Blog | Feb 22, 2022

Opportunities for Change: Harnessing the power of supply chain automation

Opportunities for Change: Harnessing the power of supply chain automation

As an international sector, manufacturing is no stranger to the concept of automation. If a process can be safely automated on the shop floor, robots will likely be drafted to pick up the heavy lifting.

Yet while the first robots in auto manufacturing can be traced back to the 1960s, with their use booming in the 1970s, applying intelligent automation to back-office and supply chain planning processes is a more recent phenomenon.

And although the use of smart technologies in the supply chain is also well-established, driven by the adoption of standardized barcodes and containers, it is only now that international manufacturers are seeing the real benefits of artificial intelligence and automation solutions.

This is because intelligent automation is an ideal solution for processes with logical and clearly defined transactional processes that operate according to structured rules. The complexities of today’s international supply chain are difficult to map using traditional manual methods, particularly in a time of disruption and climate change.

Challenges in the supply chain

The problem is that manufacturers continue to operate siloed IT systems for different elements of their business, whether that’s customer relationship management, finance or resource planning. This creates disconnects between factory floor systems and the supply chain, lack of visibility across the supply chain, and susceptibility to variations in supply and demand when operating just-in-time manufacturing.

On top of that, the manufacturing sector faces ongoing and sustained regulatory changes in health and safety, taxation, and traceability. So how can a manufacturer use supply chain automation to bring all of that functionality together into one platform?

What is intelligent automation?

Going beyond robotic process automation (RPA), intelligent automation is a cohesive set of products underpinned by artificial intelligence that coordinates collaborative tasks undertaken by human and digital workers.

In times gone by, a retailer or manufacturer of finished goods would simply order the components they needed in advance and wait for them to be delivered. Planning and forecasting were skilled activities, but they relied on stable conditions with no interruptions.

With intelligent automation, digital workers can collect data from multiple sources in real time so that transparency is maintained even if transport conditions change. The organization sending the goods and the organization receiving them know at all times where they are and when they are likely to arrive.

Where can intelligent automation be used in the supply chain?

Once organizations understand the capabilities of intelligent automation to improve the efficiency of processes across the supply chain, they find it’s applicable in many use cases. In general, they can utilize it to increase the scope of digital workers, mine data more coherently, and speed up the process of ‘data, analysis, action’ with greater confidence.

Inventory management

Tasks completed as part of inventory management, such as manually checking stock levels and highlighting shortages, are great candidates for automation. As long as components, materials or finished goods are accurately recorded in an inventory management system, digital workers can quickly and accurately check what’s in stock and what needs to be replenished to fulfil orders in the near future.

Freight and logistics management

Manufacturers can use intelligent automation to plan loads and journeys more effectively, which means they use resources in a smarter way. This helps to reduce the cost of freight and logistics management and provides the data needed to enable customers to track goods across the supply chain.

Regulation execution

A digital workforce can improve response times against existing regulatory service level agreements (SLAs). This helps manufacturers respond to new regulations faster and understand the impact of changes on operational costs. Digital workers can collect data and build reports to demonstrate regulatory performance and adherence to SLAs or carry out audits with internal reviews.

Demand forecasting and planning

Using intelligent automation, manufacturers can check inventory levels against actual stock and automatically generate purchase orders to suppliers, speeding up the process and preventing delays.

Back-office automation

Customer experience can be improved through more efficient order and invoice processing, more responsive customer service, and enhanced quality assurance. Organizations can derive greater insights from their customer data and adapt to evolving customer preferences more quickly. Even simple processes, such as account information changes, can be automated and transformed into a self-service facility, making life easier for customers and saving valuable time and resources.

Factory automation & TPM

Data captured by IoT devices, such as factory equipment and RFID tags, can be collated, aggregated, analyzed and acted upon by digital workers in conjunction with machine learning to increase productivity, improve process efficiency and drive down costs. Parts, components and products can be tracked throughout the production cycle. Digital workers using intelligent automation can gather data from assorted sensors, standardize the formatting and then facilitate the use of predictive algorithms to provide predictive maintenance. Digital workers then take the relevant actions to minimize downtime.

The benefits of supply chain automation to manufacturers

Using digital workers, manufacturers can transform the customer journey by increasing visibility across the supply chain, responding faster to customer requests, and adapting to their changing expectations for increased personalization and customization.

They can also digitize back-office processes, from finance and accounting to HR and inventory management, while unlocking big data to ensure better machine utilization, faster throughput and improved tracking of inventory and logistics.

Importantly, intelligent automation in the supply chain frees up people from manual tasks, thereby increasing their capacity and ability to work on higher value work. One of the most valuable areas where this can happen is in meeting the need for regulatory compliance, which changes constantly and, when done manually or via spreadsheet, can take up huge amounts of time and human resource.

Manufacturing and Supply Chain Automation

Even in the B2B world of manufacturing, customers increasingly expect service levels that are more akin to their experiences as a consumer interacting with e-commerce retailers. They want to be able to track deliveries, access order histories, make repeat purchases, and check warranties and maintenance records. And they want to do these things in real time without necessarily having to speak to customer service agents.

Of course, there may always be a place for sales teams in manufacturing, especially for complex, high value products. But the direction of travel for high volume, lower value products and components is towards self-service channels that enable customers to access the data they need, when they need it, via mobile or online channels.

Maintaining and managing complex supplier relationships is critical to an effective modern supply chain and efficient production. Optimizing supplier performance, ensuring cost effectiveness, and monitoring supplier adherence to regulatory and ethical requirements is a challenge.

The only way to provide these services efficiently and accurately is to automate processes and integrate data sources across multiple applications. Replacing core systems is not normally an option for manufacturers that have invested in an ERP platform for several years. Instead, they can employ digital workers to fetch and carry data between siloed systems, leaving the human workforce free to undertake higher value tasks.