Sembcorp Industries: Supply Chain Analysis and Industry 4.0 Impact

This report provides a comprehensive analysis of Sembcorp Industries' supply chain management, focusing on its evolution and adaptation to Industry 4.0. It begins with an overview of Sembcorp, its products, services, and key customers, followed by a literature review exploring the concept of Industry 4.0, its development from inception to the present, and its impact on supply chains. The report then replicates Szozda’s case study, comparing the traditional supply chain of Sembcorp with the new supply chain implemented after Industry 4.0, highlighting the advancements and efficiencies gained through technological integration. The analysis covers the flow of information, raw materials, and final products, emphasizing the benefits of Industry 4.0 in reducing costs, enhancing product quality, and improving the flexibility of production and distribution cycles. The study uses figures to illustrate the changes in supply chain processes, from the initial stages of manufacturing to the final delivery to consumers, demonstrating the shift towards more efficient and technologically advanced systems. The report concludes by summarizing the key findings and implications of the transformation of Sembcorp Industries' supply chain in the context of Industry 4.0.

Managing Operations and the Supply
Chain

Table of Contents
1.0 INTRODUCTION................................................................................................................1
2.0 KEY FRAMEWORK OF THE ORGANIZATION..................................................................1
2.1 Overview of the company......................................................................................................1
2.2 Main products and services...................................................................................................1
2.3 Major customers of the company..........................................................................................2
3.0 LITERATURE REVIEW..........................................................................................................2
3.1 Concept of industry 4.0..........................................................................................................2
3.2 Demonstrating development of the concept of industry 4.0- Inception to present................2
4.0 REPLICATING SZOZDA’S CASE STUDY...........................................................................5
5.0 CONCLUSION..........................................................................................................................8
6.0 REFERENCES..........................................................................................................................9
List of figures
Figure 1: Development of industry 1.0 to industry 4.0....................................................................3
Figure 2: Phases of industry revolution...........................................................................................4
Figure 3: Traditional supply chain of Sembcorp industries.............................................................6
Figure 4: New supply chain after industry 4.0................................................................................7

1.0 INTRODUCTION
Supply Chain Management (SCM) is the process of managing the entire operation from
arranging the raw material to supplying the final products and services (Jacobs, Chase and
Lummus, 2014; Christopher, 2016). This requires better integration between different parties
such as suppliers, companies, customers and producers etc. through which competitive edge of
the business can be obtained. In this regard, the current report is based on the supply chain
management of Sembcorp industries and development of industry revolution 4.0 in supply chain
system. For this purpose, a critical review has been done to analyze the industry revolution from
inception to today. At the end, a replication has been done for the Sembcorp industries on the
basis of Szozda’s paper and the process of supply chain has been reviewed from traditional way
to modern base.
2.0 KEY FRAMEWORK OF THE ORGANIZATION
2.1 Overview of the company
Sembcorp industries is an integrated energy player of Singapore which is a leading sector
of Marine, Utilities and Urban development group. The industry is a global energy transition
across main five continents. Moreover, the industry offers the solutions for the utilities of value
chain as well as energy systems and has major emphasis on the gas & power, merchant & retail
sectors and renewables and environment etc. Sembcorp industry has strong availability of total
assets over the figures of S$22 billion. Further, the industry is listed in the Singapore stock
exchange board and holding a leadership position in the urban development, marine and offshore
engineering of entire market place. Apart from this, the industry has strong and balanced energy
portfolio around 12000MW along with 9 million cubic metres of water on daily basis. Further,
more than 7000 employees are associated with Sembcorp industries (Sembcorp Industries,
2018).
2.2 Main products and services
Sembcorp industry has created a strong energy and product portfolio involving solar
power assets, thermal power plants, renewal wind, energy from waste facilities and biomass
energy etc. Moreover, mainly the industry deals in major four offshore and marine engineering in
four key sectors such as repairs and upgrades, specialized ship buildings, rings and floaters and

end sector is offshore platform etc. Besides this, Sembcorp industry has an integrated energy
platform through which it serves the customers by offering the energy and utilities value chain
(Sembcorp Industries, 2018; Sembcorp marine ltd, 2018).
2.3 Major customers of the company
Sembcorp has several customers such as industrial, municipal and the industry is known
as reliable provider of water and energy solutions for both types of customers. Moreover, the
industry also offers the energy services to regular customers along with long-term strategic
alliances, local enterprises and industrial sites. On the other hand, merchant and retailers are also
the customers of Sembcorp industries that are directly procured energy and water solutions for
further processing and end-use of the resources (Sembcorp, 2017).
3.0 LITERATURE REVIEW
3.1 Concept of industry 4.0
Industry 4.0 is the fourth generation of industrial revolution which expanded from normal
to advanced technologies (Szozda, 2017). It is a collaborative name of technology which is given
on the basis of recent trends of automation, exchange of data in different industries such as
manufacturing, transportation, communication etc. (Drath and Horch, 2014). Moreover, Stock
and Seliger (2016) stated that the industry 4.0 involves several key sectors like cloud and
cognitive computing, internet of things, cyber-physical systems etc. The technology has been
converted into more advanced machineries, flexibility, rapid than older automation,
manufactures the high-quality products and services which is helpful to maximize the number of
customers by expected delivery of goods (Szozda, 2017). Apart from this, autonomous robots,
simulation, big data and analytics, cyber security etc. are the major pillars to build the industry
4.0 (Boston consultancy group, 2018).
3.2 Demonstrating development of the concept of industry 4.0- Inception to present
According to Lee, Bagheri and Kao (2015), in industry 1.0 all the workings of factories
were based on the manual machines which are operated by the hands instead of energy and
power. In this context, the companies were dependent on the steam engines to manufacture the
products; here, in industry 4.0 the factories it become less dependent on the manpower due to
development in the technologies, production of a large number of quantity of goods and services

by using equipment (Lee, Kao and Yang, 2014). In this regard, Lasi et al. (2014) stated that
development in technology is helpful for the organizations and manufacturing companies
because it maximizes the quality of products as well as satisfy the customers by offering the
demanded and high-rated products. Besides this, Szozda (2017) argued that industry 4.0 is not
only helpful to enhance the manufacturing capacities, even it also has positive impact on the
supply chain of companies. By improvement in technologies, the organizations became more
efficient supplier of goods and services in a quick manner along with minimum time and cost
perspectives (Almada-Lobo, 2016). It shows that the industry revolutions have been developed
from normal technologies to additional aspects and affects the business supply chain
management. Further, the dependency on workforce has also been reduced in the factories
through upgradation in technologies.
Figure 1: Development of industry 1.0 to industry 4.0
(Source: Weidmüller Interface GmbH & Co. KG, 2018)
In the year of 1900, industry 2.0 has been emerged with greater expansion in the
technologies in comparison to industry 1.0. In this phase, the use of technologies has become
smarter to work and mechanical production has been changed for the manufacturing of goods in
more soft way than industry 1.0 (Liao, Deschamps, Loures and Ramos, 2017). In this regard, Xu,

Xu and Li (2018) mentioned that in industry 2.0, there was no greater innovations has been taken
place although the upgradation has developed new chances and opportunities for the companies
to perform better and reduce the manual work at a large extent. By considering the additional
requirements, a new industry revolution has been developed in 1970 which is knows as industry
3.0. In industry 3.0, machineries have been deployed on the place of manual operations and
electronics as well as computer embedded technologies has been emerged in the manufacturing
and supply chain processes (Weidmüller Interface GmbH & Co. KG, 2018; refer figure 2).
Besides this, Contreras, Garcia and Diaz (2017) asserted that the third generation of industry
development was associated with computerized technology which has a major contribution in the
improvement of product quality. Furthermore, robotics has been used by the factories to enhance
the production process along with implementation of further changes in the organizations.
Therefore, it reflects that the changes in industry 2.0 to 3.0 has immense effects on the product
quality and supply chain system because it has reduced the time span of supply chain and
maximizes the product quality by adopting modern technologies.

Figure 2: Phases of industry revolution
(Source: Deloitte AG, 2014)
Apart from all of these, the current era is the scenario of industry 4.0 which is more
advanced in technology and intelligent system of networks that are emerged to bring the required
changes in the industry (Ivanov, Sokolov and Ivanova, 2016). Moreover, the fourth generation is
associated with developments in software technology, mechatronics, networking and electronics
etc. (refer figure 2) (Brettel, Friederichsen, Keller and Rosenberg, 2014). By reviewing the
aspects of industry 4.0, Deloitte (2014) asserted that fourth generation has occurred the changes
in physical system as well as information flows in the supply chain. Moreover, the entire
processing of production, purchasing and distribution has changed the supply chain processing.
However, Jacobs, Chase and Lummus (2014) argued that industry 4.0 has occurred the different
key issues in the supply and transformation in the digital world due to data theft as an effect of
long-distanced wireless networks. On contrary, Szozda’s (2017) asserted that industry 4.0 is

helpful in producing the low-cost and quality products and minimizes the waste in production
cycles. Furthermore, flexibility in production and distribution cycle of goods and services has
been improved to a great extent (Roblek, Meško and Krapež, 2016). Hence, it shows that the
emergence of industry 4.0 is beneficial for the organizations because it has major contribution in
all aspects of the goods and services such low cost products, higher quality, greater advancement
in technologies. Moreover, it enhances the flows of information and data in supply chain.
4.0 REPLICATING SZOZDA’S CASE STUDY
Figure 4 and 5 of Szozda’s case study has been replicated in context of Sembcorp
industries’ supply chain which is provided in the respective case study of Szozda’s of industry
4.0 and its impact on the functioning of supply chain. Supply chain of the company reflects the
free flow of information and the processing of receiving the raw material, goods and services and
final products from origin to end users (Szozda’s (2017). In this context, a traditional supply
chain of SembCorp industries has been described for the reproduction of energy products before
the implementation of Industry 4.0 as follows-
Figure 3: Traditional supply chain of Sembcorp industries
(Source: Szozda’s, 2017)
According to figure 4, the supply chain starts from the manufacturers and ends with customers
before implementation of industry 4.0 in the Sembcorp industries. The company had followed a
set of standards for the transition of energy supplies in the competitive marketplace. Owing to
the figure 4, it has been examined that the information flows from manufactures to suppliers and
on the basis of those information, suppliers provides the material to manufacturers. Moreover,
the production of energy remains in continuous process and perform all the activities in a line
such as suppliers> manufacturers> distributers> retailers> customers. On the other hand, product

flows from suppliers to final consumers with completed process and estimations regarding
farecasting of the energy sales as solar energy, bio energy etc.
For example, for the biomass energy, Sembcorp industries used to receive the data from
manufacturers that they can deliver the required product on time with adequate quality or not. If
they found that manufactures are supportive then further processing tend to took place. In this
context, the suppliers for the bio energy may include coal and fuel suppliers, material suppliers,
containers suppliers for the producing the bio energy etc. On the other hand, suppliers deliver the
bio energy to different reliable distributors which are known as mediators and they demand for
the commission to deliver the products to retailers. At the end, the retailers would sell the
biomass energy products to urban consumers for the final use in factories. Therefore, it shows
that traditional supply chain of Sembcorp is quite lengthy and consume more time from
production to final delivery of the bio energy as well maximizes the all over cost.
Owing to the scenario of traditional supply chain of Sembcorp industries, a new technology has
been implemented to cut the supply chain to increase the efficiency (refer figure 5 of cited in
Szozda’s, 2017). For this purpose, industry revolution has been accepted by the respective
company in the form of industry 4.0 in the supply chain as follows-
Figure 4: New supply chain after industry 4.0

(Source: Szozda’s, 2017)
There is a significant difference between traditional and new approach of the supply
chain that information not only derived from the retailers but also might be collected from the
products. The product provides the data regarding consumer behaviors, demands so that future
research and development can be done as per the collected data of the products. By considering
this, Sembcorp can change the supply chain process from traditional way to advanced manner by
adopting the different types of equipment, new suppliers and distributors and retailers etc. so that
risk and negative impact on the business might be minimized. In this context, by applying
industry 4.0, for bio energy, Sembcorp has varied suppliers including material suppliers,
contractors related to engineering, construction and procurement and original equipment
manufacturers etc. and all the suppliers will be upholding by code of ethics of business
(Sembcorp, 2017). Apart from this, with the help of the industry 4.0, different distribution
channels are considered for the supply of bio energy so that time as well as cost associated with
the supply chain can be reduced to a great extent (Szozda, 2017). Further, produced bio energy
can be stored in warehouses and stock management for the future use. However, this facility was
not existing in the traditional approach of supply chain. Finally, on the basis of customer’s
information, the energy is be produced and the entire system has been changed.
5.0 CONCLUSION
On the basis of report, it has been identified that industry 4.0 has brought several changes
in the supply chain of the industry; Sembcorp because the traditional supply chain was so
lengthy and takes more time to deliver the products from manufacturers to end users. Further, it
has also been concluded that industry 4.0 has tremendous impact on the image of the company
and companies can effectively increase the efficiency of operation through the equal focus on the
quality as well as quantity of the products and services. Further, it can be summarized that the
revolution has been started from 1780 with the involvement of steam engine whereas in the
currently it reaches at advanced machinery, technologies and equipment for the better
productivity. On the other hand, with the help of the Szozda study, has been found that industries
accepting rapid changes in the supply chain management.

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