Asia Pacific Metalworking Equipment News is pleased to conduct an interview with Mr. Ashish Pujari, GM & VP Digital Supply Chain & Manufacturing – Asia Pacific & Japan at SAP on his views on the future of supply chain networks and manufacturing technologies.
1.Could you provide us with an overview of the latest technologies shaping the manufacturing industry and its associated supply chain networks in Asia?
Manufacturing has already begun to go ‘smart’ with Industry 4.0, where we see automation, intelligent machines coupled with smart sensors and IoT devices embedded along the production line. The future of production will not only be fully automated and connected but also have the ability to self-diagnose issues and optimise production capability. In this regard we see the possibility of an automated end-to-end supply chain, fully managed by smart manufacturing robots, driverless cars/drones and digital shop assistants.
With the tremendous volume of data becoming available, manufacturers will be able to optimise operations quickly and react accordingly to areas that require attention. For instance, the need to regularly conduct machinery maintenance, which typically causes a halt in production and incur cost, is no longer required with smart sensors notifying operators when maintenance is needed.
What sets the manufacturing and supply chain advancement rate of Asia apart from the other regions is the amount of expected IoT investment with IoT playing the critical role in making the above initiatives possible. According to IDC, Asia comes up on top in terms of IoT spending (US$291.7 billion) having accounted for more than 40 percent of the total worldwide expenditure this year with these connected devices being largely used for manufacturing operations.
2. What do you think are the main challenges when it comes to the digitalisation and integration of supply chains with manufacturing processes in Asia? With the digitalisation of manufacturing, how will supply chains evolve to keep up? How do you think these challenges can be overcome?
Traditionally, companies approached supply chain management in terms of increasing efficiency and driving down costs. In a complex, globalised, digital economy, the supply chain of yesterday is not up to the task of meeting constantly shifting demand and increasingly complex supply networks. For a digital economy, what is needed is a digital supply chain that is characterised by its ability to be fast, nimble and intelligent enough to profitably serve segments of one. This is however, just one half of the picture with the other half being the demand chain
Industry 4.0 solutions and new manufacturing techniques (such as addictive manufacturing) play a strong role in sustaining a strong demand chain where the production of products is based solely on demand. The decrease in waste and obsolescence will lead to an overall reduction in cost for organisations.
Upon digitalising the supply and demand chain silos, the main challenge will be to connect the both of them in a seamless manner. The integration of demand and supply chain synchronizes the key processes in terms of front-end development, product planning, product design, procurement, manufacturing, sales and marketing, maintenance activities based on customer needs as process routines. The first step manufacturers must take is the establishment of a digital core in order to handle the tremendous volume of data becoming available and translate them into actionable insights. Next, a top-to-bottom, soup-to-nuts approach that brings each application under the same umbrella must be taken. This is typically done with the assistance of a technology solutions provider that offers solutions for both silos and a proven track record of successful implementation.
3. In your opinion, what are the trends that will shape the industry for the next 5 to 10 years?
Supply chain sustainability becomes good business: Cost efficiency and sustainability can now be achieved simultaneously with the help of technology. In an ideal world, manufacturers will see all of their products end up in a customer’s hands. In reality, the overproduction of products leads to unwanted and unused products being dumped at the bottom of a landfill. By digitalising the supply chain, manufacturers will be able to increase sustainability by reducing or even eliminating over-production and standing inventory. Not only does this reduce overall cost, it also saves our environment. At the same time, having end-to-end visibility enables businesses to tap on the shared economy network and achieve seamless connectivity across the entire supply chain. For example, working with third-party delivery services to cover last-mile delivery.
Rise of the Intelligence Enterprise: To reap the benefits of Industry 4.0 fully, we expect to see more organisations transforming into Intelligent Enterprises. An Intelligent Enterprise effectively uses data assets and machine learning to automate routine tasks, to achieve desired business outcomes faster and with less risk. To this end, businesses need to invest in three key areas – an intelligent suite, intelligent technologies and a digital platform. SAP’s solutions are designed to help businesses leverage these and transform into an a smart, best-run Intelligent Enterprise.
Connecting the physical and digital world through Digital Twins: The attachment of IoT sensors to assets and equipment will enable organisations to connect them within a network and form “digital twins”. This will provide businesses total visibility as products are designed, manufactured and deployed with real-time data sharing between customers and suppliers.
In today’s context, this is important because businesses are facing increased competition and need to meet the expectation of shorter product cycles, accelerated responses times and flexible manufacturing. At the same time, customers expect fully configurable, smart products too. Through leveraging embedded intelligence from the data of a fully connected network, businesses will be able to make better decisions and break new ground with open innovation.
Blockchain goes mainstream: Blockchain can positively impact everything from warehousing to delivery to payment due to its ability to increase the efficiency and transparency of supply chains. There is no dispute in the chain regarding transactions because all entities on the chain have the same version of the ledger and records on the blockchain cannot be edited. Due to such offerings, it comes as no surprise when IDC predicted that blockchain spending will grow at a CAGR of 81.2 percent and hit a total spending of US$9.2 billion in 2021.
Delving deeper into the distribution and services sector, we foresee strong interest from the pharmaceutical industry in the adoption of blockchain. Fake drugs are a US$30 billion problem and according to the World Health Organisation, one in 10 drugs sold in developing countries are fake or substandard, leading to thousands of deaths. Bogus drugs are a growing threat as increased pharmaceutical trade, including Internet sales, open the door to sometimes toxic products. With blockchain, the flow of stolen or counterfeit pills entering the supply chain and causing harm to patients can be stopped.
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