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Industrial revolution 4.0: impact on development of supply chains and logistics

Every company and organization operating today is different; however all are facing a common challenge i.e. need for connectedness and access to real-time insights across processes, partners, products, and people.

The term “Industry 4.0” refers to a new phase in the Industrial Revolution that focuses heavily on interconnectivity, automation, machine learning, and real-time data. It also referred as IIoT (Industrial Internet of Things), or smart manufacturing which the amalgamation of physical production and operations with smart digital technology, machine learning, and big data. It is creating a more holistic and better connected ecosystem for companies that focus on manufacturing and supply chain management.

Global Supply Chains and the Logistic Industry are important beneficiaries of technological progress. The Industrial Revolution 4.0 sees supply chains that are able to produce products from vast quantities to single items using flexible processes. Logistics companies should also be ramping up their investment in technology to deliver Logistics 4.0. The world becomes more and more digitally. The logistics trends predicted for 2019 and beyond are more tangible. The development of Logistics 4.0 is creating huge changes within companies. Many researchers and companies are convinced that automation, networking and digitizing will become more and more important within the industry. End-to-end visibility is very vital. The complete visibility of the entire supply chain could achieve true demand-driven planning, allowing efficient response to changes in sourcing, supply, capacity and demand.

Business analysts have identified ten strategic technology trends that will to have an impact on companies in near future and they will shape the digital business opportunities in twenty-first.

These trends relate to connect the real world with the virtual one and the emergence of the digital connection.

Technology trends impacting on development of supply chains and logistics

The ten fundamental technological trends that will effect on companies and their activities are:

The Device Mesh: trend concerns the growing set of endpoints people who are using mobile devices wearable, consumer and home electronic devices, automotive devices and environmental devices, such as sensors in the Internet of Things (IoT).

Ambient User Experience: a trend that refers to connect the virtual world with the real world. The ambient user experience preserves continuity across boundaries of device mesh, time and space. The experience seamlessly flows across a shifting set of devices and interaction channels blending physical, virtual and electronic environment as the user moves from one place to another.

3D Printing Materials: Advances in 3D printing have already enabled 3D printing to use a wide range of materials. These innovations are driving user demand, as the practical applications for 3D printers expand to more sectors, including aerospace, medical, automotive, energy and the military. In the next 20 years will increase either the demand for models and components used in 3D printing either materials used for printing.

Information of Everything: the amount of data is growing at an alarming rate, therefore in the nearest future the demand for analytical systems will increase. Information of everything addresses this influx with strategies and technologies to link data from all these different data sources.

Advanced Machine Learning: in advanced machine learning, deep neural nets (DNNs) move beyond classic computing and information management to create systems that can autonomously learn to perceive the world, on their own. The explosion of data sources and complexity of information makes manual classification and analysis infeasible and uneconomic. DNNs automate these tasks and make it possible to address key challenges related to the information of everything trend.

Autonomous Agents and Things: Machine learning gives rise to a spectrum of smart machine implementations — including robots, autonomous vehicles, virtual personal assistants (VPAs) and smart advisors — that act in an autonomous (or at least semi autonomous) manner. While advances in physical smart machines such as robots get a great deal of attention, the software-based smart machines have a more near-term and broader impact.

Adaptive Security Architecture: The complexities of digital business significantly increase the threat surface for an organization. IT leaders must focus on detecting and responding to threats, as well as more traditional blocking and other measures to prevent attacks. Application self-protection, as well as user and entity behavior analytics, will help fulfill the adaptive security architecture.

Advanced System Architecture: The digital mesh and smart machines require intense computing architecture demands to make them viable for organizations. Providing this required boost are high-powered and ultra-efficient neuromorphic architectures. Fueled by field-programmable gate arrays (FPGAs) as an underlining technology for neuromorphic architectures, there are significant gains to this architecture, such as being able to run at speeds of greater than a teraflop with high-energy efficiency.


Mesh App and Service Architecture: Monolithic, linear application designs are giving way to a more loosely coupled integrative approach: the apps and services architecture. Enabled by software-defined application services, this new approach enables Web-scale performance, flexibility and agility. Microservice architecture is an emerging pattern for building distributed applications that support agile delivery and scalable deployment, both on-premises and in the cloud.

Internet of Things Platforms: IoT platforms complement the mesh app and service architecture. The management, security, integration and other technologies and standards of the IoT platform are the base set of capabilities for building, managing and securing elements in the IoT. The IoT is an integral part of the digital mesh and ambient user experience and the emerging and dynamic world of IoT platforms is what makes them possible.

A Research conducted by from McKinsey Global Institute has found that in 2025 IoT will have a total economic impact of between $2.17 trillion and $5.75 trillion across factories, retail environments, logistics and navigation i.e. all key supply chain areas. They also indicate how companies can boost efficiency, productivity and competitiveness. These trends are except of Internet of things, RFID, 3D printing and drones.

The rapid development of modern logistics used platform based on the RFID technology is the results from few things. RFID technology is a simple, cheap and secure solution. Internet of Things can go beyond it because can provide accurate flow of information of products in market to provide a reliable basis for logistics market analysis, forecasting and decision making. Using mobile technologies and the Internet of Things, enterprises can accelerate productivity, profitability and operations with solutions designed specifically for their processes. Building solution where enterprises can connect all devices across a distributed network, capture and share their mission-critical data, allowing them to show real-time view of all operations

The organization of the supply from a technological view will mainly change due to the implementation of BI-technologies, Smartphone Apps, AIDC- and RFID-technologies and the miniaturization of electronics. However, structural changes to the organization are to be expected mainly in manufacturing processes. Impacting technologies are the M2M-communication, and Smart Factory including Smart Logistics. With the combined implementation of Smartphone Apps and Smart Data tools, the interaction of people within the supply chain will face a huge impact in the sales departments of companies, where the customer can be integrated and organizational borders are eliminated.

Internet of Things promises far-reaching payoffs for logistics operators and their business customers and end consumers. These benefits extend across the entire logistics value chain, including warehousing operations, freight transportation, and last-mile delivery. And they impact areas such as operational efficiency, safety and security, customer experience, and new business models.

As with most technology transitions, it is helpful to look at IoT in a broader context, and to consider some of the best practices from other industries. This can inform and inspire the use of IoT in logistics. With millions of shipments being moved, tracked, and stowed by a variety of machines, vehicles and people each day, it is no surprise that logistics and Internet of things is a perfect match. In logistics, IoT can connect different assets along a supply chain in a meaningful way, and then analyze the data generated from these connections to capture new insights. By doing so, IoT enables logistics providers to unlock higher levels of operational efficiency, while creating customized, dynamic, and automated services for their customers. Falling prices of device components (sensors, actuators and semiconductors), faster wireless networks, and increasing data crunching capabilities only compound the business benefits, ensuring that IoT becomes a disruptive trend in the logistics industry over the next decade.

According to recent calculations, the worldwide data volume will increase to 44 billion gigabytes by 2020. This is ten times as much as today. This makes data the most important currency of the industry. Only if companies make economic use of these data, for instance for optimizing their processes, they can achieve long-term success on the market. Internationally, smart logistics solutions are already accepted and frequently used. Companies missing this trend, will sooner or later be outdone by their competitors.

Increasing the visibility of products in the supply chain, IoT can improve their traceability from the farm to the consumer’s table, reduce fraud, meet consumer expectations in terms of greater transparency and create new marketing opportunities. Plans of companies related to IoT are as follows: 83%- location tracking, 83% – Wi-Fi, 80% – GPS location, 79% – asset tracking [3]. On the way to take full advantage from Internet of things by companies laid some obstacles. One of the basic is date safety – data are owned by many users, hence the need to develop mechanisms to protect data and the credibility of their sources. Another obstacle is the lack of standardized solutions that combine data from different systems and their smooth integration.

We cannot also forget about the cost barrier, limiting for many companies the opportunity to exploit the potential of IoT e.g. the cost of software, necessary equipment, licenses, installation, maintenance of equipment, training of employees. The logistics sector is inherently predisposed to implement the latest technologies. The greatest potential for growth brings IoT.

The author, Nazir Ahmed Shaikh, is a freelance columnist and is an educationist by profession. Currently he is associated with SZABIST as Registrar and could be reached at nazir.ahmed@szabist.edu.pk

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