Impact of Industry 4.0 on Fashion Supply Chain Management
Shubham Anil Jain
Department of Textiles (Fashion Technology)
DKTE’S Textile & Engineering Institute, Ichalkaranji, India
Intern at Textile Learner
The first industrial revolution which was introduced, was based on machine work and development of steam power plan in 1784. The second industrial revolution was started in 1870, with assembly line production and used of electricity as well as mass production started. In this revolution the use of computers and robots for production has taken place. Finally in the year of 2013 we experienced the fourth industrial revolution which is based on technological advancement. Industry 4.0 is the newly developed concept in which all manufacturing processes are changed from traditional method to advance technological based manufacturing process. The root of industry 4.0 concept is in Germany in 2011. The concept is based on various technologies and advancements such as internet of things, smart factory, big data, and cyber physical system. Industry 4.0 is basically focusing on the internet which is the most important factor in our day to day life. This concept develops the virtual reality which is important in the view of current pandemic situation.
This Industry 4.0 concept are impacting on every management area. It also impact adversely on the supply chain management (SCM). The concept of supply chain is originated in German literature, where it is referred as delivery chain, logistics chain, supplying chain or value chain. Supply chain is working on seven principles of management. As we know Supply chain consist of procurement, manufacturing, warehouse, logistics and fulfillment. Industry 4.0 is also making huge impact on all above level of supply chain. Although it has impact on SCM, but also gives some benefits to supply chain management like achieving greater transparency and accuracy, decision making which leads to cost saving, increase the interconnectedness and collaboration, improves the warehouse management, and greater agility. The corresponding concepts and technological advancements such as Automotive 4.0, Logistic 4.0 and Education 4.0 have based on Industry 4.0 which capture and analyze the real-time data (RDT).
Key Technologies in Industry 4.0
1. Internet of Things (IoT):
The Internet of Things (IoT) refers to a system of interrelated, internet connected objects that is able to collect and transfer data over a wireless network without human interaction. A ‘thing’ can bereferred as connected medical device, a biochip transponder, a solar panel, a connected automobile with different sensors that alert the driver to a myriad of possible issues (fuel, tire pressure, needed maintenance, and more) or any object, outfitted with sensors, that has the ability to gather the things and transfer data over a network. IoT is an innovative approach of merging the data obtained from different kinds of things to any virtual platform on existing internet infrastructure. For the first time concept of IoT was used for coke machine which send information about drink and whether the drink were cold.
Technology Related to IoT:
a) Radio frequency Identification (RFID): It is a type of microchip similar to an adhesive sticker which could be of both active and passive type. Here active tags have battery attached to them and therefore it can continuously emit signals whereas passive activated by external rays when they triggered on it.
b) Wireless sensor Network (WSN): It basically refer to group of spatially dispersed and dedicated sensors for monitoring and recording the physical condition of the surrounding and it organizing the collected data at a central location.
c) Cloud Computing: This technology uses the internet and control remote server to maintain data and application. It allows consumer, business, education institute etc. to use this application without installing costly software in their computer. This application allows all the employees to log into a web based service which hosts all the kinds of programs the user would need for his or her job.
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2. Big data:
Definitions- “Big data is high volume, high variety and high velocity information assets that demand cost-effective, innovative forms of information processing for enhanced insight and decision making”. -Gartner IT Glossary. N.d.
Similarly “Big data is a term that describes large volume of high velocity, complex and variable data that require advanced techniques and technologies to enable the capture, storage, distribution, management, and analysis of the information.” -Tech America Foundation.
The concept of big data are mainly depend on three V’s which are described below-
a) Volume: It refers to the magnitude of data. Big data size are in the number of multiple of terabytes and petabytes.
b) Variety: Variety refers to the structure heterogeneity in a database. Technological advancement in organization allows use of various types of data like structure, un-structure data.
c) Velocity: Velocity is the rate of speed in which data is generated and speed to analyze it and taking action on that.
3. Smart factory:
Definition- “A smart factory is simply a manufacturing solution that provides such flexible and adoptive production process that will solve various problems that arises on a production facility with dynamic and rapidly changing boundary conditions in the world of increasing competition”. The technical foundation on which the smart factory or intelligent factory is based on cyber physical systems that communicate each other using internet of things and services. The smart factory gives the special solution in automation, combination of various software, hardware and machines. In the other aspects it could be seen in a perspective of collaboration between different industrial and non-industrial partners where the smartness comes from forming a dynamic organization. Smart factory mainly consist three things namely as follows interconnection, collaboration and execution.
4. Cyber Physical System:
Definition- “Cyber-Physical Systems (CPS) are considered as integrations of computation, networking, and physical processes. In this system, embedded computers and networks monitor and control the physical processes, with feedback loops where physical processes affect computations and vice versa.”
A five-level architecture for the various tasks involved in CPSs that work in manufacturing is defined by data scientists. The levels break out this way:
a) Connection: In this level, the data generated by connected machines, tools and products is gathered so it can be pushed up through the next levels.
b) Conversion: This level converts data to information using various algorithms that are based on the application.
c) Cyber: The cyber level receives processed information from its below level and uses it to create additional value. This level serves as the hub for information and performs complex analytics.
d) Cognition: The cognition level is able to convert machine signals to health information and compare this information with other instances of it. In cognition level, the machine itself should take advantage of online monitoring to diagnose its own potential failure and correct it.
e) Configuration: In this level a machine is able to track its own health can detect failures early on and send health monitoring information to the operation level. This type of maintenance information can serve as feedback to the business management systems.
5. 3D Printing:
It has seen that the Fourth Industrial Revolution is said to have extensive dependency on 3D printing technology. Some advantages of 3D printing for industry are that 3D printing can print many geometric structures, as well as simplify and modify the product design process and it is relatively environmentally friendly. In case of low-volume production, it can also decrease lead times and total production costs. Overall, it can increase flexibility, reduce warehousing costs and help the company towards the implementation of a mass customization business strategy. In addition, 3D printing can also be very useful for printing spare parts and installing it locally, therefore it reduces supplier dependence and reducing the supply lead time.
6. Smart sensors:
It is proved that the sensors and instrumentation drive the central forces of innovation, not only for Industry 4.0 but also for other “smart” megatrends, such as smart production, smart mobility, smart homes, smart cities, and smart factories. Smart sensors are the devices, which generate the data and which allow further functionality from self-monitoring and self-configuration to condition monitoring of complex processes. With this capability of wireless communication, they reduce installation effort to a great extent and help to realize a dense array of sensors. The importance aspects of sensors, measurement science, and smart evaluation for Industry 4.0 has been recognized and acknowledged by various experts all over the world and has already led to the statement “Industry 4.0: nothing goes without sensor systems.”
Impact of Industry 4.0 on Fashion Supply Chain Management
The 4th industrial revolution came up with automation, robotics, Internet of Things (IoT), big data, machine learning, artificial intelligence, as well as analytics and cloud computing system which changed the way of doing business and management. There is also an impact on supply chain industry, which is undergoing a transformation, adopting digitization, automation, and centralized business intelligence systems. Let’s understand the impact of industry 4.0 on each component and aspect of supply chain management.
1. Planning and Execution:
Planning and execution stage in supply chain management (SCM) particularly focuses on end-to-end process and keeping a balance between supply and demand. But because of industry 4.0 these decision have becomes more data driven and the integration of automated end-to-end data aggregation solutions, which will be a game changer in deciding the more practical approach. The concept of integration and digitization of supply chain operations eliminates the pits in organization and make it easy for decision makers to respond in real time. Whether there is a shortage of raw materials, adapting to a changes in market dynamics or customer preferences, identifying the root cause or problem of inefficiency in routine operations, gathering market requirement to do forecasting for the future, a digital supply chain are stay on top of it all with minimal need for human interaction. To achieve the effective supply chain there is a need to have effective ERP system and integrated monitoring and tracking solutions can handle daily operations of the organization.
Procurement can vary according to the demand of the customer, plant manufacturing and holding capacity and supplier management, contract management, supply analytics, strategic sourcing which is commonly known as supplier landscape. By adapting the industry 4.0 concept all demand data are track live using IoT. Live demand data are get from different prospective such as point of sale, Inventory data from the store, data from holding facility, data information from in transit raw material which are procure from suppliers which all are integrated are help in streamline the procurement facility. By implementing this type of integration manufacturer is no longer necessary of safety stock or buffer stock.
In today’s scenario, from MRP to ERP evolution, the next development stage is e-Procurement. Various technological advancement such as e-Business, Internet and supply chain management revolutionary used of technology, gives easily integration to the suppliers. Now we are experiencing the Procurement 4.0. It is a next step of revolution of procurement system which is more in automation and advancement than earlier e-Procurement system. Procurement 4.0 deals with high degree of digitization and ultimate automation and make highly integrated procurement system which build the good suppliers relationship.
Manufacturing is one of the most important factor of the supply chain and it consumes more time as well as cost and also need human interaction to manufacture the final product. But now by utilizing Industry 4.0 this problem is reduce.
Industry 4.0 gives some of the advantages as follow-
a) Increase productivity: with the automation, machine learning algorithms, robotics and analytics have reduced the human efforts to do the same work with low time and high accuracy in the finish product. With this the use of human workers are only limited to monitoring and maintaining the system.
b) Increased the profit as well as revenue: Industry 4.0 is not only helps to increase the efficiency of the manufacturing unit but it also help in the preventive and predictive maintenance and update whenever is required. Because of this there is reduction in the capital investment required for manufacturing units and increase the profitability and revenue of the company.
c) Manufacturing process optimization: With more connectivity, networking, shared data and better analytics, closer collaboration along the entire supply chain becomes possible and easy, which could lead to increased efficiency, optimization in resources and innovation in the long run across the manufacturing industry. Machine-to-machine communications and integrated systems will lead to greater collaboration among producers, suppliers and other stakeholders along the value chain.
d) Record keeping and tracing is getting simple: The use of cloud computing technology and big data the storing of machine data are getting very easily and make it comfortable to all. It help to analysis any type of data of any machine at any location.
Logistics and transportation have great impact because of digitization in supply chain management and industry 4.0. Because of this the tracking of shipment is getting easily for the supply chain managers. It proves beneficial for supply chain managers for optimizing routes, fleets, and field asset utilization are done in real time. The advantages of automation in logistics is reduced the human efforts and interaction. Automated logistics management systems improves and enhance the responsiveness to changes that affect throughput, ETA, unnecessary overheads like fuel costs, and the ability to hit narrowing windows of delivery, especially for last-mile logistics. Nowadays, Logistics 4.0 concept are related to the innovation and application which are used in logistics system are added by cyber physical system. It contains smart product and smart services which is driven by technology and this approach is used to define “Smart Logistics”.
Logistics 4.0 are depends on some technological applications-
- Warehouse management,
- Resource planning,
- Intelligent transportation system,
- Transportation management,
- Information security
In the era of industry 4.0 warehouses are work on autonomous advancement based. It includes the automatically control of the major task performed in the warehouse like space management, order tracking and picking, inventory tracking and management, ordering, etc. The use of automation is to simplify and reduced the labour work which is boost the efficiency and reduce the operational overheads. When it is coupled with end-to-end supply chain there is a visibility solutions for inbound or outbound logistics, smart warehouses can anticipate the inflow of goods and space requirements, requisition assets like personnel or pallets, and update enterprise inventory holding and throughput levels in real time. For tracking the inventory and for managing the inventory system there is use of new technologies like augmented reality (AR) can help to increase the efficiency.
A Model for Integrating Fashion within the Industry 4.0 Paradigm
Textile and apparel are deeply rooted in the history of human kind, which represent the ideal archetypes of the transition of many artifacts from replying to basic needs to becoming nowadays “semantic prosthesis”, cultural mediators. Therefore, it is especially interested to look at this context throughout the transformation occurred within the first three industrial revolutions and the future implications of the ongoing forth one. Generally, starting in the United Kingdom in late 18th century, the water and steam powered textile industry became a major engine of the European and North American industrialization. With the evolution of electrically powered infrastructure in the early 20th Century the apparel industry became a prominent player of the second industrial revolution, largely utilizing the mass market production model. It was widespread in Western countries with increasing level of mechanization and innovations,transforming all processes, from spinning to sewing. Again the development of international trade agreements with growing economies, such as the Asian ones, increased this process and opened the space for extensive delocalization dynamics. Finally, in the third industrial revolution the electronically controlled production system was developed which was considered as key factor in speeding fashion industrial globalization, with the CAD, CAM systems allowing data exchange by standardized software languages.
Already since the early 2000s, experiencing the impossibility of controlling products quality and reliability, many popular brands have already started extensive and complex reshoring operations. Additionally, all the different types of companies with a major involvement of mass market brands started to face dramatic environmental and social costs in the countries of their operations which surprised the public opinion. As per the forecasting, the following sections will introduce the main paradigmatic changes which will affect fashion, embracing the concept of I4.0 as the combination of “smart factories” + “smart networks” + “smart products”. Based on this combination, this integrates into triple structure all important processes, business units and components charactering fashion industry. Hence the “Factory” sphere is populated with Prototyping and collection Sampling, Production floor and Logistic; the Networks sphere is populated with Supply-chains Management, Retail and Communication; the Products sphere is also populated with Packaging, Products and their Surplus Management and finally, Research, Design and Product Development, centrally positioned, function as the ideal connection among the three components.
Challenges of Industry 4.0 on Fashion Supply Chain Management
The predicted scenarios of Industry 4.0 developments differ greatly. There are those who assumes Industry 4.0 as solutions to the current issues, and those who think that Industry 4.0 will only advance these issues. However, it is important to know that the course of Industry 4.0 has not been defined yet. The success or failure greatly depends on the course of actions taken today and in future.
1. Changing business paradigms:
The changes and modifications to the value chain require companies to accept new business models and partner with other companies, including suppliers, technology companies and infrastructure suppliers. It would not be shocking if companies would have to partner with firms they once saw as competitors, e.g. when helping to establish new regulatory frameworks, standards or training methods. In addition, companies will have to invest large sums into new machinery, software, business model development, etc. If the current industrial leaders do not respond or accept to those changes and adopt these new business paradigms, they may soon find themselves in the replaceable role of mere suppliers.
2. Safety and security:
Throughout the supply chain as data is collected, questions of data ownership will arise. It is very important point for any company that their data won’t end up in the hands of a competitor. Another concern is for manufacturers regarding cyber security: it is important to ensure that they cannot be infiltrated and that their factories cannot be taken over or cut off. On the other side,it must be ensured that the production facilities themselves do not pose a risk to humans or the nearby environment, and that the workers receive continuous safety trainings.
3. Legal issues and IP:
Having many individual use, modify and produce new data, will result in huge legal issues. It is important that the new manufacturing processes and business models should relate with the existing laws. However, it is equally important to accept the existing regulations so that they do not destroy innovation while protecting all of the stakeholders.
In order to fully implement Industry 4.0, correct standards have to be developed and established, to look for the correct data exchange between machinery, systems and software. Exclusive data and communication protocols will inhibit the full potential of Industry 4.0 by limiting compatibility of products from other companies or regions and thus increasing the integration costs or suppressing competition and promoting potential monopolies. Collaboratively developed and agreed standards for various aspects such as communication protocols, data formats and interfaces facilitate interoperability across different companies, sectors and regions, and promote the adoption and sustainability of Industry 4.0 technologies
5. Work organization and design:
One prominent aspect of Industry 4.0 is the way it will change the workplace. Nowadays, intelligent machines are becoming smarter and cheaper, which enables human workforce to focus on less repetitive and more challenging tasks. However, this shift will bring along certain threat and demands. According to the European Parliament it is said that the employee roles will change across content, processes and environment. Flexibility, work time, demographics as well as health and private life will all be affected by Industry 4.0. Such developments will also impact the essence of certain jobs and skills profiles.
Starting from a synthesis of I4.0 framework and principles it has showed their impacts on business units, processes and components within the specific context of the fashion industry. Although the advancement of Industry 4.0 is not yet widespread, but it has huge potential to penetrate and improve many aspects of human life. Starting from changes in business paradigms to the manufacturing process models, it will have impact at all levels of production and supply-chains, including business and production managers, factory workers, cyber-physical systems designers, customers, end-users etc. Industry 4.0 is still in development stage. The implementation of industry 4.0 is considered as the connection between human, machines and object to formed self-actualizing real time system, and also crate cross company value chain which impact on the entire supply chain. Industry 4.0 also add some benefits in supply chain management. However, the big mistake is unwillingness to take part of these changes, because the future of Industry 4.0 is not yet clear to anyone and its success or failure totally lies in the hands of all the stakeholders.
- International Research Journal of Engineering and Technology (IRJET): The Study of Industry 4.0 and Its Impact on Supply Chain Management by, Devendra A. Patil.
- Impact of Industry 4.0-Changing Scenario in Apparel Industry by, D. Anita Rachel, S.CHAKRAVARTHY.
- Fashion 4.0. Innovating Fashion Industry Through Digital Transformation by, Teuniss e n, José a n d Bertola, Paola.
- Industry 4.0 Challenges, Trends, and Solutions in Management and Engineering Edited by Carolina Machado and J. Paulo Davim.
- Industry 4.0 and Its Impact on the Functioning of Supply Chains by, Natalia Szozda Wroclaw University of Economics, Wrocław, Poland.
- Understanding Supply Chain 4.0 and its potential impact on global value chains Michael J. Ferrantino (World Bank Group) and EmineElcinKoten (World Bank Group).
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Founder & Editor of Textile Learner. He is a Textile Consultant, Blogger & Entrepreneur. He is working as a textile consultant in several local and international companies. He is also a contributor of Wikipedia.