Supply Chain

Optimize supply chain management with smart manufacturing technologies

By February 3, 2021
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While the success of the modern supply chain depends on a number of factors, there’s one that recent market trends demonstrate is more important ever: efficiency.

Increased consumer demand, coupled with expectations for faster order fulfillment, have made it essential for warehouse and supply chain management teams to streamline their operations for optimum efficiency in order to stay competitive. Disruptive developments like warehouse automation and voice-controlled technologies have greatly increased the efficiency of many supply chains, but demand has, in recent years, risen to the point that order fulfillment teams need to be operational 24/7 to avoid losing business to a competitor.

This results in something of a predicament for warehouse managers. Supply chain optimization requires that they streamline operations using new technologies, but adequately vetting and testing various vendors and solutions can hinder a warehouse’s capacity to fulfill orders.

To overcome this hurdle, many supply chain management teams are now employing advanced warehousing technologies and Industry 4.0 technologies to overcome this challenge.

What is Industry 4.0?

Industry 4.0 involves the Industrial Internet of Things (IIoT) and smart manufacturing. In essence, Industry 4.0 combines on-the-ground physical operations with smart technologies, machine learning capabilities, and big data. Ultimately, Industry 4.0 technologies provide broad-based, real-time visibility into a supply chain’s entire suite of logistics assets, empowering companies to optimize their manufacturing operations and supply chain management for greater efficiency and responsiveness.

smart manufacturing technologies woman at workstation
Industry 4.0 technologies enable supply chain management teams to configure and test elements like floor plans, spikes in seasonal demand, warehouse automation, workflows, and more, in order to optimize the site’s capacity, efficiency, and performance before any changes are made on the warehouse floor.

McKinsey has found that simulation technology, for instance, when used effectively, can increase warehouse efficiency by as much as 25%, and Gartner also predicts that half of all industrial companies will use simulations to design their facilities.

How Industry 4.0 can optimize supply chain management

The strategic efficiency improvements afforded by these advanced warehousing technologies are numerous. Manufacturers can use these technologies to simulate ideal production output versus warehouse throughput to prevent overproduction, or to gain greater visibility into the resources necessary for improving warehouse efficiency.

In addition to enabling faster order fulfillment times, smart manufacturing software can use the detailed asset and resource data it collects for testing warehouse scenarios to improve inventory management practices. This would enable the creation of a “smart factory,” allowing manufacturers and supply chain managers to determine the most efficient way to allocate which stock to reserve and which to keep moving through specific workflows or channels.

Some systems can model at larger scales, thereby providing opportunities for network optimization as well. Manufacturers and warehouses can model transportation solutions and distribution centers to determine the most efficient and profitable arrangements, including which strategic partnerships with third-party vendors would prove most beneficial.

Gaining the accurate, real-time visibility enabled by these technologies requires hardware and software infrastructures capable of supporting its projections, which may require a significant investment for some companies. It also demands the creation of a conceptual framework of the business that will be stored virtually. Several rounds of development may be necessary to determine the combination of assets, resources, measurements, and other factors to be stored in order to guarantee that companies can access the business insights necessary to optimize operational efficiency.

The role of the Virtual Warehouse™ in shaping the future of manufacturing

Another factor critical to accelerating the modern supply chain is the Virtual Warehouse™, a cloud-based tool able to store and organize countless digital designs and production specifications. The Virtual Warehouse enables the production of parts on an as-needed basis, otherwise known as on-demand manufacturing.

Digital manufacturing technologies like 3D printing and CNC machining create parts from digital files, so anyone with the file and the proper equipment and resources can create the part, regardless of their location. As a result of Virtual Warehousing, production can be brought closer to the point of consumption, which streamlines the supply chain and may reduce the need for on-the-ground logistics providers.

Rather than shipping a potentially heavy part to a distribution center to be transported, for example, a business can send the digital file to be manufactured closer to its destination. Considering more than two-thirds of U.S. manufacturers use additive methods in some capacity — including for an increasing number of final-part applications — the potential for increased localized production could prove disruptive to logistics and transportation providers.

UPS was one company quick to turn this challenge into an opportunity. Currently, less than 10% of the company’s revenue comes from warehousing and shipping manufactured pieces — the majority of these parts being spare copies of critical components that need to be delivered as quickly as possible. By renovating its air cargo facilities in Louisville, KY and Singapore to include 3D-printing capabilities, UPS reduced lead time for its manufacturing clients, and can even manufacture and ship some parts in the same facility on the same day. Fast Radius is proud to have partnered with UPS in the creation and operation of these facilities.

Other organizations are taking note: in 2020, Pittsburgh International Airport partnered with University of Pittsburgh on a new initiative to streamline the additive manufacturing supply chain by enabling on-demand production and shipping directly from a new airport-based facility. In doing so, the facility cuts lead times and accelerates fulfillment — a goal that Fast Radius is pioneering with its cutting-edge Virtual Warehouse platform.

Storing assets and resources in a Virtual Warehouse centralizes information in the cloud, providing manufacturers with instant visibility into project specifications and enables on-demand production — which ultimately streamlines operations and gets products into the hands of end-users faster.

Smart manufacturing technology offers efficiency for the supply chain of tomorrow

Industry 4.0 technologies offer efficient means of not only optimizing workflows and inventory management within physical warehouses, but also streamlining manufacturing and supply chains through digital manufacturing tools like the Virtual Warehouse. These solutions provide valuable real-time insights that can help cut labor and production costs, reduce lead times, bring production closer to the point of consumption, fulfill orders faster, and boost profit margins.

Fast Radius is a team of passionate designers and engineers who specialize in on-demand digital manufacturing. We work closely with each of our customers during production, from design to fulfillment, and even provide manufacturing innovation services, including access to our own advanced, proprietary Virtual Warehouse. Contact us today to get started.

Visit the Fast Radius resource center to learn about what additive processes and on-demand manufacturing have made possible, as well as about the other manufacturing services we provide and where you can find real-world applications of our work.

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