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Supply Chain Automation Guide

A Comprehensive Introduction to Supply Chain Automation

Supply Chain Automation

The global supply chain continuously grapples with various challenges, including unpredictable logistics, climate-related disasters, skills shortages, and increased regulations. These factors make it even harder for manufacturers and supply chains to plan, forecast, and operate effectively. So, they must find better ways to respond to rapid change to survive and succeed.

That’s where intelligent automation (IA) comes in.

Automating the supply chain helps organizations face these challenges, achieve more, and thrive in this demanding environment. Let’s walk through how they’re doing this and more.

Here are the key takeaways:

  • What does supply chain automation include?
  • Business examples of supply chain automation
  • Why automate your supply chain and the benefits of automating
  • Current trends shaping supply chain automation

What Is Supply Chain Automation?

Supply chain automation refers to using automation technology and software to handle supply chain tasks without the need for much human intervention. It streamlines and optimizes the management of goods and services as they move through the supply chain, from manufacturing plants to the shop floor. At its simplest meaning, it turns repetitive tasks into automated actions. But of course, it’s got far greater capabilities than that.

This advanced automation is what we call intelligent automation (IA), which combines other cognitive technologies such as robotic process automation (RPA), artificial intelligence (AI), machine learning (ML), business process management (BPM), and natural language processing (NLP) to revolutionize how supply chains operate.

All of these technologies play a unique role in supporting automation throughout the entire chain, working in collaboration to bring new levels of efficiency, effectiveness, and agility.

Why Is Automation Needed in the Supply Chain?

There are several reasons why organizations would implement IA in the supply chain, some more obvious than others. Here are just a few standouts we’ve uncovered.

Inflexibility of current systems and processes

Currently, many logistics professionals are juggling between sourcing information from emails, spreadsheets, physical documents, and digital documents as they try to understand the status of their supply chains and markets. At the same time, the volume of data sources is growing, while the available labor pool remains limited.

Existing processes now lack adaptability to these growing needs, which means supply chains don’t have the agility to respond quickly to market needs, unforeseen disruptions, and demands. Intelligent automation in logistics and supply chains introduces the necessary efficiency, flexibility, and responsiveness to ensure organizations don’t only manage these changes but thrive in them.

Lagging capacity and capabilities of IT systems

The limitations of legacy IT systems have become increasingly evident. Older systems can’t provide the comprehensive insights that supply chain professionals need to get a holistic overview of their operations. To make matters harder, some teams are still holding onto information or sharing it too late, hindering collaboration and causing potential delays in information flow to make informed, strategic decisions.

Automation is needed here as a unifying solution, seamlessly connecting siloes of information into one ecosystem for supply chain professionals to see. Better yet, it can help supply chains capitalize on growth opportunities. Take the recent uptick in using RFID (radio frequency identification) tags. These generate a huge amount of valuable data, but many suppliers don’t have the capacity or capabilities to analyze this data properly. IA helps provide the critical intermediate step that bridges the gap between legacy IT systems and the capabilities of advanced technologies.

Better supply chain planning

Supply chain planning has really shot up the priority list because previous events showed inflexibility and a lack of adaptability in many existing planning setups. Organizations that tried to plan their processes according to current fast-changing market conditions found that their data was outdated and, therefore, struggled to catch up.

They’re now seeing the need for IA to help, especially to elevate planning capabilities. Incorporating IA means real-time data insights, accurate environment and demand planning, and optimized resource allocation. As a result, supply chains can respond to rapidly changing market fluctuations with better information and insight for success.

Those are just a few points about why supply chains need automation, taken from research in the Reuters Events supply chain whitepaper in partnership with SS&C Blue Prism.

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What Are the Benefits of Automation in the Supply Chain?

Supply Chain Automation Benefits

We’ve covered a few of the benefits of supply chain automation in the previous section, talking about why organizations need automation in their supply chains, but here are a few more rapid-fire points:

  • Reduces errors. Automation minimizes human errors in data entry, process orders, and other routine tasks. This ensures accuracy in the supply chain.
  • Reduces operational costs. IA ensures that organizations avoid the costs associated with rectifying errors. It also helps resource optimization, ensuring the costs associated with labor, transportation, and warehouse space are used efficiently without unnecessary expenses.
  • Faster fulfillment. Automation systems can process orders more swiftly than requiring a human to manually do it; this leads to a shorter lead time and faster movement throughout the supply chain.
  • Better visibility. Organizations are able to get real-time visibility into their operations to enable better tracking, monitoring, and planning. For example, better visibility of shipment status and delivery for a better customer experience.
  • Inventory optimization. Warehouse automation helps maintain optimized inventory levels, reducing excess or dead stock while also preventing organizations from being out of stock. IA digital workers have visibility of stock levels and automatically put in orders where necessary.
  • Scalability. As an organization grows or faces a high order period (such as a holiday), automated systems are able to easily scale to accommodate increased workloads.
  • Improves data security. Automation security features can be programmed to protect sensitive supply chain data from unauthorized access, such as only allowing certain people to view or manipulate data. IA digital workers also keep accurate logs for detailed auditability.
  • Productivity. As manual, repetitive tasks are handled by IA, employees are free to focus on more high-level and productive tasks like supplier negotiations or customer upsells.
  • Adherence to regulatory compliance. You can expect robust traceability, enhanced security features, and reduced errors with automation. Supply chains can ensure they meet any regulations and compliance changes as they come or change.
  • Continuous improvement. Processes can be continuously optimized with IA systems, as they can be analyzed and adjusted for efficiency, leading to continuous refinement over time. Real-time visibility also helps organizations proactively address issues and continuously enhance performance as they come up.
  • Improves customer satisfaction and experience. IA can assist with various aspects of the customer experience to help address needs quickly and accurately. For example, IA can help answer queries about the current status of their deliveries.
  • Employee experience. With manual, repetitive, time-consuming, and laborious work passed onto digital workers, employees are able to enjoy doing the higher-level, more strategic aspects of their jobs.
  • Sustainability. IA helps address environmental, social, and governance (ESG) principles that are unique to each organization. It helps increase efficiency, which translates to less waste, reduced energy, and lower carbon consumption. It also aids in the effort for organizations to be more transparent, combining multiple data sources and disparate information.

Examples of Supply Chain Automation

Examples of Supply Chain Automation

Let's go through some use case examples to visualize how automation can be applied to optimize your supply chain.

Inventory management

Before automation

After automation

In traditional supply chain operations, organizations manage inventory using multiple disconnected systems. These are often prone to human errors, inaccuracies, and inefficiencies as employees are burdened with the task of manually entering, updating, and reconciling data across these systems. This challenge can be escalated during peak periods, leading to mismanagement of inventory levels. Also, these inaccuracies can have a ripple effect on the entire supply chain, impacting production planning, order fulfillment, and customer satisfaction.

Having IA digital workers means that organizations no longer need to rely on humans to put inventory information into systems. IA digital workers take charge of inventory management across various systems and sources. They seamlessly integrate data from historical demand patterns, current order information, supplier data, and even external factors like weather predictions. This comprehensive data integration enables organizations to maintain optimal inventory levels.

Production capacity

Before automation

After automation

Organizations faced higher production costs due to the manual efforts of employees. Inefficient manual processes mean that production scheduling would often be slow, resources underutilized and labor costs increased. These challenges were made harder with ‘over the wall’ decisions, where planning was carried out by one team at a time. This often slowed down the process and by the time a decision was made, it was done with outdated information.

Digital workers revolutionize the manufacturing and production process. They're able to access real-time, accurate data to eliminate the sequential decision-making approach. Informed decisions can be made efficiently, such as when to schedule machine maintenance, which optimizes production planning and capacity.

You can find more use cases in our supply chain optimization eBook.

How Do You Automate a Supply Chain Process?

Supply chain process automation is one of the best decisions, but it must be made strategically. We have a saying — automate what you can and use humans where you should. Not everything is suited for automation, and it shouldn’t just be deployed wherever, as this can lead to further problems down the line and more headaches. Something we’re sure you don’t want.

We call it an automation journey because it’s a progression of strategy, development, and continuous optimization. We have a framework that supports you to get there. The SS&C | Blue Prism® Robotic Operating Model™ 2, ROM2 for short, complements the transformational capability of the digital workforce with a set of guidelines, principles, and practices that allow you to effectively deliver automations in your supply chain. ROM2 will help you identify those transformational automation opportunities, establish best practices, and transition towards a unified workforce of people and digital co-workers.

Introducing IA can seem like a daunting task. Many have begun with process mining for the supply chain to discover, monitor, and improve processes. It’s through process discovery and mapping that supply chain professionals get the visibility to better understand and compare people, processes, and systems against best practices.

How do you choose automation software?

When looking for the best automation software for supply chain management, we recommend looking at the key features that are most applicable to your needs. ROM2 helps you through that process, but here are some questions you should ask in your search:

  • What type of systems are currently in my supply chain? 
  • Are they legacy or outdated systems and will I need the automation software to integrate with it?
  • What’s my organization’s automation budget?
  • What type of tasks do I need to automate to improve my business processes?
  • Do I need to rely on third-party systems? 
  • Will automation work with my current applications?

Trends in Supply Chain Automation

Supply Chain Automation Trends

As the supply chain landscape continues to evolve, three prominent trends are shaping automation strategies and implementation in this field:

#1 - Focus on ESG

ESG is only becoming more important. Companies across the supply chain will need to accelerate their ESG priorities and reporting to ensure they meet new regulations and customer expectations, such as reducing carbon emissions and becoming more transparent. Supply chains can get ahead of this trend by automating such reports and data collection now.

#2 - Artificial Intelligence

A survey of logistics professionals found that AI was seen as the most transformational technology, with 61% believing that it would be the most impactful over the next five years. In the context of supply chain automation, AI is helping in various ways, including demand forecasting, route optimization, inventory management, quality control, customer management, and more. It continues to offer supply chains more adaptable, resilient, and efficient operations.

With IoT technologies, such as RFID implementation, supply chains are also now dealing with a wealth of data at their fingertips to bring even more success opportunities. But it’s the collaboration with AI that’s taking this trend to the next level. IA is helping organizations be more proactive in seizing opportunities from these data sets and identifying potential disruptions as they happen.

#3 - Workforce changes

The workforce is aging, and global supply chains are confronted with the challenges of retaining experienced employees and backfilling roles left vacant. This has pressured operational efficiency and continuity.

Automation is rising as a critical solution to address this shortage and fill the gap by:

  • Facilitating knowledge transfer from human workers to digital systems to ensure accessibility for future employees.
  • Enhancing the capabilities of employees by acting as a supportive tool to do work, kind of like a digital assistant.
  • Assuming responsibility over mundane, routine, and repetitive tasks to allow human workers to concentrate on more complex, strategic assignments.

Supply Chains of the Future

Supply chains are undergoing a transformative evolution, which will continue happening as new regulations come into action, new technologies are introduced, and unpredictable shifts in the environment take place. To operate successfully within these conditions, supply chain automation is the best strategy going forward — helping supply chains become more adaptable, resilient, and efficient so they can come out on top.

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