Larger logistics companies have been harnessing the power of Industry 4.0 for years, increasing productivity across the board and reaping its benefits. Lucy Pamment, supply chain software specialist, Access Group.
In comparison, smaller companies have been slower to adopt digital efficiencies into their systems. However, with the logistics giants storming further ahead, those lower tier businesses that fail to adopt, adapt and change, could find themselves getting left behind, says Lucy Pamment, from supply chain software specialist Access Group.
When most people think of the word Industry 4.0, it summons images of futuristic-looking robots taking over the world. But, in reality Industry 4.0 software is often a world away from such stereotypes and is rapidly becoming more commonplace. Across every sector, technology is replacing the hands-on jobs humans once did, increasing traceability, accuracy and pushing down costs.
Until recently, smaller logistics companies may not have given digitalisation much thought. But industry forecasts suggest that top level businesses are increasingly refusing to work with firms who use spreadsheets and paper records to monitor traceability. As a result, it’s only a matter of time before they demand integrated processes to track every order or delivery so any potential errors can be caught before the goods arrive at their destination.
Without a complete audit trail, suppliers face missing out on future contracts, not to mention reputational damage. But, the only way logistics companies can assure full traceability is by transferring data electronically using industry-standard systems. As well as order information, suppliers are increasingly expected to send documents, like purchase orders and invoices, via an Electronic Data Interchange (EDI) to speed up administrative tasks and ensure prompt payment.
Another common misconception around Industry 4.0 is that the cost of incorporating it into everyday strategies, is beyond smaller companies. However, this is not actually often the case. Far from being a cost-burden, today’s software can be scaled according to the size of the firm and deployed rapidly, helping to reduce time-to-value.
This should be welcome news for those who have been living with the legacy of bespoke and out-dated software. On top of being expensive to develop, old products require updates to remain secure and often rely on the expertise of just one or two in-house technology specialists. Newer solutions, in contrast, are recognised and used throughout the sector, undergoing continued development to eliminate security threats.
Furthermore, incorporating such technologies allows SMEs to act like their bigger counterparts, using business intelligence (BI) to automate key tasks.
More broadly, software can improve workforce capacity by freeing up senior members of staff to focus their efforts on more worthwhile tasks and in turn boosting productivity.
In a global economy, UK logistics firms must work harder than ever to compete with both their domestic and overseas rivals. Although the level of digitalisation depends on the size of the business, firms will have to adapt to give themselves the best chance of success. Tier One companies are driving these changes, which means any logistics firm that’s not currently harnessing the power of Industry 4.0 needs to act soon or face losing out and getting left behind.
For more details on how to adopt Industry 4.0 into your business strategies, read Access Group’s free guide, Industry 4.0 User Manual for SMEs.