What does Industry 4.0 mean to Supply Chain?

TLDR

Industry 4.0, the fourth industrial revolution, is defined by IoT‑enabled smart factories where interconnected machines autonomously exchange data and control each other. The study aims to analyze how Industry 4.0 affects the entire supply chain, from order dispatch to product end‑of‑life, to improve transparency. The mechanism involves machines autonomously determining each product’s process, variation, and unique configuration, enabling the product to be tracked as a distinct active entity throughout the line.

Abstract

The term 'Industry 4.0' was coined to mark the fourth industrial revolution, a new paradigm enabled by the introduction of the Internet of Things (IoT) into the production and manufacturing environment. The vision of Industry 4.0 emphasizes the global networks of machines in a smart factory setting capable of autonomously exchanging information and controlling each other. This cyber-physical system allows the smart factory to operate autonomously. For instance, a machine will know the manufacturing process that needs to be applied to a product, what variation to be made to that product etc., so that the product can be uniquely identifiable as an active entity whose configuration and route in the production line is unique. As the collaboration between suppliers, manufacturers and customers is crucial to increase the transparency of all the steps from when the order is dispatched until the end of the life cycle of the product, it is therefore necessary to analyze the impact of Industry 4.0 on the supply chain as a whole.