Automation across value chain - transforming the ways of managing logistics and supply chain

2019/ 05/08
Automation of repetitive tasks fosters achieving better results in leading industries. Among others, considering the logistics sector, it is crucial for businesses to be aware of the new waves of automation technologies in order to maintain a competitive position.

Today, efficiency became crucial for companies to survive. As we have mentioned in our one of our previous articles AI is about to take over repetitive activities in several industries including logistics, which enlighten - among other technological advances - a neat way forward automation.

Automation induces automation. It means that in case of investing in automating a certain part of the supply chain will trigger the need for improving other areas, since the aspects of the supply chain are interrelated. Based on as mentioned, let us share our highlights about triggers and ways of utilizing the advances of automation across the value chain.

Forces of automation in supply chain management 

In spite of the ever increasing awareness and need for automation, still only few companies are engaging in automating their everyday processes because of the large scale investment requirements of automation and the uncertainty of return. On the other hand, along with the risk perceived, investing in automation serve with tremendous opportunities. Cost reduction, better performance and productivity, instant availability of technological solutions, and reliability provided by automation contribute to achieving long term benefit and gaining the competitive edge. Many trends are promoting automation to be handled as a priority, among others the tendency of human resource shortage, growing demand, e-commerce boom and the evolution of technical advances.

How to make inventory management more efficient?

Maintaining a sustainable and accurate inventory is critical to meet the needs of end users. That is why investing in automation of inventory management activities provides companies with the solution for having a valid and real-time picture of inventory on hand and in transit items and also for being capable of matching stock with the ordering system. Furthermore, technology of 3D printing serves as an opportunity for sourcing by virtualizing inventory and enabling printing of certain spare parts. The technology drives your company towards more efficient inventory management through providing shorter turnaround periods, decreased material waste, increased material availability and thus customer satisfaction.

Boosting warehousing with automation activities

Considering the increase in the trend of outsourcing, warehousing activities gained a significant role in the elongated supply chain. Automation technologies assisting warehouse activities are mainly devices designed whether for movement or handling of items. Moving shelves to sorting stations is now possible with the help of swarm robots, advanced conveyors and automated or semi-automated forklifts. Handling devices are utilized in picking, sorting, and palletizing using a robotic arm with sensors, machine vision and barcode scanners.

How to utilize automation in manufacturing processes?

Automating manufacturing processes exploits the opportunities of big data. Data acquired by software serve as a tool for improving decision-making. This technology is the basis of integrating information with production schedules digitally, which allows for prompt customization of production per item while taking into account the optimal consumption of resources.

When speaking of the production area, we cannot slip over the idea of additive manufacturing. The concept enhances the interconnection among several aspects of the supply chain. It refers to generally technologies and actions that enhance existing factory production and provide added value for manufacturing processes. AM has the potential to create better performance by applying digitization is manufacturing processes. The term is usually associated with 3D printing technology.

The future of shipping - autonomous trucks and optimized routes

Caused by automating the functions mentioned before, efficiency and therefore performance will rise. This induces a significant upward shift in the frequency of shipments demanding more trucks and drivers. However, shortage of driver capacity triggers automation of forwarding. Introducing autonomous vehicles and truck pilot programs provides supply chains with the opportunity of overcoming the challenges of a shortfall in capacity. 

Furthermore, partial automation of shipping procedure is able to enhance safety and maintain vehicle control and facilitates automatic route panning and rerouting using real-time traffic condition monitoring and warnings. Data obtained by a route planning system are automatically delivered to transportation planners providing a smoother flow of information thus creating a better customer experience. Tracking routes of trucks serves with benefits not only for customers, but also for logistic companies. It implies that - thanks to the data from the past and the ability for real-time statistics and analytics - routes could be planned as optimizing time and costs of transportation relying on artificial intelligence technology.

Automation as a key factor for customer management

As mentioned before, based on automated function and information gathered, companies are able to ensure better customer experience. Also - using analytical tools - resource utilization and job optimization facilitate reliable, accurate forwarding of goods at a reasonable price.
Data can be exploited not only for past and real-time analysis, but also for predictions.

Predictive analysis provides vital information for - besides marketing and sales team - logistics and transportation department about customer requirements based on which planning of sourcing, inventory, production and transportation is possible. In this case, applying the tools of risk analysis, changing of customer need can be estimated more easily, this way companies are able to ensure better speed in response time, too. 

Blockchain technology holds a potential for guaranteeing delivery time and maintaining smooth shipment in the interest of enhancing the customer experience. The technology enables instantaneous and reliable availability of shipment documents, through which delays of despatches can be eliminated. This applies equally to automating the process of managing customs protocols and payment to subcontractors. 

Strategy for embedding automation into supply chain management processes 

Features of new technologies determining automation of the supply chain are diverse, therefore the methods of implementation of these technologies will vary. In case of blockchain implementation, companies have to consider the technology as network, where its utilization is possible only in case it is widespread among other institutions, too. Therefore, embedding blockchain into supply chain management processes require joint collaboration creating a technology ecosystem. 

On the other hand, AI rather associated with an internal process of implementation. The procedure calls for a serious effort in building in house data network, which will serve as both the basis of setting up a viable AI based automation technology and as competitive advantage in the long term. 

In spite of the diversity of technologies integrating automated processes in businesses’ activities require huge investments in R&D&I.

Source: McKinsey, Forbes, PwC