The logistics industry must demonstrate its Industry 4.0 expertise, says Rhenus UK
According to a 2016 study conducted by the Engineering Employers’ Federation (EEF), just 30% of UK manufacturers have a strategy for Industry 4.0 (4IR) in place. Here, David Williams (pictured below), managing director of Rhenus Logistics UK, explores how the freight industry is already leading the way in embracing the core concepts of 4IR – and what it can teach adjacent sectors.
The value of actionable data has been apparent to many leading logistics businesses for some time, with a number of big industry players already having robust 4IR strategies in place. However, these same businesses aren’t sharing this capability and knowledge with their customers or the wider industry.
4IR is an increasingly key concept for the manufacturing sector, so logistics providers should work with customers within this industry to ensure businesses are well equipped to meet the challenges and opportunities ahead.
At the forefront of big data
At its very essence, 4IR is the interpretation of large amounts of data and converting it into a simple command. The logistics industry has a well-deserved reputation for sitting ahead of the data curve. As a sector, we are adept at managing data to report on product flows wherever they are in the world.
However, logistics businesses don’t always appreciate their leading position. It’s important to remember that our customers, especially those working within the manufacturing sphere, could learn a lot from our experience and knowledge. Indeed, our history of embracing the key tenets of 4IR means the logistics sector is uniquely positioned to influence the debate surrounding Industry 4.0.
Rhenus case study – Control tower
The use of actionable data isn’t new to Rhenus Logistics. Indeed, our Freight Industry Solutions team in Germany has been recognised for its pioneering work in this area.
Rhenus’ smart sourcing solution actively monitors and manages the complete transportation and flow of information, the processes, the suppliers and the logistics partners. Key to the successful implementation of this concept include the Rhenus Supply Chain Connect (RSCC) web-based communications platform, the control tower and the standardised management of partner businesses. Furthermore, all of the procedures, ranging from order management to accounts settling, are handled fully automatically.
The control tower identifies and takes action against disruptions before they become disruptive. The faults that occur are documented in a ticket system, assessed and then remedied at source using a standardised partner and supplier management system. As a result, our supply chain is totally transparent and maintained in such a way that logistics costs can be easily analysed and reduced if necessary.
Fighting cyber crime
It won’t have escaped notice that the freight industry was hit by a number of high profile cyber-attacks last year. Although undoubtedly worrying, these malware attacks should not deter logistics businesses from embracing 4IR.
Indeed, the roll-out of Internet of Things (IoT) technology across the supply chain will play a primary role in safeguarding the sector’s future. Although there are certainly questions surrounding security which must be answered, achieving end-to-end supply chain visibility is the primary goal.
Perhaps the biggest barrier for businesses seeking to embrace Industry 4.0 is that there’s a lot of misunderstanding surrounding the term and what it actually means. Whether it’s called 4IR, IoT or machine-to-machine technology, it’s all referring to the same thing – usable data.
No matter the term you know it by, one thing is certain – Industry 4.0 is absolutely crucial to the future of the freight forwarding and logistics industries. A recent study undertaken by consultancy PwC* revealed that while 50% of respondents said that the use of data was very important for their business today, 90% said it would increase in three years’ time. A further 65% of companies surveyed were in agreement on the importance of investing in Industry 4.0, believing it would provide significant ROI within two years.
The PwC report makes heartening reading indeed, but it’s important to remember that it reflects the views of senior managers at global businesses in manufacturing and logistics. The broader industry must now embrace the potential of Industry 4.0. It’s also important to ensure that the perceived risk of cybercrime doesn’t stymy the adoption of Industry 4.0, but to understand how to make sure networks are secure.