How technology is increasing visibility and improving productivity at every step of the value chain
By Royston Phua, Vertical Practice Lead, APAC Supply Chain, Zebra Technologies Asia Pacific
The era of Supply Chain 4.0 has arrived. Disruptive technologies such as the Internet of Things (IoT), cloud computing, artificial intelligence (AI), and machine learning are being gradually implemented within manufacturing and distribution environments today. The Asia Pacific IoT market is reported to reach $436.77 billion in revenue by 2026 as government spending on smart cities, transportation and logistics, and manufacturing leading the region’s current combined spending. In fact, Zebra’s Intelligent Enterprise Index found that nearly half of transport and logistics (46%) and manufacturing (42%) organizations surveyed have already deployed IoT solutions on a companywide scale.
Once fully realized, Supply Chain 4.0 promises to give organizations faster yet more flexible operations so they are better prepared to meet shifting consumer demand. However, more needs to be done before Supply Chain 4.0 can reach scale.
Many of today’s supply chains are built around just-in-time manufacturing and fulfilment and geared toward maximized productivity, not accounting for shifts in demand. Yet, unexpected challenges like the ongoing pandemic have shown the extent and severity of instability that even a single disruptive event can provoke across Asia. Manufacturers and distributors reportedly experienced container shortages at the start of 2021 as shipping costs increased by 300%. These shortages created an industry-wide challenge in the region as demand for equipment increased. Manufacturers and distributors could only wait in line for the next available delivery of containers, hoping delays wouldn’t ripple through the entire supply chain, leading to even more costly delays in customer deliveries.
That is why organizations of all sizes must reconsider the timing of further investments in Supply Chain 4.0 technologies – and likely accelerate the implementation of IoT-powered solutions. Those who can achieve enterprise-wide connectivity, conduct real-time analytics, and automate both mundane tasks and critical decision-making will find it easier to execute operations when demand, labour or production levels are unsteady. They will also be able to track and optimize every process, asset, and resource with near-perfect end-to-end accuracy, helping to improve decisions and outcomes.
However, businesses must work with the right solution partners to determine which technologies can actually deliver a competitive edge and enable them to take advantage of future growth opportunities.
The New Dawn of Real-Time Control and Transparency
Unpredictable events and increased customer expectations have exposed the vulnerabilities of supply chains and the challenges that tend to make matters worse, such as planning issues, material shortages, and even worker shortages. As more assumptions around the resilience of traditional supply chain models are proven obsolete, many of the systems built to support them are falling short of expectations. The current systems simply cannot execute at the same level of efficacy given the level of speed, flexibility, and orchestration demanded.
Many manufacturers and distributors are aware that increased visibility is crucial for them to be able to recover when things go astray. Responding to new opportunities, threats, requirements,, or demand shifts requires agile and adaptable processes, as does long-term operational success. However, the only way such supply chain transformation is possible is if they can collect and distribute more meaningful business data across operations.
An instrumental piece to this technology evolution is radio frequency identification (RFID) tags and readers that help automate inventory processes, streamline workflows and speed up production lines. RFID solutions can complement and integrate with emerging machine vision and fixed industrial scanning solutions to increase the accuracy and reliability of quality control and track and trace processes. The addition of predictive analytics allows companies to forecast future demand more accurately for parts or finished goods, down to the weekly level. Further, prescriptive analytics provides well-directed guidance on actions that can be taken to better insulate supply chains from consequential operational errors or potentially disruptive events. Together, these technologies can successfully usher in a new age of real-time, end-to-end transparency and performance management.
Scaling the Supply Chain with Increased Visibility
Zebra’s Warehousing Asia Pacific Vision Study confirmed that supply chain visibility will be one of the most significant operational challenges over the next five years. The study reinforces that, for tomorrow’s supply chain to work well, significant advancements in business process re-engineering, automation and traceability must be made so information can be properly collected and shared from the warehouse to the customer and other stakeholders. One way this can be done without disrupting operations is by upgrading from traditional 1D or 2D barcode track and trace systems to RFID solutions that make it easy to verify and distribute status information for multiple items at once, thus enhancing productivity in the factory and warehouse. Combined with other advanced solutions like machine vision and predictive analytics, RFID technology can support the critical economic drivers associated with production and fulfilment, including asset visibility, productivity, quality control, and track and trace.
RFID technology has become increasingly easy and affordable to deploy in warehousing and logistics environments, which has resulted in its wider adoption and growing impact on supply chain performance improvements. However, achieving a maximum return on investment (ROI) requires working with a solution provider that can help integrate the technology into each business system and process properly to avoid siloed workflows and minimize complexity.
Avoid Potential Mishaps with RFID Tracking
The manufacturing plant is particularly well suited for passive RFID readers as materials generally follow a fixed path through a facility. New wide area advanced RFID antennas can expand the scanning range for real-time location tracking of every asset in the warehouse.
In discrete manufacturing, inventory is often serialized with each unique part having a dedicated place. With RFID tags, production managers can make sure materials are correctly sequenced, so the right components hit the line at precisely the right time.
Increased visibility does more than empower organizations to detect errors post-crisis, though. It also acts as a preventive measure. This allows businesses to avoid potential quality control issues that could damage their reputations or bottom lines. Furthermore, preventing asset utilization problems and enhancing tracking of raw materials keeps lines running without challenging productivity.
Connectivity Throughout Supply Chain
Like many technologies, RFID can be applied across all supply chains to drive improvements, from automotive and apparel to pharmaceutical and grocery, extending from the manufacturing plant and warehouse to transportation hubs and ultimately the final point of distribution, such as a retail or healthcare facility.
RFID solutions help grocers, quick-service restaurants, food suppliers, and even hospitals dramatically increase inventory visibility, lower costs, and reduce waste. The installation of passive RFID readers in throughways like doorways or coolers offers increased control and visibility without driving up labour costs. RFID also increases traceability in the pharmaceutical supply chain and integrates with temperature monitoring solutions to deliver more detailed information.
Optimizing Operations for Supply Chain Success
While increased automation and traceability help unlock operational success across the supply chain, change does not happen overnight. Not all companies can innovate at the same pace or embrace the same technology strategy, and solutions will need to be customized toward their own goals and unique technological needs. Strong, active leadership is required to guide the organization through the digital transformation process.
Implementation of these technologies cuts across traditional divisions within a company, requiring close collaboration and alignment of teams including IT, operations, cybersecurity, and beyond – as well as the buy-in from senior leaders. Together, these departments need to identify different pain points and change how things are done.
With the rapid technological advancements supporting Supply Chain 4.0, retailers, distribution and logistics providers, and manufacturers will be better equipped to adapt to unpredictable conditions and ever-changing market demands and ultimately improve overall workflow performance and productivity.
For more information about today’s supply chain solutions, please visit Zebra’s website.