Software Solutions Development for Supply Chain Management (SCM) in Industry 4.0
Today, in the new Industry 4.0, or the “fourth industrial revolution”, business organizations are constantly looking for new ways to leverage new technologies to their manufacturing operations. Specifically, technologies such as AI/Machine Learning, IoT (Internet of Things), together with Intelligent Automation and Sensors are drastically changing the way organizations manufacture, and distribute their products and services - which directly impact the supply chain management of business organizations.
For example, in the traditional model of supply chain management, business organizations would typically perform maintenance or fix their machinery equipment only when they start to malfunction.
In industry 4.0, organizations are using innovative technology such as machine learning to proactively predict failure for maintenance, even before it happens.
The way organizations apply technology and software to their supply chain management is drastically different from how they did it back in the day.
In this article, let’s take a deeper look into the significant benefits of how software development using innovative technology can bring to business organizations, particularly their Supply Chain Management.
Advantages of emerging technologies for SCM
SCM in industry 4.0 has many benefits over traditional SCM as it allows organizations to align planning and production while also help reduce overheads significantly.
These days, many companies have their product manufacturing planned closely according to customer demand. This creates difficulties in making sure that the level of output will meet market demand without exceeding, thus, avoiding costs of storing, maintenance, and a host of other expenses.
Supply chain management software development using “smarter” technologies can help organizations to meet both the market demand and budget goals simultaneously.
Furthermore, certain SCM models are now incorporating automation to automate a variety of mundane tasks that free up supply chain employees’ time and allow them to focus on their core competencies, contribute to businesses in ways that add more value.
Supply Chain Management in the new Customer-centric Economy
Generally speaking, the overall objective of SCM has always been about increasing efficiency and reducing costs. And, the new era of digital transformation doesn’t take away or change those needs.
However, what has changed is that in the new customer-centric economy - customers and their demand now play a critical role in setting SCM priorities. Thus, software development for supply chain management also evolves to help organizations respond quickly and on time to customer demand.
Customer loyalty is solidified based on the organization’s capability to quickly and accurately satisfy customer expectations. All aspects of supply chain management such as raw materials, manufacturing, shipping, and order processing, etc. must all be considered in order to deliver a certain product to customers within an acceptable timeframe.
To achieve this, software development for supply chain management must gain a perspective from the customer’s point of view.
It’s more likely that customers demand driving SCM software development instead of the other way.
Supply chain management software not only needs to enable companies to deliver the order to customers on time but should also allow organizations to do everything at the right time - before, during, and after order delivery.
The Need for Agility
Consumers nowadays have many choices when it comes to how they purchase products - it could be done online through desktop/mobile devices, or in-person visiting physical stores. As a result, they’ve grown accustomed to an increasing level of service that is quick, efficient, and highly tailored, and custom to their needs. The competition is higher than ever.
Thus, supply chain management is continuously evolving and becoming more complex, broad, and deeper. This also means that the supply chain needs to become agile to be effective - in order to deliver on such expectations by consumers. Software development for SCM, therefore, also has to become agile.
Due to expanding world trading, Today’s supply chain sourcing has become a lot more dynamic but also more complicated than before.
For example, if a company cannot get a rare metal for the manufacturing of their product, due to trade policy, then they need to be able to quickly source the raw material elsewhere. Being able to quickly adjust the supply chain is critical to successfully addressing this type of scenario. Agility is crucial to achieving these types of real-time reconfigurations.
Challenges in the modern supply chain have evolved beyond efficiency and costs reductions. As mentioned above, external circumstances may significantly impact and disrupt an organization’s supply chain. Thus, the modern SCM system should be built flexible enough to minimize the impacts caused by sudden changes introduced into the supply chain, such as changes in trade policies and regulatory requirements.
Adopting new technologies for SCM system development can help organizations to become more efficient, and reduce overheads while staying compliant with a plethora of ever-changing business circumstances.
SCM and cloud technology
Today’s SCM key metrics require organizations to adopt new technology to efficiently accomplish it. Having said that, cloud computing technology now plays a highly important role in software development for SCM. This is because cloud-based software applications are inherently more flexible and highly scalable, in comparison to the traditional legacy systems.
In many cases when organizations need to scale up their SCM system, a cloud-based solution will enable them to do so effectively, without having to undertake a full-scale migration.
Additionally, on-premises and custom-coded applications are a lot more rigid, making it challenging to respond and adapt to changes - that can frequently occur in today’s business environment (e.g. unexpected sourcing issues).
More importantly, cloud-based SCM solutions are also more appropriate to architects and make use of emerging technologies such as Machine Learning and Blockchain that are pervasive in industry 4.0.
Blockchain to improve visibility and transparency in SCM
One issue that still remains present in SCM is the lack of visibility throughout the entire chain. Business organizations need to know what’s taking place in every aspect of their supply chain at all times.
A new smarter SCM system can offer that capacity. By levering blockchain technology and IoT, with sensors, certain companies can gain visibility and insight into their SCM processes. This helps ensure traceability, repudiation, and trust throughout your supply network.
The potential of applying blockchain and IoT into SCM is highly promising, especially, the food and beverage industry.
Blockchain technology is instrumental in helping food and beverage companies to manage a very complex supply chain for increased visibility, more accurate forecasting, and greater profitability while building deeper trust between the company and its customers.
Read more about: Supply chain management with Blockchain Technology
The Future of Supply Chain Management Software Development
The future of supply chain management software development is all about meeting and keeping up with customer demand and digital experience - with all activities managed inter-connectedly rather than a straight linear model.
All the points of the supply chain management system must take into account the various issues of trade policies, shipping methods, and more while staying aware of and responsive to the demand of consumers.
Advanced technologies in software development for supply chain management will become increasingly adopted, in order to improve transparency and provide business organizations with better visibility throughout the network - via sensors, IoT connectivity, and SCM utilization. Equally important is the SCM planning function will become smarter to account for consumer demand and other various factors to optimize the whole process, and enhance efficiency.
In the past, supply chain management was more of a seasonal business exercise - now, it's becoming more of a continuous operation throughout. The increasing requirements for speed and accuracy in supply chain management software development will only increase forward. It’s important that business organizations start planning for the future now, by supporting it with smarter technologies in supply chain management software development.
SCM software systems are now moving toward end-to-end solutions that can help business organizations to manage and optimize their supply chains as one ecosystem. Those systems are fully integrated cloud technologies, which enable organizations to scale up or down effectively in order to respond to market-changing conditions.
In the new customer-centric economy, those SMC software solutions are modernizing and driven by customer demand instead of the other way around. Modern SCM software solutions development allows companies to address the problem of increasing customer expectations, shorter product lifecycles, and fluctuating demand.