Late shipments, inventory errors, and rising costs are common supply chain headaches. Supply chain automation offers you a way out. Keep reading to understand what it is, how it can help you, and how to implement it to improve your bottom line.
What Is Supply Chain Automation?
Supply chain automation uses technology to complete tasks with minimal human input. It spans both physical and digital workflows:
- On the floor: Robots, conveyors, and Internet of Things (IoT) sensors manage storage, movement, and tracking.
- In the back office: Tools like Robotic Process Automation (RPA) and Intelligent Document Processing (IDP) streamline repetitive tasks like data entry and invoicing.
Why Supply Chain Automation Matters
As consumer expectations for speed and convenience of order fulfillment grow, supply chain automation has become critical for staying competitive.
Manual supply chain processes are often inconsistent and expensive, with a lot of potential for human error. Automating your supply chain lets you adopt a data-driven, optimized approach that gives you more control, visibility, and scalability. With supply chain automation software, you can significantly reduce costs, improve efficiency, achieve greater reliability and accuracy, and handle changes in consumer demand.
Common Challenges in Today’s Supply Chains
Modern supply chains face mounting pressure from:
- Economic uncertainty: Global inflation and trade shifts require agile financial planning to stay competitive.
- Geopolitical tensions: Policy changes, especially in tariffs and trade agreements between different countries, intensify the need for flexible global strategies in supply chain management.
- Regulatory complexity: Compliance systems must adapt in real-time to the complex web of new and existing regulations across markets.
- Labor shortages: While worker retention is critical, ongoing labor shortages have forced companies to find ways to fill gaps with automation.
- Cybersecurity threats: Supply chain digitization comes with an increasing risk of cyber threats, making strong digital defenses essential.
Key Benefits of Supply Chain Automation
As you create your automated supply chain management system, you should start seeing these benefits:
- Increased efficiency: Automating repetitive, manual tasks reduces delays and the need for human labor. As a result, your employees can focus on strategic work instead, helping to improve your productivity.
- Reduced costs: Automation cuts labor costs and minimizes waste, errors, and inefficiencies, helping you reduce overhead and optimize your asset management across operations. For example, Amazon is reported to have cut costs by 25% in its Shreveport fulfillment centre after increasing its robotics tenfold.
- Improved accuracy: Warehouse automation technologies rely on data and algorithms, reducing human error in tasks like forecasting, inventory tracking, and order processing. Keelvar’s recent report on sourcing found that procurement teams who have adopted automation have found 56% fewer errors.
- Real-time visibility: With automated tracking and data systems, you can access real-time insights into how your supply chain is performing, helping you spot issues early and plan ahead.
- Smarter decision-making: Access to real-time data and analytics empowers you to make faster, more informed decisions about your supply chain.
Challenges of An Automated Supply Chain
As you begin to implement supply chain automation, there are some challenges you will need to anticipate, including:
- High upfront costs: Though automation can lower costs in the long run, investing in the automation equipment, software, employee training, and technical hiring comes with a high initial price tag, especially for smaller organizations.
- Integration difficulties: It can be tough to connect new automation tools with legacy systems, and poor integration will create inefficiencies and delays in realizing the benefits of automation.
- Lack of skilled workers: Because automation technology is growing and changing rapidly, there’s a shortage of talent that understands how to work with it. As a result, it can be hard to design, manage, and scale automated systems effectively.
Top Supply Chain Management Software for Automation
Top supply chain software uses four key automation technologies to drive speed, accuracy, and adaptability:
- RPA: Automates repetitive tasks such as invoicing, order entry, and shipment scheduling.
- Artificial Intelligence (AI): Flags disruptions early and helps support real-time decision-making.
- Machine Learning (ML): Helps forecast and plan inventory with real-time, accurate data.
- Cloud Computing: Connects systems and partners for full visibility in real-time across all stages of the supply chain.
The best automation software combines these four technologies to reduce manual work, minimize errors, and help you respond faster to supply disruptions and shifts in demand trends.
Real-World Examples of Automation in SCM
Below are some ways supply chains incorporate automation right now:
- Automated Storage and Retrieval Systems (AS/RS): Warehouse systems store and fetch items automatically, avoiding manual delays and improving accuracy.
- AI-powered predictive analytics: AI in the supply chain can analyze massive amounts of data to give actionable insights quickly. For example, Unilever uses AI to analyze weather and sales trends, improving ice cream demand forecasting by ~10% in Sweden and boosting US sales by ~12%.
- IoT: Some warehouses have sensors that track product location, temperature, and condition in real time.
- Enterprise Resource Planning (ERP) Systems: ERP platforms integrate purchasing, inventory, logistics, and sales, to give you a unified view of your RPA, AI, ML, cloud, and IoT-enabled processes.
How To Implement Supply Chain Automation
If you aren’t sure where to start with automating your supply chain, here are some steps to follow:
- Assess current processes by identifying the repetitive tasks and inefficiencies in your chain
- Set clear goals, defining what you want to automate and what benefits you want to see (like faster fulfillment or fewer errors)
- Choose the right tools and platforms that can support RPA, AI, ML, and cloud integration in your supply chain
- Integrate with existing systems to ensure seamless data flow across teams and partners
- Start small by piloting automation in one area, then scale up
- Train teams and monitor results, tracking KPIs (key performance indicators) and refining as needed for long-term success
Trends Shaping the Future of Supply Chain
As you incorporate automation in your supply chain management, here are some trends to keep in mind:
- AI-driven decision making: As AI improves, supply chain adjustments will become autonomous, happening in real-time.
- Sustainable automation: Eco-friendly technologies and carbon tracking will become standard as the focus on companies’ environmental impact increases.
- Hyperconnected ecosystems: Improving cloud platforms and IoT will better link you with partners and customers on fully integrated networks.
Drive Supply Chain Efficiency With Automation and Innovation
Automation is key to a faster, smarter supply chain, and it’s quickly becoming a requirement to stay competitive.
Surgere offers smart automation and IoT tools to help you get an edge on your competition. Get real-time data in one easy platform, making your supply chain faster, more efficient, and ready for the future. Contact us to see how we can help transform your supply chain.
