The Evolution of Industry 4.0 in the Supply Chain for 2024

Applying Industry 4.0 solutions and technologies will become standard across the industry in the coming years, as the adoption and integration of automated systems shifts to being the new normal.

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Automation technology is no longer optional, but rather a must-have for success in the supply chain industry. Over the past year, the field has seen rapid growth and improved productivity through adoption of new technologies, including AI-based solutions and smart operations, according to a 2023 Gartner study.

This new wave of applying digital technologies to the supply chain and beyond is referred to as Industry 4.0, or the 4th Industrial Revolution. Indeed, the advances of Industry 4.0 are revolutionizing the way companies manufacture, store, innovate, distribute and deliver their products.

What does this technological shift in operations mean as we look ahead to 2024? The digitalization of supply chains will continue – and companies will need to get on board in three key areas to keep up with changes in consumer demands and expectations. Through improved data hygiene, optimized demand mapping and an integrated workforce, warehouse operators will be able to thrive and adapt to rapidly changing markets.

Keep it Clean with Data Hygiene

Warehouse operations, inventory management and fulfillment processes create a veritable tsunami of data. The organizations that harness and monetize their data will be the ones leading the supply chain game in 2024. As the supply chain sector continues to digitally transform, the importance of organizing and analyzing data will become paramount, especially when leveraging new technologies, like artificial intelligence and digital twins. The key to gaining an edge will be sorting through and analyzing existing data in order to make forward-looking projections and anticipate change.

Once a backlog of data is organized, AI models can be trained on relevant datasets and applied to the system to analyze and make predictions tailored to the company as a whole. The data can also be used to build a digital twin of certain aspects within an organization’s supply chain. From there, the digital twin technology can be leveraged to improve system monitoring, not just within a specific warehouse but across multiple sites, providing useful insights on potential maintenance needs and other operational enhancements.

Maintain Supply with Demand Planning

Demand planning is critical to optimizing operations before a customer places an order. In order to do so effectively, inventory and order data needs to be organized and maintained. Without good, accessible data, demand planning will be inaccurate and less useful.

AI technologies will be essential in developing more dynamic and actionable demand plans that are tied to real-time data. This dynamic planning allows companies to forecast what products to keep in stock, where to store them, and when to boost inventory to meet future demand. As a result, when a customer places an order and expects a quick turnaround, distributors can readily meet that expectation with a better system in place supporting their last-mile delivery efforts.

While “black swan” events can throw these predictions off, implementing technology that is enabled by good data hygiene practices, and in turn executing dynamic demand planning, will improve a company’s overall performance and customer experience.

Teamwork Makes the Supply Chain Work

Having robot coworkers was once considered futuristic, but today it’s an element that can be seen in warehouses and many other workplace environments around the world. Whether it’s retrieving an order from a robotic AS/RS to be packaged or having an AI system notify someone of a damaged item in a distribution center, people are already working side by side with robots and automation solutions.

Robots typically handle the dull, dirty, and dangerous work, leaving the creative, problem-solving jobs for people to perform, rather than repetitive tasks. In this way we can elevate the human workforce to complement the technology they collaborate with, improving workplace conditions and mitigating labor shortage issues.

Data comes into play again by providing insights into optimizing operations by leveraging the specific skill sets of two different workers – human and robotic. Similar to demand planning, the data allows for improved labor planning, which helps identify the best way to meet needs and solve problems seamlessly within an operation.

The need for human labor isn’t going away any time soon. As more advanced automation systems are deployed, the industry will transition to providing higher-level decision-making roles to human associates and leaving the monotonous, more physically demanding jobs to robots.

Looking Ahead

Over the next five years, we will continue to see the relationship between people, automation, and data evolve and change the way the fulfillment industry operates. This new wave of digitalization and automation will allow companies to leverage their data and optimize the orchestration of people and robots in their supply chain.

Applying Industry 4.0 solutions and technologies will become standard across the industry in the coming years, as the adoption and integration of automated systems shifts to being the new normal. This transition will require organizations to utilize data to improve business strategies in new, innovative ways. Companies investing in data management and automation will ultimately take up a leadership position, since they will be better able to meet the hyper-localized, real-time demands of customers.