Automation in the Supply Chain and Its Impact on Scalability

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Automation is coming of age in the supply chain. Where supply chain leaders once viewed automation capabilities as science fiction fantasy, automation’s real-world applications are becoming evident. As explained by David Welch of Supply Chain 24/7, part of the reason for interest in automation in the supply chain derives from the continuous threats of Amazon and e-commerce and retail giants like Walmart and Target. They all make promises of fast, free shipping. Moreover, Amazon has managed to tap an economy of scale, driving prices to microscopic levels. Supply chain leaders need to understand the challenges of automation in the supply chain, how it enables scalability, and the use cases of automation that enhance customer experiences through faster, better service.

The Digital Supply Chain: The Landscape, Trends, Types, and the Application in Supply Chain Management

Challenges of Implementing Automation in the Supply Chain

The challenges of implementing automation in the supply chain reflect the challenges of upgrading existing supply chain systems. Top challenges supply chain leaders face includes:

  • Disparate systems designed to handle isolated supply chain management functions and tasks. Over the last 20 years, systems have been created for every aspect of supply chain management. The yard needs management. Labor needs management. Customer service relationship management platforms exist. Warehouse control systems were built to serve as a go-between the traditional WMS and advanced functions of cloud-based technology, says Dave Williams of Manufacturing.net. The list goes on and on.
  • Inability to integrate existing systems with new technologies without steep costs. It is possible to integrate almost anything, but the cost of integration must be a key concern for supply chain leaders looking to improve efficiency through automation. Any customized capabilities of a newer supply chain systems software will inevitably experience recurring costs as technology continues to advance. Ultimately, supply chain leaders that do not move their existing solutions into the next century with cloud-based platforms will likely face the threat of extinction or obsolescence and maintaining their current systems within the next five years.
  • Problems applying data collected from technologies enabling automation. As an example, automated storage and retrieval systems (AS/RS) generate a proverbial town of data, and while they automate the process, failure to understand this data could contribute to inefficiencies.
  • Fear of the robot apocalypse. Now, we are not talking about the horrors of Terminator, but the idea is the same. People are concerned that the increased use of automation and robotics will naturally result in job losses and harm the economy, if not start the proverbial apocalypse. However, history teaches a different lesson.

Automation in the Supply Chain Enables Scalability

The use of automation in the supply chain enables a remarkable level of scalability. Automated processes do not eat, sleep, or complain. Yes, problems may arise, and exceptions will occur. Yet, automation of repetitive processes is what has allowed humanity to evolve to its current state. If the broad definition of automation was applied to human history, then the invention of the wheel might have been considered a cost that would be too great and harm the world. This is an extreme example, but automation always enables better productivity, efficiency, and, as a result, scalability.

Applications of Automation That Will Improve Scalability, Productivity, and More

The best way to understand how automation enables scalability and provides benefits are to look at its specific use cases. Critical use cases of automation in the supply chain include:

  1. Automated yard and dock management and scheduling. Automating the schedules will reduce delays for trackers, reducing risk of detention time, and ensuring customer orders go out on time.
  2. Automated notifications for managers and staff. Automating notifications will effectively move the process of making decisions based on current data away from the chains of an office desk. Through this application of automation, supply chain leaders and managers can get out on the warehouse floor, engaging with workers, and ensuring maximum productivity through all possible means.
  3. Smart forklifts, conveyor belts, and robots that reduce the risk of physical injury for workers moving heavy items or packages.
  4. Reduced errors as orders move seamlessly throughout the warehouse, routed to the proper worker and maximizing order accuracy.
  5. Self-generating reports, based on self-optimizing systems, allow workers to focus on other tasks, including the maintenance and management of automated systems. While artificial intelligence is well on its way to use, most systems still require human intervention at some point.

Bolster Supply Chain Performance With Automated Processes

Automation in the supply chain is the best way for supply chain leaders to augment the value in their existing supply chain networks. While arguments against automation in warehouses and throughout your distribution network do exist, they have a way of streamlining operations and improving the workload of your staff. Instead of risking personal injury, they can focus on other tasks, such as checking order contents, interacting with customers, and more. The same concept applies to leaders and managers, engaging with employees, which drives turnover rates into retreat and bolsters the productivity of your workforce too. Amazon is coming, and its acquisition of Whole Foods and recent partnership with Kohl’s for in-store returns mean supply chain leaders need to pick the low hanging fruit, automating processes where possible.

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