple case: the raw material supplier’s control systems detect, and anticipate, a delay in delivery. In an analog supply chain, this delay must be communicated, tending to the purchasing department of the intermediate company, which in turn must communicate it to its customer, with all the inefficiencies and non-idealities involved.
In an integrated digital supply chain, it is directly the machinery involved, or the data management systems, that communicate with each other in real time. In this way, information is immediately available within the dashboards of all entities involved, for appropriate organizational interventions.
This is at a minimum. But in the case of more complex supply chains, and companies with a strong digital component, it is possible to have the systems automatically negotiate remediation interventions, for example by switching to handle a subsequent order for which raw materials are available.
The benefits of integrating with customers and suppliers in the digital supply chain
As we have mentioned, the fundamental theme of supplier-customer integration in the digital supply chain is undoubtedly the increase in efficiency, which, as we know, involves in the very first analysis a reduction in costs. In particular, by significantly reducing manual intervention in inventory management, ordering and scheduling, there will be a lower risk of errors, as well as the ability to relieve staff of repetitive and time consuming tasks. This will allow people to focus on more value-added tasks, rather than those that often boil down to simple compilation.
If integration is extended to the entire production chain, the entities involved will be able to take advantage of it in various contexts, including inventory management, deliveries and storage processes. The real added value of an integration process, in fact, is that of theelimination of bottlenecks, through the circulation of quality data.
Within a virtuous collaborative circle, data sharing also enables rapid decision-making within the entire digital value chain. In the example before, if an upstream supplier learns of a shortage of a raw material, production can be quickly redirected to other products for which there are no supply issues, even if this involves several companies.
We already know that one of the advantages of the smart factory is the circulation of information, which, among other things, allows for the elimination of manual and repeated data entry. But this advantage, again in a context of integration with customers and suppliers, can extend to all companies involved. In this case, as suppliers, we can also think of offering this integration as added value, freeing our customer from the need to re-enter data and instead providing a way of connecting the management systems.
In general, the benefits of information circulation are many and considerable, especially in today’s environment, where reducing management time and making resources more efficient are diriment to the success of any type of business.
Contact us to learn about Regesta’s solutions dedicated to the Digital Supply Chain.
