Impact Of Industry 4.0 On The Supply Chain Operations: A Critical Evaluation Of Huawei's Essay.

You will conduct a review of the literature in the subject area commonly referred to as “Industry 4.0”.  Specifically, you are to identify the origins of the concept of the Fourth Industrial Revolution and to chart its development up to the present day.

Following your review, you are to critically evaluate the impact of Industry 4.0 on the supply chain operations of a company of your choice.

You will be expected to illustrate your discussion with examples from academic journals, the trade press and other authoritative sources.

Assessment Breakdown

1.Establish the scenario for your report by selecting an organisation of any type, sector and size to focus your report on. Describe:

1. a) Which organisation is it? (type, sector and size)
2. b) What are the main products and/or services provided by the organisation?
3. c) Who are the main customers?

2.Prepare a literature review, charting the development of the concept of the Fourth Industrial Revolution from its inception until the present day.

Ensure that you include references to at least 10 peer-reviewed articles, including the 2017 paper by Szozda that has been supplied. You may also find relevant reviews in the trade press and from other authoritative sources.

3.Replicate Szozda’s case study (as illustrated by Figures 4 and 5 in the supplied paper) in the context of your chosen company.

How will the company change?

An Executive Summary and a proper conclusion is required.

Please, use the Harvard Referencing System. Not less than 15 no. of references.

Not to overcomplicate your answers by choosing a company that you know little about. Keep to simple processes that you know well.

Look at the Check list at the end of this brief. It shows the subheadings to use and offers a guide as to how the marks will be distributed.

Your assignment must be word processed and presented in a report format with simple sub-headings. The word count should be 1750 words (executive summary, tables, diagrams and appendices are excluded from the count).  

The learning outcomes being addressed through this assignment are:

1.Interpret key concepts, managerial frameworks and techniques available to operations managers so as to enable strategic decision making processes.

2.Demonstrate conceptual and practical understanding of the opportunities and constraints that organisational characteristics place on operations managers and on operational decision making in the supply chain context.

3.Demonstrate ability to relate theory to practise and critically assess organisational problems in order to design specific responses to address the issues identified.

Huawei Technologies Co. is a multinational telecommunication-equipment and consumer electronics company founded in 1987 in China by Ren Zhengfei an ex-military officer as a private company with an aim to offer consulting and operation services. The company thus initially majored on the sales of switches and later constructed research center that enabled to research and develop C&Co8 telephone switches, provision of fixed-line networks and LTE in other international markets (Carrillo & Micheli, 2017, p.2). The company currently is one of the leading providers of integrated solutions in various domains: IT; smart devices, telecom networks; and cloud services. Huawei currently employs more than 180, 000 employees across more than 170 countries. The company’s customers entail all levels of income earners and genders expect children; the company has devices that can be bought by the rich and the poor, as well as the simple and the sophisticated. The company’s largest markets for the products are China, India, United States, Indonesia, Brazil, and Russia among others.

 Human civilization has been changing on the daily basis resulting in the transformation of the technical and technological development of production in the industries thus known as the industrial revolution. Industries have undergone through three revolutions and currently are at the fourth revolution known as industry 4.0. During the 18^th century from 1784-1870, industries underwent the biggest revolution from the agricultural economy and handmade based product creation to automated extensive industrial production thus known as the first revolution (Hutchinson &Dowd, 2018, p.658).

During the first revolution, industries were characterized by extensive use of water/steam/ coal powered machines for the human and animal labor and were common in Britain that was common with textile industries. Watt steam engine was the most common technical production system during the first revolution and gave more autonomy to manufacturing than the water and wheel engines (Howe, 2016, p.899). For example, the Watt steam engine exposed facilities to less environmental factors such as droughts and floods since was mostly located far away from the rivers and; opened the way for more efficient steam engine across all branches of the economy (Taylor, 2017, p.194). The economic scenario of Britain was stable based on the uninterrupted industrial revolution as well as the availability of coal, assured the production of food and wool enhancing intense ultramarine trade to external markets.  As the ingenious men were inventing solutions to productivity problems, the technically skilled men worked hard to improve the solutions through simple scientific knowledge and less amount of money. The industrial revolution was as well promoted by the growth of population during the 18 century creating demand for goods as well as labor supply in the farms. The two factors encouraged the widening of the economy and social life during the advancing decades, for example, the introduction of proletarian class, who depended majorly on the salary only; separation of personal life and work; development and growth of urban cities; continuos subordination to the factory system with clock rigidity.

The second revolution took place from 1870 to 1969 with the introduction of new energy; electricity alongside mass production. The second revolution was led by the United States and through the invention of the new energy source, numerous industries were introduced such as chemical, steel, and railroads that ensured large production of goods through interchangeable parts and assembly line (Yao & Lin, 2016, p.1669). The large production of good during the period resulted into fall of the prices as supply was bigger than demand, thus so many people had the capability to buy the goods. The created market encouraged more production, however, the process was rigid thus changing the production steps cost the production process in terms of time and money. The mass production period in the United States enhanced immigration across the world in search of unskilled labor that enhanced the growth of the natural population as well. During the second revolution, the living standards of a human being were improved extensively.

Literature Review

The third revolution took place between 1969 and 2015 and is characterized by the extensive application of microchip technology and information technology to facilitate the creation of goods in the United States and Asia (Martinelli, 2017, p.12).  The advancement of the internet, computers, chips among others impacted massive investments access all sorts of organizations and movements. During the period, both the planning and manufacturing of the goods were no longer manually executed rather an IT automated series of activities were used instead thus resulting into the adoption of Advanced Manufacturing Technologies(AMT)  Computer Aided Design(CAD)and Computer Integrated Manufacturing (CIM) among many others. The objective of these models was to have a flexible, faster, accurate and customized production system that would accurately respond to any change of demand and supply of goods (Huang, Mokasdar, & Hou, 2013, p.1193). During this period, the demand of goods fall as a result to the inflation, thus forcing companies to become more efficient in production to reduce cost as well as increase the sales of goods and services, thus called for advanced operation strategies to help the industries from falling.

Industry 4.0 from 2015 to date is characterized by the digitalization and is characterized by mass production of goods with a limited number of product groups and personalization facilitated by the Cyber-Physical System (Szozda, 2017, p.402). CPC entails both the physical and cybernetic systems that help in manufacturing thing in both physical and virtual thus enables development of autonomous production process based on double representation and intelligent.  The intelligence in the CPS is evenly distributed in every production step to ensure the operations stability and flexibility (Celaschi, 2017, p.99). The development of the fourth industrial revolution has enhanced the supply chain technologies to enable the movement of product from the manufactures to the consumers, movement of information from the customer to the manufacture and between the relevant stakeholders. The smooth movement of information and resources in a more efficient and effective way has reduced the cost of production and transportation with the availability of robotic machines.The CPS is based on the internet systems and artificial intelligence have facilitated exponential growth of the processing power, network bandwidth, search engines among many others.

The growth of numerous businesses depends on the supply chain that entails the marketing and sales, both inbound and outbound logistics operations that ensure that the products reach the targeted customers who are local and international markets. The conventional manufacturing system at Huawei was more kind if discrete manufacturing. In the discrete manufacturing, the material goes through different processing of materials to produce distinct products that are easily identified and composed of different parts as well as can be reduced to the various components as shown in figure 1. This ensures that all the broken materials of the Huawei products are recyclable.

As indicated earlier, the role of the fourth industrial revolution is to keep flexibility and elasticity of the systems such as supply chain to respond to the conscious upcoming changes that need easy removal of products to meet the demands of the production (Choudhary, Nayak, Malik & Singh, 2018, p.48). The Huawei new supply chain models include; Smart Manufacturing and Smart Transportation.

First Revolution

The new manufacturing system that adopts the fourth industrial revolution system has the capability to change the production system of the company. The networked and distributed production system of the Huawei has the capacity to leverage the production to the manufacturing of the products to be more efficient. For example, the adoption of man-machine interaction augmented reality, and the three-dimensional visualization technologies enable the production of the products that are of the customer's interests. The Huawei thus through the installation and upgrading of existing machines with networked sensors,  production process, deployment of Big Data, and optimum application of large volumes of data generated machines are so significant in transforming the production system of the company(Fernández, Fraga, Suárez-Albela & Díaz-Bouza, 2018). The model will ensure that all the products are of good quality, optimum production efficiency, and safety.

The networked systems facilitate the wireless communication between the short and long distance within the company as well as facilitate an efficient unified data transmission between the machines and the cloud data centers. The combination of this, ensure the provision of service-centric and integrated manufacturing cloud systems that aid the production staffs to exploit the computing and storage of Big Data(Mohelska  & Sokolova, 2018,p.2238).  Since Huawei is a multinational company, it is capable now to provide each warehouse and retailer with specified products that are of great interest of the local customers, thus improves the sales of the company. Consequently, in the mechanical engineering, the adoption of the service model through the provision of engineering design and assistance as a professional service to the customers is significant in transforming the company to a more manufacturing service entity as shown in figure 2 (Bányai, 2018). Through this, the company is capable of providing real-time engineering data such as status, location, recording centers and drumming data that are essential in identifying any fault and provide the best way to rectify such faults for the continuous production of products. Unlike the conventional method that information is tracked through the ERP systems, Huawei is capable to update the inventory, orders, and demand on a daily basis without the confusion of information.

The use of Internet of Things technologies in Huawei, there will be a reduction of production cases such as harmonies accidents that results into injury and long-term environmental effects since it is easier to control rules through the sensors and communication. The Application of the IoT has the capacity to reduce the information asymmetric thus saving human resource labor. Through the IoT, Huawei is capable of customizing the production, design, promote the products as well as delivery; thus customers have the capability to adjust their order specifications even after the submission of the order request unlike in the tradition that was difficult to change the order after submission. Additionally, the customization of the products allow the customers to receive their products with the shortest period of time like one week

On the supply chain, with the use of all the elements of the fourth industrial revolution, Huawei Company can facilitate the operations through the use of Blockchain; that will enable the company to increase the transactional transparency of the mobile devices. Through the adoption of this, the company is able to limit the cost and at the same time improve the operational models through every point of operation (Haraburda, 2017, p.658). The blockchain will improve the supply chain of Huawei by improving the reception and analysis of the transactional data that can be assessed by all the stakeholders to ensure that the data is accurate and true. Since the data is accessible to all the stakeholders and is not controlled by any entity, the use of blockchain in the supply chain thus helps in reducing the ambiguity and deception. Through the system, Huawei is capable to track down the movement and transportation of the products through the use of IoT, thus reduces the loss of products due to theft while being shipped across the borders. In conclusion, the use of industry 4.0, Huawei is capable to project the future sales based on the demand and the customers are provided with expectations in relation to the delivery system.

Conclusion 

Huawei Technologies Co. is a multinational telecommunication-equipment and consumer electronics company founded in 1987 in China by Ren. Huawei used the conventional supply chain to grow globally through the stages of the industrial revolution; the customer needs are complex that needs clear information sharing and product production. Through the use of industrial 4.0, Huawei is capable of growing more than the current size since it will appeal to all customers.

References 

Bányai, T. (2018) ‘Real-Time Decision Making in First Mile and Last Mile Logistics: How Smart Scheduling Affects Energy Efficiency of Hyperconnected Supply Chain Solutions’, Energies (19961073), 11(7), p. N.PAG. doi: 10.3390/en11071833.

Carrillo Viveros, J. and Micheli Thirión, J. (2017) ‘Huawei y Foxconn: casos pioneros de la nueva intemacionalizadón China y su impacto regional en México’, Estudios Sociales: Revista de Investigación Científica, 27(50), pp. 2–15. doi: 10.24836/es.v27i50.409.

Celaschi, F. (2017) ‘Advanced design-driven approaches for an Industry 4.0 framework: The human-centred dimension of the digital industrial revolution’, Strategic Design Research Journal, 10(2), pp. 97–104. doi: 10.4013/sdrj.2017.102.02.

Choudhary, S, Nayak, SK, Malik, A & Singh, DK. (2018) ‘Important Issues in Supply Chain Management and Development’, International Journal of Recent Research Aspects, 5(1), pp. 45–54. Available at: https://search.ebscohost.com/login.aspx?direct=true&db=aph&AN=129311330&site=ehost-live (Accessed: 8 December 2018).

Fernández-Caramés, TM, Fraga-Lamas, P, Suárez-Albela, M & Díaz-Bouza, MA (2018) ‘A Fog Computing Based Cyber-Physical System for the Automation of Pipe-Related Tasks in the Industry 4.0 Shipyard’, Sensors (14248220), 18(6), p. N.PAG. doi: 10.3390/s18061961.

Haraburda, S. S. (2017) ‘SUPPLY CHAIN MANAGEMENT Maturity Level Assessment’, Defense Acquisition Research Journal: A Publication of the Defense Acquisition University, 24(4), pp. 656–681. doi: 10.22594/dau.16-772.24.04.

Howe, A. (2016) ‘State versus market in the early historiography of the industrial revolution in Britain c.1890–1914’, European Journal of the History of Economic Thought, 23(6), pp. 897–918. doi: 10.1080/09672567.2016.1211158.

Huang, S, Liu, P, Mokasdar, A & Hou, L (2013) ‘Additive manufacturing and its societal impact: a literature review’, International Journal of Advanced Manufacturing Technology, 67(5–8), pp. 1191–1203. doi: 10.1007/s00170-012-4558-5.

Hutchinson, M. and Dowd, K. (2018) ‘The Apotheosis of the Rentier: How Napoleonic War Finance Kick-Started the Industrial Revolution’, CATO Journal, 38(3), pp. 655–678. Available at: https://search.ebscohost.com/login.aspx?direct=true&db=aph&AN=132150661&site=ehost-live (Accessed: 8 December 2018).

Martinelli, M. (2017) ‘Photons, Bits and Entropy: From Planck to Shannon at the Roots of the Information Age’, Entropy, 19(7), pp. 1–32. doi: 10.3390/e19070341.

MOHELSKA, H. and SOKOLOVA, M. (2018) ‘Management Approaches for Industry 4.0 - the Organizational Culture Perspective’, Technological & Economic Development of Economy, 24(6), pp. 2225–2240. doi: 10.3846/tede.2018.6397.

Szozda ,N.(2017) ‘Industry 4.0 and Its Impact on the Functioning of Supply Chains’, Scientific Journal of Logistics, 13(4),pp. 401-414. Available at https://dx.doi.org/10.17270/J.LOG.2017.4.2

Taylor, D. F. (2017) ‘Frederick Burwick, British Drama of the Industrial Revolution’, Romanticism, 23(2), pp. 192–195. doi: 10.3366/rom.2017.0326.

Yao, X. and Lin, Y. (2016) ‘Emerging manufacturing paradigm shifts for the incoming industrial revolution’, International Journal of Advanced Manufacturing Technology, 85(5–8), pp. 1665–1676. doi: 10.1007/s00170-015-8076-0.