Supply Chain Integration: Insights into IOT/Industry 4.0 David Eyes

Internet of Things (IOT) The network of physical devices such as Vehicles, Home appliances, Any item imbedded with electronics, software, sensors, actuators and connectivity which enables these objects/devices to exchange data.

Industry 4.0 What is Industry 4,0: aka Factory of the Future, Smart manufacturing or the Digital Enterprise Industry 4.0 is the current trend of automation and data exchange in manufacturing technologies.

IOT and Industry 4.0 are enablers Big Data

Realisation and imagination is the key Many forms of IOT big data creation are fully imbedded, we just haven’t realised it yet. World's fishing fleets mapped from orbit More than 70000 fishing vessels in the world Each vessel is equipped with Automatic Identification System (AIS) AIS pushes out information on position course and speed every few seconds

Realisation and imagination is the key 85% of Global fleets came from 5 countries. the analysis recorded over 37 million hours of fishing. vessels consumed 20 billion kilowatt hours of energy and travelled a total of more than 460 million kilometres. That's 600 times the distance to the Moon and back. AIS data is yielding information on maritime trade routes and shipping corridors and on trade flows for decision-making,

Changing Demand Landscape Historic supply chain, as captured by L. S. Lowry in 1955

Changing Demand Landscape Modern supply chains Digital Integration

Changing Demand Landscape 1926: 2016:

Fulfilling Customer Requirements is Key Tier 1 6500 partners 1.6 trillion products Tier N ??? OEM 65,000 vehicles DATA FLOW Tier 2 34,000 partners How many products?

Impacts of a More Disparate Supply Chain Demand risks Financial risks Business risks INCREASED COMPLEXITY Supply risks Manufacturing risks Environmental risks Political risks Planning and control risks

Supply Chain Disruption Zero incidents 15% 56% 16% 6% 4% 3% Between 1 and 5 incidents Between 6 and 10 incidents Between 11 and 20 incidents Between 21 and 50 incidents More than 51 incidents Zurich (2011)

Leading causes of disruption Adverse weather Unplanned IT outage Transport network disruption Earthquake / tsunami Failure by an outsourcer Highlight examples – “loss of talent/skill” is the lady “doing EDI” on her laptop! Loss of talent / skill Report from: https://www.zurich.com/en/media/news-releases/2011/2011-1130-01

Findings 85% of companies surveyed had at least one supply chain disruption For 17% of respondents, the financial cost of the largest single incident totalled a million or more $ 40% of disruptions were below Tier 1 Supply chain incidents led to a loss of productivity for almost half of businesses, along with an increased cost of working (38%) and loss of revenue (32%) Longer term consequences included shareholder concern (19%), damage to reputation (17%) and expected increases in regulatory scrutiny (11%) Zurich (2011)

Modern example of IOT and Industry 4.0 in practice. Connecting the Human Workforce.

The results are staggering Picking performance went from 10 p/h to 25 p/h and its still getting better We were able to do more work with 13 connected operators than we previously achieved with 30 paper controlled operators 35% decrease in operational costs Picking accuracy has increased to 99.8 % Improved safety, Now operators are practically hands free when moving goods, No Paper, Clib boards, Pens ,Hand held Scanners 97% reduction in training time. ROI achieved in 3 months instead of planned 9 months Process was then expanded to Lineside inspection process. ROI achieved in 1 month 30% reduction in inspection time and data recall, due to removal of Paper, Inspection check list and manual data entry.

Survey Insights: The US market 50% of companies have an ERP, but do not use Digital Integration Reasons include: Demand for Digital Integration Expense Competence Capacity

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