Improving supply chain resilience through Industry 4.0

By: Victor Leeuw, Operations Executive Warehousing and Logistics, FunxionO

Industry 4.0. Everyone is talking about it and pointing to the future of how we work. For some, it’s exciting. For others, it’s terrifying, particularly as Industry 4.0 often refers to the automation of jobs currently performed by humans. What will it do to our workforces? And given South Africa’s unemployment crisis, how will it impact our economy?

As a labour partner, one could think that at FunxionO we are against the digitisation of industry. Afterall, we provide specialised outsourced labour solutions. In fact, that couldn’t be further from the truth. We believe the Fourth Industrial Revolution provides an enormous opportunity – one we believe all businesses in South Africa can leverage.

First, let’s confirm what Industry 4.0 is. The Fourth Industrial Revolution (4IR) refers to the ongoing transformation of traditional industries through the integration of advanced digital technologies, automation, and data exchange. This revolution builds upon the previous three industrial revolutions, which were characterised by mechanisation (Industry 1.0), mass production (Industry 2.0), and automation (Industry 3.0).

Now, Industry 4.0 is characterised by the fusion of digital, physical, and biological technologies. This revolution is underpinned by innovative technologies such as the Internet of Things (IoT), artificial intelligence (AI), robotics, and blockchain, which together are transforming industries across the board.

Specifically, supply chain resilience, a crucial aspect of any successful business, is being significantly enhanced as a result of these advancements.

4IR and the future of supply chains

One of the primary ways Industry 4.0 improves supply chain resilience is by enabling greater visibility and real-time monitoring. IoT devices, such as sensors and GPS trackers, can be integrated into various points along the supply chain, providing a wealth of data on the location, status, and condition of goods. This increased transparency allows businesses to promptly identify and address potential disruptions, ensuring that the supply chain remains robust and adaptable.

In addition, data analytics and AI play a pivotal role in enhancing supply chain resilience by allowing companies to make more informed decisions. By harnessing the vast amounts of data generated by IoT devices and other sources, advanced analytics tools can identify patterns, trends, and potential risks that may not be immediately apparent. This empowers businesses to predict and respond to disruptions more effectively, mitigating the impact of adverse events on the supply chain. Machine learning algorithms can also be employed to optimise logistics and inventory management, ensuring that resources are allocated efficiently and that supply chains remain agile.

Notably, identifying and addressing potential disruptions and leveraging data to make better business decisions all require human intervention. It is people who ultimately make supply chains resilient – Industry 4.0 just offers greater tools to do so.

However, Industry 4.0 also involves robotics and automation technologies. The key is to understand that automated systems can perform tasks with greater speed, precision, and consistency than their human counterparts, resulting in reduced downtime and increased efficiency. However, it also frees humans up for more meaningful work. Ultimately, jobs will change, and our labour forces should be upskilled in those requirements. We shouldn’t be losing jobs – we should be creating new, high-value roles that benefit businesses and employees alike.

But let’s return to how supply chain resilience is supported by Industry 4.0. Digital collaboration platforms and advanced communication tools are fostering greater connectivity and collaboration among supply chain stakeholders. By facilitating real-time information sharing and seamless communication between suppliers, manufacturers, distributors, and retailers, these technologies can help businesses adapt more rapidly to disruptions and changing market conditions. This increased level of collaboration strengthens supply chain resilience by enabling a more coordinated and efficient response to potential challenges.

Importantly, Industry 4.0 also promotes the adoption of more sustainable practices in the supply chain, contributing to long-term resilience. Advanced technologies can enable businesses to optimise resource use, reduce waste, and minimise their environmental impact. For example, AI-driven analytics tools can help companies identify inefficiencies in their operations, such as energy consumption or material usage, and suggest ways to improve their sustainability performance. By adopting more environmentally responsible practices, businesses can safeguard their supply chains against potential regulatory changes or resource scarcity, further enhancing resilience.

Finally, the 4IR is driving the development of new business models and strategies that can bolster supply chain resilience. For instance, the rise of additive manufacturing, or 3D printing, allows companies to produce goods on-demand and closer to the point of consumption, reducing the need for extensive inventories and long-distance transportation. This localised production model can help businesses become more agile and responsive to market fluctuations, ensuring that their supply chains remain resilient in the face of change.

Where skills and 4IR converge

Yes, automation will take the place of human workers. It already is in many sectors. However, by ensuring your workforce is trained and equipped with the necessary skills to work with Industry 4.0 technologies, you can leverage the best of all worlds, maximising the benefits of these technologies while minimising potential risks and upskilling and future-proofing the career growth of individuals.

As a specialist outsourcing partner, FunxionO works closely with our clients to deliver the specialised knowledge, skills, and resources that businesses need to adopt and implement Industry 4.0 technologies and processes more efficiently and effectively.

Our clients have also found that outsourcing specific functions can lead to cost savings, as businesses can avoid the expenses associated with hiring, training, and retaining in-house staff. These savings can be redirected towards investments in 4IR technologies and infrastructure, which can all be leveraged to build additional supply chain resilience into the business.

Ultimately, embracing 4IR is not only about technology. It’s about the people who augment that technology, leveraging it to future-proof organisations.

If your business is interested in the best of both worlds and you are looking for ways to future-proof your organisation, FunxionO has solutions that will streamline your supply chain.