World Class Supply Chain

2017 – An Open letter to CEO’S on Digital Transformation and Industry 4.0

513209389If you really want to make America great again you need to pay attention to the terms Digital Transformation and Industry 4.0.  Why?  Most jobs are not lost because of immigrants; they continue to be lost due to advances in Information Technology (IT).  IT is growing in colossal leaps and bounds and is now a key differentiator between companies winning and losing.

Here are a few examples:

According to Gartner there were 1.5 billion smartphones in the world in 2014. The world is a more connected global economy

  • Tesla, a leader in Industry 4.0 – , Take a look at this video. And don’t even get me going about Auto pilot!     
  • Tractor Truck Drivers (the 6th largest profession in the USA with almost 2 million drivers) is already feeling the effects of auto pilot with Wal-Mart leading the way.

Why is the term Industry 4.0 so important?  As I’ve previously written in this article, it is the next evolution of Industry (or manufacturing):

  1. Industry 1.0: Water/steam power
  2. Industry 2.0: Electric power
  3. Industry 3.0: Computing power
  4. Industry 4:0: Cyber – physical Systems, Internet of things and cloud computing


Digital transformation creates a connected ecosystem with employees, suppliers, partners, distributors, and customers becoming interconnected with an integrated digital network linked to other networks around the world.

Where do you start?

The foundation of any Digital transformation is data. This is where it starts. Sure robotics is cool as well as 3D printing but both these Industry 4.0 tools require a very concise and well executed data plan. So your Digital journey will always begin with a review of how well your data is serving you.

Begin by removing simple and repetitive tasks.  A prime example is how Robots have replaced these types of activities on an assembly line. Once all the simplest tasks have been removed, then it’s time to review the next set of more complex tasks and remove those as a group.

Collaboration.  Data from any source can now be connected to integrate your entire company and provide mind blowing insights. Digital Transformation and Industry 4.0 also requires an ecosystem of employees and machines collaborating through blogs and other technologies. For example SAP has jumped on the bandwagon by embedding almost limitless data analytics in Apps that gives users much more information to make quick decisions in the Supply Chain. Also, in a recent meeting with one of the world’s most advanced Digital Transformation and Industry 4.0 firms, they demonstrated how they are able to take data from multiple sources (SAP, CRM, etc…) and integrate it all.  For example, they combined data from the world’s largest vendor catalogue to internal quality metrics in order to continuously measure which vendors provided the best quality. Pretty Awesome!

Start educating and hiring Data Scientists.  The companies that stay ahead of the game hire the best employees and provide a solid training plan. A data scientist makes sure the company’s data is serving the right people at the right time at the right place. S/he is responsible for how data is being used across the organization and eliminating duplicate efforts and ensuring data is coming from one source of truth.

Finally here are a few sobering  statistics from a McKinsey Paper on the amount of jobs to be eliminated through technology.

Within manufacturing, 90 percent of what welders, cutters, solderers, and brazers do, for example, has the technical potential for automation.

73 percent of the activities workers perform in food service and accommodations have the potential for automation, based on technical considerations.

53 percent of retailing activities are automatable.

86 percent of bookkeepers, accountants, and auditing clerks are automatable.

How do we make America great again and compete on a world stage? Digital Transformation and Industry 4.0!  Start learning about it, embracing it, prototyping it, and training for it.

Terry Vermeylen is hell bent on rapidly transforming your business into a World Class Operation by major transformation or by eliminating one bad habit at a time.

Terry Vermeylen brings 30+ years of experience in SAP and Supply Chain Process improvement. As an SAP professional and Supply Chain Architect he has worked and consulted for some of the world’s largest and most successful manufacturing companies focusing primarily on the Aerospace and Pharmaceutical industries as well as the US Military.

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