Supply Chain Automation: What is it and how can it benefit You?
Large-scale manufacturing automation was pioneered by Henry Ford when he introduced assembly lines in his automobile manufacturing factory. Since then, every manufacturing function has continuously been undergoing a technological transformation that involves the automation of material flow, information transfer, financial transactions, and relationships with suppliers/customers. Companies are currently focusing on automating intercompany and company-to-customer collaboration using the internet. In this article, we would trace the 21st-century developments in the area of supply chain automation solutions.
Despite several economic and societal changes, the main goal of supply chain networks has remained the same – delivering manufactured products to customers at the time and place of their choice. To thrive in today’s competitive business environment, you need to ensure rapid deliveries, 24/7 accessibility, last-minute changes, and easy returns with innovative service options. To remain profitable in this customer-centric world, you should invest in ERP, PLM, CRM, SCM, and similar software for process automation in the supply chain.
What is Supply Chain Automation?
Supply chain automation is a combination of digital technologies aimed at improving efficiencies, connecting applications, and streamlining processes. With the rapid growth of e-commerce, there is a far greater volume of goods being moved through warehouses at breakneck speeds. This replenishment is primarily attributed to automation systems, digital processes, and electronic workflows. The future of supply chain automation ranges far and wide from supplier management, transportation, warehousing management, inventory management, manufacturing, customer relationships, back-office operations, and more.
The flow of goods in an automative supply chain is associated with five major activities – plan, source, make, deliver and return. There is sufficient scope for process automation within each of these functions for you to undertake digital initiatives and achieve a leaner automative supply chain. The various facets of supply chain automation deal with these functions separately and ensure effective operational automation.
Let’s discuss the four facets of supply chain automation in detail:
1. Material Flow Automation
The first facet of supply chain automation solutions includes computers, material-handling robots, and automated guided vehicles. Apart from robots and vehicles, computer-based software allows manufacturers to map the material flow on a unified dashboard and optimize the supply chain for maximum efficiency. This software also ensures consistency of operation, along with enough room for relevant modifications.
2. Information Flow & Decision Automation
The internet gives companies global visibility and information-sharing capabilities. Supply chain automation over the internet allows companies to easily share demand-forecast information, production-capacity requirements, manufacturing schedules, and new product recipes with relevant stakeholders. Companies can leverage the available data, and, maximize the performance of these sub-processes and the entire supply chain.
3. Control and Supervision Automation
LAN networks make it possible for automated control of manufacturing activities with a diminishing need for human intervention. Software these days has the capability to standardize supply chain processes and trigger automated responses for predefined events. Virtually, all these efforts have focused on automating and improving the efficiency of operating units within the four walls of a factory.
4. Relationship Automation
Supply chain automation simplifies all activities associated with maintaining positive relationships with suppliers, contract manufacturers, OEMs, distributors, retailers, and even customers. All these players are kept in the loop for combined forecasting by sharing data pertaining to point-of-sale information, joint scheduling, product development, financial transactions, and more.
What are the Benefits of Supply Chain Automation?
If you or your company have built up a patchwork of legacy systems with gaps that can lead to inefficiencies, lack of visibility, and general uncertainty, now is the time to make a change. You are advised to automate your supply chain using integrated software to fully realize the advantages of automation.
The Major Benefits of Supply Chain Automation Are Listed Below:
- Improving Logistics
- Minimizing Human Errors
- Reducing Lead Times
- Increasing Visibility
- Managing Risk Events
- Ensuring Compliance
- Improving Logistics – Businesses today rely heavily on automated logistics management. Businesses are using machines to pick, pack and identify products in the warehouse and beyond. Automated equipment like barcodes and RFID scanners help track their goods right from when they enter the warehouse, till the moment they leave as finished products. While giving you an efficient warehousing plan, automation also lets you map an efficient route to transport goods to and from your warehouses.
- Minimizing Human Errors – Manual drafting of orders, receipts, bills, and other documents is both time-consuming and error-prone. By automating document generation, you can enhance process efficiency, increase fill rates, improve inventory management, reduce operational costs and decrease cycle times. Supply chain automation can save precious man hours by reducing the time associated with implementing labor-intensive tasks like accounting, hence saving valuable amounts of time and money.
- Reducing Lead Times – Automation can reduce waste and waiting times for an effective reduction in lead times. Process automation effectively reduces machine idle times and ensures just-in-time availability of raw materials. The increased speed of material flow can ensure fast delivery times to the customer, fast reaction to changes in demand, low tied capital, and fast identification of quality mistakes and other problems. This entire effort also aids the efforts of achieving faster time-to-market for new products.
- Increasing Visibility – Real-time updates regarding the location and availability of materials make it easier for managers to make inventory and sales decisions. Supply chain automation provides timely information, making it easier to identify and fix bottlenecks. The goal of supply chain automation is to improve and strengthen the supply chain by making data readily available to all stakeholders, including the customer. Insights into the inner workings of a supply chain can inform operations, customer satisfaction, compliance, and company growth.
- Managing Risk Events – Supply chain automation gives you the ability to respond to risk events in a quick and cost-effective manner. While the risk events are different, they impact similar variables. By automating organizational responses to manage these variables, automation can take a considerable weight off the shoulders of decision-makers. Agility and resilience help supply chains recover more quickly from such sudden setbacks. In today’s competitive world, the ability to manage risk means being better positioned than competitors to deal with disruptions.
- Ensuring Compliance – Global supply chains face variable compliance depending on the countries that they serve. Automation enables organizations to stay up-to-date with changing trade agreements, procurement rules, and governmental tariffs. All stakeholders can ensure best practices are followed while integrating compliance for effective and risk-averse operations. It’s hard to prove compliance when there are errors in data tracking and management. Therefore, software like ERP can automate data gathering for accuracy and authenticity.
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