People Innovation Excellence

Sustainable Supply Chain toward Industry 4.0

Supply chain is essential in production mechanism within manufacture industry in order to create sustainable development. However, applying this method is another challenge that needs to be solved during the transformation to industry 4.0. Shareholders and stakeholders need to prepare themselves in facing this transformation.

Denyse Julien, the Lecturer of Supply Chain from Cranfield University, defines sustainable development as development that meets the needs and aspirations of the present without compromising the ability of future generations to meet their own needs. “By using this definition, it can be implied that sustainable supply chain management is the management of the flow of material, information, and venture. This flow management is done together by all companies involved in the supply chain. The aim is based on the three dimensions sustainable development which are economic, environment, and social. Then, it is implemented into a plan which is based on the needs of customer and other stakeholders,” he said on “Supply Chain Challenges and Opportunities” panel discussion, held by Binus Business School and Cranfield University at JWC on Tuesday (5/10).

Denyse adds that the principal value of sustainable supply chain management is based on triple bottom line – financial growth, social advancement, and environmental management. Financial growth has to consider several factors, such as investment growth, value added products, customer perspectives, and innovation. On the other hand, occupation, infrastructure development, community support as well as defending the human rights and local community are factors that build social advancement. Further, decent biodiversity, emission reductions, water resources management, care for land degradation, and waste management considered as important for maintaining proper environmental management.

Denyse underlines the benefits that companies might gain after implementing sustainable supply chain management. Some of the benefits are better reputation, competitive advantage, earn new customers / develop new products, increase profits and reduce costs, improve disposal, increase the use of reusable or recyclable materials, emission reduction, reduce the use of toxic material, and improve employees’ satisfaction.

Moving toward Industry 4.0

Benny Tjahjono, the Lecturer of Supply Chain at Cranfield Universtiy who also speak during the discussion added that industry 4.0 has begun since the 2000’s, started by the usage of cyber-physical system. In this era, production process has surpassed the automate production process and the use of electronic systems which was started at industry 3.0 during the middle of 20th century.

In industry 4.0, smart machines begin to be involved in production process. Benny said that in this era smart products find their own way during the production process, as they are the ones directing the machines to properly process them. He then shows a video about the mechanism of cleaning liquid which has RFD chips on its bottle. This way, the bottle can communicate with the cleaning liquid filling machines.

“Every factory will get smarter and get connected, collaborating, controlling other machines and factories,” he said. Nowadays, the development of factories and supply chain are leading to smart factories and stakeholders must be prepared with the flexibility of conditions and technology.

Other notable speakers on this panel discussion are Anne Britt Bekken, a Supply Chain Executive at one of the companies in Norway; President Indonesian Production and Operations Management (IPOMS) Hariyanto Salim; Dwight Marshall Saluding, a Supply Chain Director at one of Indonesia’s private companies. On this event, Anne shared her experience when she managed the company’s supply chain in Norway. In addition, Hariyanto Salim and Dwight Saluding tells the audience regarding the macro infrastructure condition in Indonesia which is connected with the current supply chain situation.


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