What is supply chain automation?
Supply chain automation refers to using technology like software, systems, and machines to handle various processes in a supply chain that would otherwise require human labor.
In a nutshell, the basic idea is to allow supply chain tasks like sourcing materials, manufacturing products, and delivering goods to customers to happen with little to zero human intervention.
Types of supply chain automation technologies
There are far more supply chain automation solutions already in use than you can imagine!
Let’s take a look at some of the staples:
- AGVs are self-driving vehicles used to transport materials within warehouses and factories without needing a human operator. AGVs follow predefined routes to pick up and drop off loads, optimizing the movement of goods.
Many companies use AGVs to automate repetitive, day-to-day transportation tasks.
- Barcode scanners quickly scan barcodes on products, cartons, pallets, and containers to identify items and capture data. Barcode scanning is a fast, inexpensive way to track inventory and assets as they move through the supply chain.
- RPA uses software bots to automate repetitive, rules-based tasks like data entry, validation, and reconciliation. RPA bots can work 24/7/365 and process transactions much faster than humans.
Supply chain companies use RPA to speed up manual processes like purchase order creation, shipment booking, and invoice processing.
- AI technologies like machine learning and predictive analytics help companies gain valuable insights from huge amounts of data. Supply chain companies use AI for demand forecasting, optimizing delivery routes, detecting fraud, improving the customer experience, and more.
AI is already making supply chains smarter, faster, and more efficient.
- The Internet of Things (IoT) connects physical devices, such as sensors and machines, to the Internet. In supply chain automation, IoT sensors can track the temperature, location, and condition of goods in transit.
This gives you real-time visibility and enables proactive decision-making.
What are the benefits of using automation in supply chains?
Using automation technologies in your supply chain has quite a few benefits:
- For starters, it reduces human error. Manual processes are prone to mistakes, but automated systems are designed to handle repetitive tasks with a high degree of accuracy. Fewer errors mean higher quality and consistency.
Automated inventory systems, for example, help you make sure you never run out of critical parts or materials. Robotic pickers and sorters handle goods smoothly and gently.
- Automation improves efficiency. Software systems can analyze data to optimize routes, schedules, and resource allocation. Robotic arms work faster and more tirelessly than humans. This boosts productivity and allows you to fulfill more orders in less time.
- Cost savings is another big benefit. Automated systems require fewer employees to operate, which slashes labor costs. They also minimize waste by tracking goods more closely and handling them more carefully. Over the long run, the investment in automation technologies can pay for itself through savings and increased revenue.
(What’s the ROI, you ask? Just 1-3 years.)
- Automation gives you a major competitive edge. Supply chains that leverage advanced technologies can respond more quickly to changes in the market and customer demand. They can scale up rapidly and take on additional workloads without major disruptions.
For companies operating on tight margins, automation could be the key to gaining market share and improving the bottom line.
Real-world examples of supply chain automation tools in action
Unless you’ve been living under a rock (no offense if you have), then you won’t be surprised to learn that several key industries are already using supply chain automation.
Let’s take a look at some of the most important ones:
- Manufacturing automation: Modern factories integrate a variety of automation technologies, radically transforming production lines. Robots handle tasks like welding, painting, machine tending, and intricate part assembly with blink-and-you’ll-miss-it speed and precision. AGVs shuffle materials between workstations, while advanced sensors monitor quality and optimize processes in real-time.
This level of automation enables manufacturers to streamline operations, increase output, and improve product consistency.
- Many large companies are paying the big bucks for automated warehouse technology like conveyor belts, automated storage and retrieval systems, robotic pickers, and automated pallet jacks.
One major example is Amazon Robotics’ automated fulfillment centers, which use over 200,000 robots to move shelves and pallets, sort and pick products, and fulfill customer orders. This high level of automation allows Amazon to ship millions of items daily and maintain blazing delivery speeds.
- Leading logistics companies use transportation management systems to automate the planning and optimization of shipping routes and transportation modes. UPS and FedEx use algorithms to determine the most efficient delivery routes each day based on current road conditions and customer locations.
Some companies are even testing autonomous delivery trucks and drones to automate last mile delivery.
Getting started with supply chain automation (and some best practices)
To get started with supply chain automation, focus on the low-hanging fruit.
Let’s take a look at what that entails:
- First, take inventory of current processes. Do an audit of your current supply chain processes to determine which are ripe for automation. Look for repetitive, routine tasks that don’t require human-level judgment. These are ideal candidates for automation and will provide the biggest benefits.
- Start with a pilot program. Don’t try to automate your entire supply chain at once. Pick one area or process to focus on, like automating purchase order creation or optimizing your shipping routes.
Just like with a TV show, don’t go all in! Run a pilot program to work out any kinks before rolling it out company-wide. Starting small allows you to get buy-in from employees and make adjustments as needed.
- Invest in the right technologies. The technologies you choose will depend on your specific needs. Options include robotic process automation for automating repetitive tasks, AI and machine learning for optimizing complex processes, and blockchain for improving transparency and security.
Do your research to find the tools that are the perfect fit for your company.
- Train your staff for what’s coming. While automation may eliminate some jobs, humans still play a major role. Provide training for your staff on the new technologies and processes so they can work with the automated systems.
You’ll also have to retrain staff in areas that become automated so they can focus on more strategic work. With the right training and support, automation can enhance human jobs rather than eliminate them.
- Keep optimizing. Supply chain automation is an ongoing process. So, remember to monitor how the changes are impacting your key performance indicators like costs, efficiency, and customer satisfaction. Look for additional ways to optimize and streamline.
It’s very important to stay on top of advancements in technology so you can implement the latest and greatest tools to automate your supply chain. Continuous improvement is the recipe for success.
Summing up
Now you know what supply chain automation is, the different technologies involved, why it's so beneficial, real-world examples, and how to get started.
Forget about the future; the present is all about automating repetitive tasks so you can focus on more important strategic work and reap that sweet, sweet productivity moolah.
Implementing the right solutions can save you time and money while making your supply chain more efficient and competitive.
The key is to start small, prove the value, and then scale across your operations. With the right strategy and technology partners, you'll be well on your way to supply chain success!
Next steps
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- Gets better right along with you: Equipped with AI capabilities comparable to GPT-4, RO1 continually learns and adapts, ensuring long-term efficiency gains and adaptability to your changing needs.
- Ready-made for manufacturing success: In manufacturing environments, RO1 excels at parts assembly, machine tending, packaging, and more, optimizing key stages of your supply chain.
Our team guides you through every step of implementation, ensuring you maximize the benefits of RO1 automation. Don’t take our word for it; try our 30-day risk-free trial!
