INDUSTRY 4.0 AND ITS IMPACT ON THE FUNCTIONING OF SUPPLY CHAINS

Background: There is an increasing use of automation, data processing and exchange, cyber-physical systems, Internet of things and cloud technology in industry. Modern factories undergo constant transformation, which has impact not only on the organization of manufacturing activities, but also on the functioning of supply chains. The model of contact with the end customer, who frequently moves into the virtual world, is changing, which directly translates to the formation of distribution channels. The occurring changes are referred to as the Fourth Industrial Revolution, and we are its eyewitnesses. This paper explores the challenges for modern supply chains that arise as a result of the fourth industrial revolution. It attempts to answer the question to what extent the Industry 4.0 affects the organization of products and information flows in supply chains.

Methods: The article makes use of the results of social research, whereas the applied research technique was a survey conducted among 122 supply chains. Moreover, the results of the research performed in 2015 by McKinsey in the form of an interview with 300 experts from production and service companies from USA, Japan and Germany were demonstrated. Additionally, the following 5 case studies were presented: Logistics Knapp AG, Nova Chemicals, BMW, Stratatys and Bosch.

Results: One of the research results of the article is a review of the literature on the development of the supply chain concept, as well as on the development of industry, with particular focus on the Fourth Industrial Revolution. The article attempts to determine the impact of the Fourth Industrial Revolution on the functioning of contemporary supply chains. On the basis of social research and case studies, conclusions are drawn about the significance of application of the assumptions of Industry 4.0, as well as about the concerns of companies and entire supply chains regarding the inevitable changes. Finally, a hypothetical supply chain using the assumptions of the Fourth Industrial Revolution is presented on the example of a manufacturer of electric toothbrushes.

Conclusions: On the basis of the collected examples and presented research, it can be concluded that the idea of Industry 4.0 is not foreign to contemporary companies and has an influence on the organization of physical and information flows in supply chains. Managers are aware of the changes occurring in the organization of production, procurement and distribution processes in the entire supply chains. However, they are concerned about transferring processes into the virtual world, due to data security issues and capacity of long-distance wireless networks.