Embracing Automation in Supply Chain Management
In the current business environment, automation is a critical component that enhances efficiency and effectiveness, especially in supply chain management. From automating data capture to warehouse operations, leveraging the Internet of Things (IoT), and utilizing predictive analytics, automation technologies are reshaping the way businesses operate and succeed.
Diverse Forms of Supply Chain Automation
1. Automating Data Capture
In the quest to enhance profitability, data automation is a game-changer. Data entry, one of the most labour-intensive and error-prone processes in the supply chain, involves processing numerous documents daily.
Data capture automation leverages technologies like Optical Character Recognition (OCR) to extract information from digital or scanned documents swiftly and accurately, significantly reducing manual labour and potential errors.
2. Automating Warehouse Operations
A significant number of companies (55%) are investing in warehouse robotics due to their numerous benefits such as enhanced productivity and order accuracy. They also minimise worker injuries as robots handle the heavy lifting.
Warehouse automation encompasses various machines like collaborative robots, smart forklifts, automated storage & retrieval systems (AS/RS), driverless vehicles, automated sortation systems, etc.
3. Internet of Things (IoT)
IoT devices can monitor stored goods, report on their location and condition, and share data. They are particularly useful for tracking goods sensitive to temperature or humidity, crucial in the food and retail industries.
While IoT devices require wireless networks (WiFi, Bluetooth) and trained staff to function correctly, the potential ROI from optimising inventories and reducing waste makes it a worthwhile investment.
4. Predictive Analytics
Modern supply chain management adopts a proactive approach as opposed to the reactive nature of legacy supply chain management. Predictive analytics plays a part in this by identifying future trends via data analysis. This increasingly popular automation technology has a wide range of uses from demand forecast to pricing strategy and inventory management.
Current Disruptors in Supply Chains
Global supply chains have faced multiple unexpected events in recent years, emphasising the importance of frequent scenario planning for adaptability in the face of risks. Here are some of the most common supply chain disruptions today:
Geopolitical Changes and Conflicts
Geopolitical changes and conflicts are currently at the top of the list. From the war in Ukraine disrupting major shipping lanes to dwindling output from Chinese manufacturing, companies are reevaluating their global supply chain choices.
The COVID-19 pandemic has upended international supply chains, with companies struggling to catch up ever since. As some nations sought to revitalise their economies by focusing on ESG (environmental, social, and governance) efforts, demand increased for certain raw materials.
Labour shortages continue to affect supply chains, causing a lack of shipping crews, long-haul truckers, among other challenges. This employee shortage affects more than just transportation and logistics.
However, scenario planning can only get you so far. The events that bring the most pain are often the ones you don’t see coming. A good example of this is when the Ever Given ship blocked the Suez Canal for six days in March 2021—this event cost the global economy roughly $60 billion in trade.
Practical Examples of Supply Chain Automation
Automation can play a role in nearly every part of a supply chain—from office tasks to customer service. Let’s explore examples of how supply chain automation applies to different business challenges:
Manufacturing Shop Floor Use Cases
Manufacturing companies have long adopted automation tools such as industrial IoT devices to improve production:
- Shop floor equipment with fixed automations or robots on an assembly line can speed up production.
- Automated reports for management provide greater visibility.
- Maintenance staff can use artificial intelligence (AI) to understand performance signals from smart devices and improve predictive maintenance.
Office Administration Use Cases
In an organisation’s managerial ranks, automation tools can speed up productivity across all sections of the supply chain:
- Supply chain planners can receive real-time demand signals from point-of-sale and eCommerce systems.
- Finance teams can reduce data entry around accounts payable and receivables.
- Customer service representatives can automate follow-up emails and case assignments.
Transportation and Logistics
Transportation companies play a critical role in the supply chain:
- Assign delivery drivers to specific routes.
- Scan goods and automatically send manifests to warehouses before delivery.
- Send delay alerts by tracking the GPS location of vehicles.
Strong customer service—whether B2B or B2C—has proven to be a critical factor:
- Routing calls to appropriate departments using case management technology.
- Sending automated emails with delivery status updates.
- Assisting on web portals where customers can check on orders.
Advantages of Supply Chain Automation
What are the top benefits that supply chain automation tools typically bring to an organisation?
For starters, automation helps improve production and delivery speeds. Automating repetitive tasks frees up employees to tackle higher-level tasks that require human intervention.
Secondly, automation improves transparency. For example, automating the sending and receiving of notifications allows warehouse teams to track whether deliveries have been made on time.
Moreover, automation reduces the risk of human error, which can lead to costly mistakes. By automating repetitive tasks, businesses can ensure accuracy and consistency in their operations.
Finally, automation can lead to significant cost savings. By reducing the need for manual labor, businesses can save on labor costs. Additionally, automation can lead to more efficient use of resources, further driving down costs.
In conclusion, supply chain automation is a powerful tool that can transform every aspect of a business’s operations. From improving efficiency and accuracy to enhancing customer service and reducing costs, the benefits of automation are vast. As businesses continue to navigate the challenges of modern supply chains, automation will undoubtedly play an increasingly important role in their success.
In the face of unexpected changes and disruptions, businesses that leverage automation will be better equipped to remain resilient and adaptable. Whether it’s geopolitical changes, global pandemics, or labour shortages, automation provides the tools necessary to navigate these challenges effectively.
So, whether you’re a manufacturer looking to streamline your shop floor operations, a transportation company seeking to improve delivery efficiency, or a retailer aiming to enhance customer service, supply chain automation has something to offer you.
Embrace the power of automation today and set your business on the path to success in the modern supply chain landscape.