What is supply chain automation?
Supply chain automation is the use of digital technologies in supply chain management. Its goal is to increase efficiency, connect applications and streamline processes within the supply chain. Generally, the term encompasses intelligent technologies such as digital process automation, robotic process automation, artificial intelligence and machine learning.
What are the benefits of supply chain automation?
Recent supply change disruptions have been due to a number of factors - notably in the areas of public health and geopolitical conflicts - but also rapid changes in demand, climate issues and natural disasters, as well as the continuing shortage of skilled workers. These developments are putting increased pressure on companies to improve both speed and flexibility of delivery.
Supply chain automation can help by reducing capital and labour expenses, optimising product development and reducing delivery times. Ultimately, it can strengthen a company's competitive advantage. Below, we’ve listed six key benefits of supply chain automation.
1. Automation of manual tasks
Technology helps to reduce the amount of time and effort spent on mundane, time-consuming tasks and redirect it to tasks requiring personal and creative input.
2. Reduction of human error
People make mistakes – and when tasks are performed manually, it's very likely that something will go wrong. By taking the human factor out of the equation, automation reduces the risk of accidents and can prevent damages and losses.
3. Increased supply chain transparency
A supply chain that is transparent for all parties requires a great deal of work, communication, connectivity and commitment – from customers as well as from suppliers and service providers. Digital supply chain automation ensures that relevant data is collected independently and updated almost in real time. This allows all relevant parties to access important information when needed, track inventory, and communicate swiftly across the entire supply chain.
It also means that bottlenecks can be identified and resolved quickly, preventing further delays and disruptions and increasing overall efficiency.
4. Improved customer satisfaction
Supply chain automation benefits customers as well, ensuring that orders are processed accurately and shipped quickly. This means that suppliers can achieve a higher level of customer satisfaction.
5. Increased agility
Supply chain automation makes companies more adaptable, since the data provided allows them to respond quickly to unforeseen circumstances. Low-code programming makes it easier to create enterprise applications, and business goals can be quickly adjusted, if necessary.
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6. Assured compliance
It’s becoming increasingly important to reduce risks and adhere to compliance standards, but also more difficult. This is even more true for manufacturers and suppliers with locations worldwide, as they have to comply with different regulations in areas ranging from health and safety to business practices. Often, an audit is required to prove these standards have been met.
Automation helps to improve both risk management and overall supply chain management. All parties involved can demonstrate at any time that the necessary compliance rules have been followed.
Where is supply chain automation used?
It’s not yet possible to implement supply chain automation across the entire supply chain. However, there are already opportunities for companies to put this technology to good use in order to save time, resources and money. Here are some of the supply chain processes where automation can already be implemented.
The software autonomously transfers data from orders to available IT systems. It can also carry out financing and accounting tasks, as well as processing invoices and maintaining other business documents. In addition, the software analyses the supply chain, helping employees to keep track of key performance indicators without spending hours manually collecting information and performing calculations.
In this way, supply chain automation provides companies with more accurate insights and helps them improve their decision-making processes and plan for the future more effectively.
Route optimisation automation determines the best routes and assigns the most suitable carrier to shipments, reducing transit times and shipping costs.
With real-time transport tracking, logistics companies can always keep an eye on where their vehicles are, what stocks are in transit and whether there are any potential delays.
Starting with order processing, orders can be received and confirmed automatically and tracking information sent to customers. Some solutions support picking with goods-to-person order processing (GTP). This allows machines and robots to take the strain off the human workforce. Additionally, pick-to-light systems (PLT), which recognise bar codes and LED lights, can be used to increase speed.
What’s more, it’s possible to automatically ship every order with the ideal package size, to reduce the volume weight and minimise the risk of damage. And some warehouse automation tools are able to identify where stock can be best placed in order to save space.
Automatic reordering systems provide information when resources are running low. If a certain threshold value is reached, they can automatically order replenishment if desired, thus preventing shortages. Minute-to-minute inventory counts give companies an overview of stock levels, so they know the exact volume of inventory at any given time.
What types of tools are there?
When evaluating supply chain automation tools, time to value (TTV) is critical. It's about finding a platform that can offer added value quickly and comprehensively. Since every company has its own preferences, it’s not possible to make individual suggestions. However, the following tips can help when choosing software:
- Does it offer a range of automation tools? Here, each of the solutions serves a specific purpose. A unified platform is better at automating complex processes involving multiple systems and business functions.
- Does it make working with data easier? It makes sense to automate complex processes across systems without having to perform time-consuming and expensive data migrations. A unified data structure also eliminates the concern that basic processes will be interrupted due to update operations on certain functions.
- Does it offer process mining? For processes to be automated effectively, they must be constantly monitored. A platform with integrated process mining tools helps you to measure project success and identify opportunities for improvement.
- Does it reduce development time? Developing processes in a low-code environment takes less time than traditional coding, meaning that IT and business teams can work faster and more flexibly. For example, with low-code tools, teams can build complete applications from business process diagrams relatively easily.