Industry 4.0 encompasses smart processes of operations, products, services, as well as the entire supply chain itself. The latter, called the smart supply chain, becomes more interconnected, integrated, and better tracked, through the interdependency among all steps of the process.

 

The digital supply chain – an interconnected network in which information flows across various links in the chain, providing it more visibility, integration, resilience, and sustainability – is one of the topics addressed by Insper’s Advanced Program in Digital Transformation. The challenges of the new digital revolution, however, are just about to begin. “When you go to the countryside, in agriculture, or even in industry, with some factories further away from large urban centers, connectivity is still a problem,” André Duarte, professor of Supply Chain Strategy at Insper, says.

 

The most recent survey by the Brazilian Internet Steering Committee (Comitê Gestor da Internet in Portuguese), carried before the COVID-19 pandemic, indicates that about 40% of Brazilian companies connected to the global computer network use some sort of cloud service. This is one of the basic technology resources for intelligent automation in the industry – the first bottleneck remains, despite advances.

 

The intelligent supply chain is transparent because it allows the industry and suppliers to know where each product is. It is resilient because possible breaks in the chain can be rearranged. And it’s sustainable because, nowadays, it is not enough to focus only on cost and speed of delivery. “The carbon footprint, which measures the emission of greenhouse gases in the atmosphere, shows how much supply chains are affecting the environment, but it is also essential to measure their social and economic impact”, Professor Duarte says.

 

For the digital transformation to be complete, it is necessary to achieve a state that champions well-being. “I would say that we are starting to take a closer look at the social impact of supply chains, which is normally more difficult to measure”, Professor Duarte adds. “It is important to appreciate how much it is improving the lives of people who buy products and services, but also those who work in supply chains. I believe this is the big challenge for digital supply chains.”

 

 

The right decision

 

Thinking about Industry 4.0 logistics, the technology is based on sensors that capture data from customers, machines, trucks, and products to give visibility and transparency to the entire chain. This data goes to a central cloud and is, later, analyzed for process automation (with autonomous decisions) or to deliver inputs so that people in charge can make the best decisions.

 

Digital transformation, therefore, requires professionals with an increasingly analytical profile rather than operational one. “When we talk about the 4.0 operations, where machine communicate with other machines, with products, sending them to a system in the cloud, we have to have an operator with the skills to analyze this data and make the decision, if that decision is not already somewhat automated”, Professor Duarte explains.

 

Operation and digital supply chain maturity starts with information and connectivity. Then, visibility and transparency of the process. Finally, predictive models of supply chains emerge, to anticipate what will happen with the operation. “The last stage is when you manage to make this chain or this operation adapt automatically, in such a way that its decisions are already decisions that optimize the results of the chain, within what you want”, Duarte says.

 

By optimization, we mean cost, sustainability indicators, speed — a total, systemic view. “You cannot optimize a machine or a plant individually. We are optimizing the supply chain as a whole and several indicators”, says the Professor.

 

Learning based on theory, practice and case studies makes it possible to transform the digital world into something tangible and to show its impact on operations. “The great thing about digital operations and supply chain is not just the technology, but the digital mindset, how much I can change my processes to serve my customers and employees with more quality and efficiency, in addition to bringing optimized results”, Duarte adds. Technology helps, but the people are still paramount.



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