Automating integral parts of your business processes can seem daunting, especially when your industry has weathered so much change in recent years. The rapid digital transformation of the manufacturing industry has left some companies feeling as if they are falling behind. But you don’t have to be one of them. You can reap significant benefits from technologies like supply chain automation by strategically leaning into new opportunities.
As industries advance toward a great digital future, leveraging automation has become the primary method for manufacturing to scale its capacity and profitability.
What Is Supply Chain Automation?
Supply Chain Automation is using technology to streamline supply chain processes and minimize human intervention.
It can range from improving individual processes to create entire smart factories with automation technologies such as AI and the Internet of Things (IoT).
Interconnecting machines, sensors, and devices allow for a more cohesive and responsive manufacturing ecosystem. Integrating manufacturing infrastructure enables production-enhancing practices like predictive maintenance, reduced downtime, and minimized supply chain disruptions. It can also simplify complex logistical tasks, from inventory management to order fulfillment.
Another core advantage of automation is it minimizes your reliance on manual labor and reduces the associated risk of errors.
Ultimately, implementing supply chain automation allows greater visibility and control over your logistics. This brings cost savings, improved resource allocation, and enhanced productivity.
As industries continue to evolve, supply chain automation not only increases your operational efficiency but also positions you to adapt swiftly to market changes and meet the ever-growing demands of a dynamic global economy.
Technologies That Drive Supply Chain Automation
Supply chain automation isn’t one specific technology. It encompasses several new developments that work together to overcome challenges.
Essential technologies you need to keep track of include:
- The Internet of Things (IoT): IoT utilizes sensor networks for real-time tracking and monitoring of assets, such as inventory and vehicles. Smart devices further contribute by enabling seamless communication and data exchange, enhancing operational efficiency.
- Artificial Intelligence and Machine Learning: AI and ML are pivotal in supply chain automation. These technologies power predictive analytics to anticipate future demand for materials and products. These technologies speed up decision-making, optimize inventory levels, and enhance adaptability to volatile market conditions by analyzing extensive datasets.
- Robotics and Automation in Warehousing: Robotic systems like robotic picking and Automated Guided Vehicles (AGVs) are revolutionizing warehouses. These technologies improve operations by automating order-picking processes and enhancing material movement, significantly increasing efficiency and safety within warehouse environments.
- Cloud and ERP Modernization: You can optimize manufacturing operations by transferring data and processes to cloud platforms for enhanced accessibility and scalability. This migration improves overall efficiency by providing real-time insights, promoting collaboration, and ensuring smooth communication across diverse departments within a manufacturing organization.
- Electronic Data Interchange (EDI) Modernization: This technology allows automated document processing through standardized, structured data shared among manufacturers, vendors, and business partners. It has numerous use cases. For example, there’s order processing or invoice handling. EDI enhances the efficiency of communications, streamlines data exchange processes, and fosters frictionless collaboration within supply chains.
- Application Programming Interfaces (APIs): These enable different applications to interact and share data. By automating unstructured data sharing between internal and external business applications and systems, APIs allow you to maximize the potential of your technological ecosystem.
Benefits of Supply Chain Automation
Embracing supply chain automation is imperative for manufacturing companies serious about staying competitive.
Certain integration technologies like EDI and API help handle the backend and communications of a manufacturing business. Leveraging this technology to automate document transfers among manufacturers, vendors, and business partners ensures clear, accurate, and cohesive communications, freeing up your workforce to focus on what they do best.
IoT enables the collection and merging of sensor data with business systems. This technology provides you and your teams with real-time insights and bolsters the accuracy of your decision-making.
Together, these technologies form the foundation for a highly automated and interconnected supply chain ecosystem.
Supply chain automation can deliver many other benefits for your organization. These include:
- Enhanced Inventory Management: Automation optimizes inventory levels, preventing overstock or shortages. This precision ensures efficient resource allocation and reduces holding costs.
- Reduced Human Errors: Automation minimizes human errors in manufacturing processes, ensuring consistent product quality and minimizing defects. This improves overall operational efficiency and creates a faster, more efficient production cycle.
- Better Supply Chain Visibility: Manufacturing automation provides real-time visibility into the entire supply chain, enabling proactive decision-making. This transparency allows manufacturers to optimize production schedules.
- Improved Customer Satisfaction: Efficient manufacturing processes, enabled by automation, lead to timely and accurate order fulfillment. This results in improved customer satisfaction and stronger relationships as products are delivered as promised.
- Actionable Data Insights: Supply chain automation makes it easy to generate valuable data insights that you can leverage to inform strategic decision-making. Analysis of such data paves the way for continuous process improvements, adaptive production planning, and anticipating market trends through supply chain analytics.
- Automation of Manual Tasks: Manufacturing automation eliminates manual tasks, increasing production speed and reducing labor costs. This boosts overall efficiency and allows employees to focus on tasks that require creativity and strategic thinking.
See the effects of supply chain automation in action in our Paula’s Choice case study.
What Supply Chain Processes Can Be Automated?
Numerous points along the supply chain process are prime candidates for automation. Here are some areas to consider:
- Warehouse automation is the most common form of automation in manufacturing.
Robotic picking systems play a pivotal role by automating the retrieval and packaging of goods. They reduce human intervention and improve order accuracy.
Additionally, AGVs contribute by automating material handling tasks, streamlining intra-warehouse logistics, and optimizing overall production workflows.
- Inventory management systems run by humans are unreliable due to factors such as manual data entry errors, miscommunications, and poor oversight. This can lead to inaccurate stock level reporting and order discrepancies, resulting in increased operational costs.
Automated inventory management mitigates these issues with high precision in data recording and real-time visibility.
- Automation in supply chain analytics eliminates the potential for human errors in data processing and analysis.
Automated systems can rapidly process vast datasets, providing accurate and timely insights into various aspects of the supply chain, such as demand forecasting and inventory optimization.
Organizations can then make better-informed decisions, adapt swiftly to market changes, and optimize their supply chain performance.
Find out more about how supply chain analytics can dramatically improve your supply chain in the ebook, “Why Supply Chain Analytics Are the Key to a High-Performing, Resilient Supply Chain.”
Barriers to Supply Chain Automation
So why would a manufacturer choose not to automate? Here are the key barriers that inhibit supply chain automation:
Cost: There are significant upfront costs associated with implementing automation solutions. These include purchasing hardware, software, and training employees.
While the long-term benefits of increased efficiency and reduced operational costs are compelling, the initial financial outlay can act as a substantial deterrent for businesses.
Resistance to Change: Employees may resist the introduction of automation.
This can stem from concerns about job security, fear of the unknown, or a lack of confidence in acquiring new skills.
Overcoming these barriers requires effective change management strategies, emphasizing communication, training, and fostering a culture that embraces innovation and highlights the benefits that supply chain automation can bring.
Integration with Existing Systems: Many of your legacy systems may be siloed and not seem inherently compatible with modern automation solutions.
You can manage an upgrade with careful planning, strategic investment, and a phased approach. The right integration platform as a service (iPaaS) can ensure a smooth transition without disrupting your ongoing operations.
The unified Boomi platform is an example of an iPaaS that provides a complete portfolio of the tools you’ll need to integrate your legacy systems, business applications, and IoT device data seamlessly.
How to Implement Supply Chain Automation
Ready to get on board with supply chain automation? Here’s your roadmap for getting started,
Assess the Current Supply Chain
Begin by identifying pain points and bottlenecks in your current supply chain processes to understand areas where automation can bring the most significant benefits.
Be honest with yourself about your technological readiness. Assess the current infrastructure, data management capabilities, and digital integration capabilities to ensure a seamless adoption of advanced technologies.
Choose the Right Automation Solutions
Evaluate whether custom or off-the-shelf automation systems align better with your specific needs. Carry out a thorough vetting of vendors and exercise due diligence to ensure compatibility and reliability.
Integrate With Existing Systems
Ensure the selected automation solutions will integrate with existing ERP, CRM, and other software. Make sure to address compatibility concerns and prioritize data migration and interoperability for a cohesive system.
Training and Change Management
Prepare your workforce for automation through training and change management. Prioritize upskilling initiatives to empower employees with the skills needed for the new automated ecosystem. You can effectively manage resistance to automation through strategic change management practices.
Automate Your Supply Chain With Boomi
Boomi is the supply chain automation solution that will help your business compete.
The Boomi platform connects customers and supply chain vendors, providing real-time visibility into demand, supply, inventory, shipping, invoicing, and more.
Learn more about how Boomi supports manufacturing supply chain automation, and contact us today with any questions.