Supply Chain Automation Guide: Staying Agile Through Change

Supply chain automation uses technology to streamline tasks, reduce errors, and improve efficiency in logistics and operations. By automating production, packaging, and inventory management, businesses can speed up processes and adapt to market demands more quickly. In this article, we'll explore how supply chain automation is transforming industries and the key disruptors driving its adoption.

What is Supply Chain Automation?

From manufacturing products to delivering them to customers, automation helps businesses speed up tasks, reduce errors, and improve their efficiency.

Say a company makes smartphones. Instead of manually tracking everything, like assembling phone parts and shipping them, the process is automated. Machines handle the production, robots help in packaging, and software keeps track of inventory and shipping.

In short, supply chain automation uses technology to handle tasks with minimal or no human involvement. It takes care of the complex processes behind the scenes, making things run smoother and more efficiently.

Amazon's warehouses are a prime example of supply chain automation in action. By using robots, AI, IoT, and other technologies, Amazon has transformed how products are stored, picked, and shipped. Not only has this sped up operations, but it has also allowed Amazon to handle an enormous volume of orders daily while minimizing errors.

Top Supply Chain Disruptors Today

Several factors can reshape and disrupt supply chains, making it important for businesses to adapt quickly to these changes. Here are some of the top supply chain disruptors:

1. Technology Disruptions: The emergence of new technologies like AI, IoT, and 3D printing has led companies that must quickly adjust to these new trends and changes to technological disruptions.
2. E-commerce and Consumer Expectations: Online shopping and demands for faster delivery are forcing supply chains to be quicker and more transparent.
3. Big Data and Analytics: The rise of big data and advanced analytics is disrupting traditional supply chains by shifting decision-making from reactive to predictive, forcing businesses to rely on real-time data to stay competitive.
4. Global Economic and Political Factors: Trade barriers, tariffs, and economic changes can increase costs and delay shipments, thus requiring flexible supply chains.
5. Natural Disasters and Pandemics: Pandemics like COVID-19 and natural events like hurricanes and wildfires can halt production and cause delivery delays, increasing the need for resilient supply chains.
6. Geopolitical Conflicts: Wars and trade issues disrupt shipping and manufacturing, while energy shortages can slow down production. A good example is when the Ever Given ship blocked the Suez Canal for six days in March 2021, affecting the global economy by roughly $60 billion in trade.
7. Labor Shortages: A shortage of workers, from truck drivers to factory staff, makes it harder to keep supply chains running smoothly.

Supply Chain Automation in Action

Now that you know what supply chain automation is and how it can be disrupted, let's look at some of the real-world examples of how supply chain automation is transforming industries:

1. Condition Monitoring

Logistics companies use Robotic Process Automation (RPA) to monitor products during transport, ensuring they arrive undamaged thus, reducing spoilage and boosting customer satisfaction.

For example, IoT devices track the condition of temperature-sensitive goods like food or medicine to maintain their temperature throughout the transport.

2. Warehouse Automation

Distribution centers use robots and AI to handle labor shortages and improve work efficiency. Automated systems are used to manage inventory, track products, and even operate heavy machinery.

For example, companies like Amazon use robots to streamline warehouse operations and cut costs.

3. Route Optimization

UPS uses an automated tool called ORION to analyze traffic & road conditions and optimize delivery routes. This helped them save fuel, reduce emissions, and speed up deliveries, allowing the company to save millions of gallons of fuel annually.

4. Inventory Management

Retailers use AI-powered automated inventory management systems for demand forecasting. These systems predict what's needed and adjust stock levels, reducing overstock or out-of-stock situations. Thus, they help businesses like Walmart keep shelves full while minimizing overstocking of products in the inventory.

5. Predictive Maintenance

Siemens uses IoT sensors to monitor production equipment and predict when repairs are needed. By scheduling maintenance before breakdowns, Siemens reduces costly downtime and saves millions every year.

6. Back-Office Automation

Maersk, a global shipping giant, uses automation to handle repetitive back-office tasks like invoice processing and customer communications. This helped them speed up the response time, reduce costs, and improve customer satisfaction.

7. Customer Service Automation

Companies like Zappos, Flipkart, and Amazon use automated order tracking to send real-time updates to customers via email or SMS. This ensures customers know exactly when their deliveries will arrive, improving customer experience and loyalty.

The above are some of the examples showing how supply chain automation can improve your business operations, making it a must-have change in your organization or company to boost productivity, reduce costs, and improve work efficiency.

Why Use Supply Chain Automation?

Although you now know the real-world applications of supply chain automation, the question, "Is supply chain automation needed?" still persists.

To help you answer that question, here are some of the reasons to include supply chain automation in your business:

1. Improved Efficiency: Automation can help speed up delivery processes, reduce manual errors, and boost productivity. For instance, AI-driven route optimization can guide drivers to avoid heavy traffic routes and make faster deliveries.
2. Enhanced Visibility: Automated systems provide real-time insights, allowing businesses to track shipments, inventory, and order status easily. For example, managers can make better decisions by using back-office automation to track metrics like shipment and inventory.
3. Better Accuracy: Automation minimizes human error, ensuring accurate data and smoother inventory management. For example, Coca-Cola uses automated inventory management to track stock levels in real-time, reducing overstocking and out-of-stock situations.
4. Better Predictive Analytics: AI and machine learning in supply chain automation help predict demand and optimize inventory. For example, automated tools like AI-powered chatbots can enhance customer service by offering real-time order tracking and support, improving the overall customer experience.
5. Cost Savings: By automating repetitive tasks like data entry and inventory tracking, employees can focus on other tasks that require their involvement, such as strategic planning and customer service. This leads to better resource allocation and cost reduction with better quality.

There are many more examples of how supply chain automation can benefit your business, but the above five should help you decide whether to incorporate supply chain automation into your business.

One of the instances is that the procurement team could start ordering products sooner to prevent shortages. More resilient supply chains with automated notifications for delays or lack of manufacturing capacity can help purchasing companies find alternate, temporary suppliers or choose to buy premium freight.

Trends in Supply Chain Automation

A lot is happening in the supply chain automation domain; here are some of the current trends that you should keep up with:

1. Digitalization: Companies increasingly use digital technologies like blockchain and edge computing to improve visibility and transparency in their supply chains.
2. Artificial Intelligence (AI) and Machine Learning: AI and machine learning are changing supply chains by improving forecasting and maintenance. Companies like Amazon's AI warehouse management systems use AI to plan and automate tasks.
3. Warehouse Automation: Warehouse automation is increasing, with companies like Amazon investing in robotics to make delivery operations more efficient.
4. Predictive Analytics and Real-time Visibility: Predictive analytics and real-time monitoring using warehouse sensors to monitor inventory in real-time make their supply chains more responsive.
5. Integration and Interoperability: Good supply chain management requires seamless integration between different systems, such as connecting suppliers and logistics providers, to improve data exchange and coordination.
6. Edge Computing and IoT: Edge computing and IoT devices enhance real-time data processing. Sensors in warehouses and on delivery trucks gather and analyze data on the spot, helping companies react quickly to changes and optimize operations.
7. Blockchain Technology: Blockchain is boosting transparency and traceability in supply chains. It allows companies to track and verify every step of the supply chain, improving inventory control and product authenticity.
8. Autonomous Vehicles and Robotics: The use of self-driving vehicles and robots is increasing, making operations more efficient and reducing the need for human involvement.
9. Cloud-Based SaaS Solutions: Cloud-based SaaS models are famous for their reliability and ease of use. They offer scalable and secure tools for managing supply chains, like inventory and order management systems. This shows that supply chain automation is evolving to create more agile, efficient, and responsive operations.

What to Look for in Supply Chain Automation Tools

If you have made your mind to incorporate supply chain automation into your business, then it's time to look for the tools available in the market. But, with the abundance of tools in the market, it can get hard to pick one for your need.

To make this choice simple, here are some of the key factors to keep in mind before choosing an automation tool:

1. Fast Integration: Choose tools that integrate easily with your current systems and platforms to see all your data and processes together without any complications.
2. Process Optimization: Look for tools that help identify inefficiencies and bottlenecks in your supply chain. Process mining capabilities can help you track before and after results where automation will have the most impact.
3. Cut down on development time: Opt for low- or no-code platforms. These allow quick customization and development of automation solutions catering to your business needs.
4. Real-Time Data Handling: Ensure the tool provides real-time data processing and visibility. This helps make timely decisions and respond quickly to supply chain changes.
5. Scalability: Select tools that can grow with your business. Consider features like parallel processing and support for increased workload and complexity.
6. Flexibility: Look for tools that support various automation modes, such as record & playback, manual scripting, and pre-built templates. This flexibility allows you to adapt to different project needs.
7. Advanced Analytics: Choose tools with strong reporting and analytics capabilities. Comprehensive reports and data visualization help you monitor performance and identify areas for improvement.
8. Cost and ROI: Evaluate the total cost of ownership, including licensing, implementation, and maintenance. Ensure the tool provides a clear return on investment by enhancing efficiency and reducing manual efforts.
9. Vendor Support and Community: Consider the vendor's reputation and support services. A strong support and active user community can do better troubleshooting.

In summary, find an automation platform with various tools like RPA and intelligent document processing (IDP), as well as no-code or low-code development and process mining. Make sure the platform can automate entire business processes.

Top 3 Real-World Supply Chain Use Cases

Still confused if supply chain automation is for you? Let's take a look at companies that did incorporate automation into their business and ended up with better results.

1. Coca-Cola Automated Warehousing: Coca-Cola uses automated storage and retrieval systems (ASRS) and automatic guided vehicles to enhance warehouse efficiency and accuracy. These technologies helped Coca-Cola streamline its inventory management and timely order fulfillment
2. Amazon's Warehouse Automation: Amazon has heavily invested in warehouse automation, using robots, AI tech and softwares to streamline their inventory management and order fulfillment. This automation has improved their efficiency, reduced human labor needs, and sped up delivery times.
3. UPS and ORION Route Optimization: UPS implemented ORION (On-Road Integrated Optimization and Navigation) to optimize delivery routes. This AI-powered system analyzes data to determine the most efficient routes, saving fuel and providing faster delivery.

Final Thoughts

In today's fast-paced world, supply chain automation is not just a competitive advantage—it's a necessity. By leveraging the right tools, companies can stay agile, respond to disruptions faster, and build more resilient supply chains.

Ready to take the next step?

Start exploring automation tools and strategies to keep your supply chain moving, no matter what challenges come your way.