Skip links
Supply Chain

Supply Chain 4.0 – Rewriting Supply Chain Management

When supply chain uses IoT applications, advanced robotics, and advanced big data analytics, it makes up Supply Chain 4.0. It places sensors in everything, automates everything, creates networks everywhere, and analyses everything to improve performance and customer satisfaction.

Thirty years ago, logistics was an operational function reported to sales or manufacturing, which ensured the supply of production lines and delivery to customers. Now, companies have independent supply chain management function led by a Chief Supply Chain Officer (CSO).

How will Supply 4.0 be?

Digitizing supply chains improves efficiency and addresses challenges in supplies, customer requirements better, and improves efficiency. Digitization makes supply chain:


A new product distribution approach built on advanced forecasting approaches reduces fast movers’ delivery time to a few hours. Predictive analytics of internal (ex. Demand) and external (ex. Weather, market trends, or construction indices) data provide a precise customer demand forecast.

Using predictive shipping, for which Amazon holds a patent, Amazon ships products before customers place an order. The company matches the shipment already in the logistics network with a customer order, and then reroutes the shipment to the exact customer destination.

More flexible

Ad-hoc and real-time planning allow a flexible reaction to changing demand or supply situations. Supply chain planning functions or transport management are the new business models that increase flexibility in the supply chain organization.

The specialization and focus of service providers allow companies to create economies of scale and scope and attractive outsourcing opportunities. The ‘Uberisation’ of transport is crowd-sourced and flexible, increasing agility in the distribution networks.

More granular

The demand for more individualized products increases, giving a push to micro-segmentation, enabling the implementation of mass customization ideas. Customers are managed in more granular clusters, and a broad spectrum of suited products will be on offer that enables customers to select a logistics plan fitting their needs. Transport concepts like drones allow companies to manage the last-mile efficiently for single and high-value dense packages.

More accurate

The next-gen performance management systems provide real-time, end-to-end transparency throughout the supply chain. Performance management systems can ‘learn’ to identify risks or exceptions, changing supply chain parameters in a closed loop learning approach to mitigate them.

More efficient

Automation of physical tasks and planning boosts efficiency. Robots handle the material automatically in the warehouse from receiving/unloading to putting away to pick, pack and ship. Optimizing the network can fit the business requirements.

How will Supply Chain 4.0 ‘Deliver’?

Enterprises can deploy the digital supply chain spanning design, manufacturing, asset management, and logistics to play a critical role in ensuring positive customer experiences. But to get there, organizations must integrate the digital supply chain across R&D, manufacturing, supply chain planning, logistics, maintenance, and aftersales service.

Digitally connecting everything can perfect operational reality. Here is how.

Customer-centric design

Organizations can monitor trends and innovate as per customer pulse. Organizations want to design Industry 4.0-enabled smart products and assets with built-in sensors to capture real-time data in a live environment and integrate it into complaint management.

Plan with visibility across silos

Organizations must connect across departmental silos for a unified view of real-time supply and demand, balancing inventory and service levels to reduce planning cycle time. Planners want synchronized planning processes that break down silos to run simulations for better decision-making, speeding planning cycles quickly, and react faster to change.

Flexible, speedy, and efficient manufacturing

Organizations can increase floor visibility, identify process bottlenecks, and manage operations with a sophisticated digital supply chain and greater connectedness. The smart and rigid production lines are transformed into flexible manufacturing cells, making it possible to shift from mass production to mass customization.

On-time delivery

Organizations can streamline logistics and ensure better delivery experiences by optimizing delivery routes based on real-time weather and traffic conditions, conditions such as temperature in freezer compartments. Meanwhile, the next-gen warehouse can leverage robots and augmented reality to assist staff, increase productivity, and ensure quick delivery of goods.

Operate with new business models

Finally, operations with IoT-connected assets transform the operational phase driving new business models where the manufacturer owns the asset and charges customers for usage, uptime, or other metrics.

With such a model, the manufacturer can provide cost-efficient maintenance, which is now possible with advanced analytics helping companies monitor asset health, predict issues, and respond proactively.

The supply brain

The digital supply chain operates like a network or a brain that can orchestrate visibility, communication, planning, analysis, and execution across operational phases based on real-time inputs and requirements.

This ‘supply brain’ powers intelligent enterprise is driving change. For example, IoT can drive predictive maintenance, and machine learning can detect fraud, 3D printing can bring production closer to customers, while blockchain can track and trace goods.

To conclude, the digital revolution is creating a whole new paradigm for the supply chain. What was once about delivering the right quality at the lowest cost, with the agreed service level, is now about increasing sales, creating, and capturing value.

Draup for Sales has helped hundreds of its clients adapt to the new normal and integrate into their Supply Chain 4.0. It puts a large pool of data, well-researched analytics, latest trends, and industry best practices into the hands of decision-makers. Its sales intelligence is helping enterprises pivot to intelligent manufacturing.