80% of manufacturers believe IoT will improve supply chains

Posted on 6 Apr 2018 by Jonny Williamson

Four in five UK manufacturers believe "Smart Factory" technologies will improve their supply chain relationships, according to the latest Annual Manufacturing Report.

The Annual Manufacturing Report 2018 demonstrates conclusively that new digital technologies are becoming increasingly important.

Manufacturers accept that the future of (successful) manufacturing lies in the adoption of advanced technologies classified as Industry 4.0, or 4IR.

The wider strategic issues are dealt with in the Industrial Digitalisation section of this report. The AMR 2018 has looked at what benefit these technologies will bring to those who invest in them.

For quite a while now, the message has been going out from OEMs and other companies of significant size that their suppliers must “get with the 4IR programme” if they want to remain in the supply chain. That at least is what we have heard when interviewing CEOs of prominent companies about it.

The message may be one of commercial reality, but there is often a hint of take-it-or-leave-it in the way it is delivered, that once again large companies were dictating the terms and smaller companies just had to suck it up.

We wanted to see if this was a reality, which is why we characterised the first choice in the way we did, to probe what is often alleged by smaller manufacturers to be overly-controlling behaviours by their large customers.

Refreshingly, 80% see the impact of digital technologies on the supply chain as beneficial; in other words that the claim of supply chain “bullying” is exaggerated.

Admittedly, large companies do make up 30% of the demographic of our respondents, so one would expect the positive view to be weighted accordingly, yet the overwhelmingly positive response is encouraging.

The core benefit of 4IR technologies is the ability they offer manufacturers to monitor, and act upon, data flowing from connected machines.

IoT (Internet of Things) sensors pour data into locally- and cloud-based computers where the data is crunched almost instantly to provide a moving, real-time picture of manufacturing processes.

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