March 31, 2021

7 Practical Steps to Automating Your Supply Chain

Author: Stockpile Reports

With an automated, well-optimized supply chain, you can expect 15% less overall overhead, 50% fewer inventory holdings, and three times faster cash-to-cash cycle. Then there are benefits like faster business processes, a more seamless customer interaction, and less strain on employees. The total advantages of supply chain automation are too numerous to recount here.

Of course, you’ve probably heard of the benefits before and are aware of the global push toward supply chain automation. Your company may even have digitization plans in the works. But, as you may have already discovered, thinking about implementing supply chain automation and actually doing it are two very different things. There are several barriers, as a report Reuters can attest, that make lift-off difficult for companies:

• Tech implementation is costly (48% of companies report).
• ROI calculations are rocket science (40%).
• Where does automation even begin? (35%).
• Which supplier can you trust? (11%).
• Digitization will be too disruptive, right? (10%).

If you’d like to automate but don’t know where to begin or are struggling with related challenges, this mini-guide with practical steps can offer some much-needed clarity and direction:

1. Analyze workflows

The first step toward automation is mapping out your workflows and business processes. Once you have a bird’s eye view of how everything fits and flows together, you’ll have insights on how automation would work best for your unique business. Some likely automation targets include inefficient processes, simple recurring manual tasks, customer interactions, security, and paper-based data-related systems. Map out all the business processes you have direct control or major influence over from supplier to the customer.

2. Identify automation opportunities

Once you’ve mapped out all your workflows and identified inefficiencies and problem areas, you know where your supply chain could potentially be automated. Then comes the hard part: you need to calculate the ROI for these automation opportunities, based on your business goals and available funds. To estimate costs, make a list of what you’ll need to automate like software, external consultants, more employees, techies, and advanced equipment. Not every automation opportunity will offer a significant ROI (more on this later).

To give you an idea of what automation opportunities may look like, here are some ways companies are automating their supply chains in 2021:

• Back office work: There are countless documents to process like dock receipts and delivery orders, and related systems to run and maintain. Software, apps, and AI can speed this up.
• Inventory operations: Automation will support and optimize inventory management, storage, supply-demand planning, production, and related decisions.
• Fieldwork: Companies speed up day-to-day fieldwork like volumetric measurements with the help of technology.
• Transport: Transport is being automated with the help of drones and self-driving vehicles. Further, companies can make better transportation decisions with technology.
• Customer-side: Chatbots and artificial intelligence are making customer service more efficient. Companies can generally deal with customers better.
• Security: Security can be bolstered by technology like AI-backed cybersecurity, spot-checking with measurement tools, and monitoring systems.
• Robotics: Robots and machines can automate recurring manual tasks. This isn’t a new invention, of course, but advances like machine learning have made robots more useful than ever.
• Data analysis: Data analysis involves collecting data about everything that makes your supply chain tick and learning from it. It drives better business decisions – based on facts, not estimates.

Stockpile Reports can bring automation to critical aspects of your supply chain with our cutting-edge measurement and analysis solution.

3. Automate

Next is the actual automation part. By researching the latest trends and your competitors, you can lift entire well-documented, well-researched technologies and methodologies and apply them to your supply chain. You may need to hire teams, consult with experts (again), purchase software and equipment, and generally overhaul your existing systems for this phase. Make sure your automated parts work well with each other, and there are no compatibility issues. Further, ensure that the non-automated parts of your supply chain can advantage of the benefits offered by the automated bits. Plan for the future and leave plenty of room for modifications, changes, and upgrades.

4. But don't automate everything just because

Knowing when not to automate is important. Automating everything isn’t always the most efficient route, and it can sometimes backfire. Humans remain indispensable throughout the supply chain, especially in areas requiring social skills or manual dexterity. They are better at decision-making, planning, and organization, and far more adaptable. Robots, for example, are good at carrying loads, straight-line movements, and repetitive tasks. But you’ll find them to be too inefficient and costly for some recurring day-to-day tasks – like loading and unloading stockpiles.

5. Factor in all the challenges

Don’t expect automation to be all clear skies and smooth sailing. There will be countless obstacles to overcome. The key is to remain patient, persistent, and focus on all the long-term benefits. What challenges can you expect to encounter? Below are some examples:

• Disruptions (or disruptors): These are frequent and many, ranging from the recent pandemic to IT outages, adverse weather, cybersecurity issues, sales problems, PR scandals, and fires.
• Misc. challenges: These include problems like cost increases, competition, customer expectations, employee expectations, inventory issues, shortage of labor, and communication breakdowns.
• Compliance challenges: There will be regulations about what you can automate and how your supply chain impacts the environment, human health, and society as a whole. You may also have to consider data safety and privacy laws.

The goal should be to automate your supply chain while keeping it flexible as well as resilient.

6. Evaluate the results

Ideally, you should develop an evaluation strategy that complements your implementation. If you, for example, decide to automate your supply chain in stages, then you should also evaluate the implementation alongside. Some of the factors you need to evaluate include material costs, overheads, employee costs, operating costs, sales figures, and productivity metrics.

Haven’t you done all these calculations already at the beginning? You’re going to overshoot or undershoot many of those numbers in practice. The only way to find out how well your automation is really going, as opposed to how you planned it to go, is to measure frequently.

7. Modify, and keep improving

Automation is an ongoing, circular process. It’s not something you do one time and then leave. Instead, it’s a long-term endeavor, something that evolves over time. Automation technology is changing rapidly – the solutions you use today may become obsolete tomorrow. Also, inventors and thought leaders are constantly coming up with ways to do things more efficiently. The only way to stay on top of automation and evolving technology is to keep learning, applying, and improving.

Get help when you need it

Automation is a challenging proposition. It can pay to work with a partner who can shoulder the burden and assist in reaching your automation goals with their technical expertise, know-how, and industry experience. Stockpile Reports has long been a leader when it comes to pioneering technologies. Our experts can help analyze your business processes and improve them with our automation and logistics solution. We help companies big and small to measure faster and more accurately, make better business decisions, and save money and time. Further, we also help implement complementary solutions for your supply chain like Vendor Managed Inventory (VMI).

Talk to our experts today to learn how we can help automate your supply chain without burning a hole in your pocket.