The supply chain is a critical component of every business and automating logistics not only offers short term benefits but also positions an organization in this era of digital transformation. Business leaders continue to make their cases about the state of supply chain automation¹ but unfortunately, progress has been slow with most businesses using manual processes.
Consequently, businesses face cost constraints in managing supply chains and a report from McKinsey puts agrees to this by stating that supply chain automation is a long shot for companies. The big question then becomes: Why are businesses facing hurdles in streamlining their supply chains through automation processes?
However, one thing is clear: demand for flexible, accurate and nimble supply chain logistics² is on the rise. As consumer and client bases continue to grow at rapid rates, supply chains will need to adapt to larger, more complex methods of information and product transportation. However, there are many time-consuming processes that go along with managing a successful supply chain.
Here is where automation steps in. Time-wasting processes can fall into automated workflows, and human employees can spend more time forecasting, analyzing trend data and developing relationships with clients. With so many benefits to adopting automation, it may come as a surprise that a recent study shows that most companies do not use technology to monitor their supply chain performance³.
Assessment of Supply Chains in 2020
The COVID-19 pandemic has proved that the retail economy is becoming more e-commerce based, meaning orders shipped directly to consumers from large distribution centres have increased. This effect has encouraged the e-commerce industry to invest in automation technologies.
Supply chain technologies are becoming more prominent in business processes and it seems that automation alongside machine learning and artificial intelligence are the future of #Industry4.0⁴.
The recent pandemic has thrown many challenges into the procurement and supply chain sector and proved that technology would be essential for successfully implementing social distance and risk mitigation in warehousing and distribution⁵.
AI-based automation within warehouses is extensive. The opportunities for implementing such technologies is becoming readily available, from mechanical arms that can sort and handle cargo to #intelligentsoftware capable of calculating daily stock rotations.
How Does Automation Work in a Supply Chain?
Supply chains are complicated, but that is something of an understatement, is it not? If you consider all of the many moving parts of a successful supply chain, it is similar to studying the variety of processes that keep an organism alive.
Manufacturing and assembly providers create products that travel down the supply chain. These products go to warehouses where they are organized and stored, and then they make their way to their final destinations where clients receive them. All the while, vital data⁶ related to the supply chain’s performance is gathered and studied by professionals in order to further optimize the chain as a whole.
Supply chain automation seeks to accomplish the same thing. There are processes like picking and packing that gobble up valuable time employees could spend on higher-level tasks that require a human touch.
Supply Chain Patterns we Should Watch
Let us review some supply chain patterns in 2020 and understand future trends
1. Augmented Reality Technology
When the word virtual, or augmented, reality comes into play, most people think of the booming VR gaming industry. This tech has uses outside of letting you pilot giant #robots through space, however. Picking accuracy in the warehouse is one of them.
Imagine this: A customer orders a product, and a notification is sent to an employee that the pick and pack process is ready to start. The warehouse employee throws on a pair of augmented reality⁷ glassesthat immediately displays where the item is located and any pertinent information about it. If a complex order comes in, more information can be passed through the wearable to guide the employee to the most efficient path to take.
These types of wearables can also be used to help monitor the time employees spend traveling to and from products and managers can make adjustments as needed to help speed things up.
2. Global Economy and Trade Transformation
Things are a bit of a mess in the political realm right now, and these issues affect global supply chains around the world. As more tariffs are passed and varying trade wars continue, #supplychains need to be ready to react.
As things go back and forth, regulations could change at any moment. Disruption of supply chains is almost a given in this type of climate, as things keep moving supply chain managers should be on the lookout for sudden changes in the global environment.
3. Supply Chain adoption of Technology
As consumer bases continue to grow, supply chains can be expected to continue moving toward #digitalenvironments to remain competitive.
Obtaining visibility into your supply chains is quickly becoming a necessary criterion when considering how to run a successful chain. Older analog methods of data storage have been left in the dust along with the human errors that go along with them.
This valuable gold-mine of data is vital when looking for ways to improve the efficiency and accuracy of a supply chain, and those that do not jump onto this bandwagon are going to be left behind.
Major Hurdles Facing Supply Chains in 2020
Here are some common issues supply chains are running into today:
1. Identifying Customer Needs
If there is one universal truth about shipping, it is that customers want their products as soon as possible. Now that we live in the world of Amazon, customers expect quick and accurate delivery with stellar service should any problems arise.
According to a recent survey, nearly 20% of operations identified fluctuating customer demand as the biggest challenge they face. This number is only expected to rise, and consumer demand shows no signs of slowing down anytime soon.
2. Market Innovation and Understanding Trends
Regardless of where you stand, the global economy has been quite chaotic recently. Not only are all of the normal processes in a supply chain much more difficult on a worldwide scale, but there are a wide array of regulations an operation has to follow when working globally.
A supply chain needs to be very #agile and able to quickly conform to changing global requirements. When the future is as uncertain as it is in the current international market, you need to be able to change direction quickly.
3. Decisions about Channels
Right now, there is already an overwhelming number of options available when considering the order and delivery channels for your supply chain to leverage. A supply chain must have the ability to organize orders coming in from a wide array of channels without slowing down.
Possessing enough data visibility is another critical part of this issue. You need to be completely in tune with how your supply chain works in order to find the best possible channel to serve your operation’s needs.
Best Practices for Supply Chain Management
While many of us wish this were true, no one can tell the future. Sure, we may be able to forecast and make some educated guesses, but surprises are always lurking around every corner.
Sudden difficulties can damage an entire supply chain depending on what they affect. These types of problems can range from a bad storm knocking power out in an important area, fire at a manufacturer or something more mundane.
Damage from disaster can be mitigated, but speed has everything to do with it. An employee may receive a notification about a problem with a manufacturer and be able to forward it to the necessary people, but time is already being wasted.
Supply chain automation can put systems into place that immediately react to adverse conditions. If there is a problem at a manufacturing plant, an automated system could instantly place orders for integral equipment without having to run the request up the normal chain of command.
Suddenly, your supply chain is saving you hundreds of thousands of dollars when those critical parts jump in price after word of the slow-down reaches the rest of the world.
Not only are you eliminating the need for a team that monitors and reacts to situations like this, but you are also ahead of the game at the same time.
Supply Chain Automation is the Answer
Automation and intelligent business processes, created as a result of robotizing your supply chain, deliver responsiveness and agility. Through robotization⁸, you can seamlessly connect and automate sales, forecasting, replenishment, supply, planning, procurement, manufacturing and distribution activities.
This drives adherence and improved adoption of your critical enterprise applications without increasing headcount, allowing the business to do more with less. This makes process robotics an essential component to the continued success of the supply chain, and consequently, the growth and efficiency of the entire company.