How Robotics and Artificial Intelligence Can Automate Supply Chains
Automation technology is being widely used in different industries, especially in the supply chain field. Today, it has become an important part of supply chain management software. In the future, with the further development of automation technology, the entire supply chain and supply chain management software will undergo major changes. This will lead to more efficient logistics and inventory management, improve the speed and quality of production and delivery, and in turn promote the development and competitiveness of enterprises.
Forward-looking supply chain players are ready to deal with the new situation. CIOs should take the lead in ensuring the best outcomes for their organizations, and understanding the role of robotics, artificial intelligence, and automation in the supply chain is critical.
What is supply chain automation?
Supply chain automation refers to the use of technological means to reduce or eliminate human participation in supply chain activities. It covers a variety of different technologies and methods, such as machine learning, robotics, and artificial intelligence. Therefore, automation can be implemented in different ways at various points in the supply chain.
Supply chain automation has the potential to solve many current problems in the manufacturing industry, such as worker shortages, material shortages, inaccurate demand forecasts, transportation delays, etc. As supply chain automation technology matures and prices fall, it will become an integral part of the industry and not just an add-on for niche use cases.
What supply chain processes can be automated?
In theory, almost all aspects of a supply chain can be automated, but in practice, certain steps are closer to being fully automated. For example, supply chain tracking, inventory management, warehouse management, shipping, and back-office tasks are among the most common automated processes today. These automated processes increase efficiency, reduce the risk of errors, and save businesses time and money.
(1) Supply chain tracking
The supply chain involves multiple links, including raw material procurement and finished product transportation. Tracking system ensures every shipment is sent and received on time.
If a pattern emerges for a specific destination, carrier or route, the tracking system can alert relevant teams. For example, if severe weather in a particular area may affect delivery times, the customer service team can proactively notify customers of delays. Additionally, if a carrier has frequent delivery issues, business leadership teams can use the data to make informed decisions, such as whether to continue working with them. Such a tracking system can not only improve customer satisfaction, but also help companies optimize supply chain management and improve overall efficiency.
(2) Inventory Management
Proper inventory management is key to preventing overstocking and understocking, both of which can cause major problems and erosion in the supply chain Corporate profits.
Fortunately, demand planning analysis can predict whether demand for a product will change in the future. The inventory management system then generates automatic notifications when a SKU is low to prevent frustrating out-of-stock situations.
(3) Warehouse Management
Supply chain automation has changed warehouse management in many ways. For example, SCM software can automatically receive and confirm orders, while box algorithms recommend appropriately sized pallets to consolidate shipments and reduce waste.
Additionally, warehouse management tools can help eliminate or optimize repetitive tasks. For example, picking systems can help workers find products faster. Robot-guided vehicles, such as those used by Amazon warehouses to fulfill orders, can retrieve packages without human help.
(4) Transportation
Due to huge technical challenges, transportation automation still has a long way to go, but it is full of hope for the future of supply chain automation. This type of automation involves self-driving vehicles, alternative delivery equipment and route optimization technology.
Once they become feasible, self-driving trucks will solve the long-distance truck driver shortage, while the transition to delivery drones will reduce the need to use trucks and vans for last-mile deliveries. In the meantime, transportation automation would be better off focusing on optimizing delivery routes and vehicle maintenance schedules.
(5)Billing
Thanks to the power of artificial intelligence and optical character recognition (OCR), documents such as orders, receipts, and invoices can be automatically captured and processed. This reduces repetitive manual tasks, ensures greater accuracy, and makes the entire billing process more efficient.
Benefits of Supply Chain Automation
Automating all aspects of the supply chain holds great promise for businesses of all sizes.
First, automation allows human workers to spend more time and energy on value-added tasks. It also minimizes human error in tasks such as data entry, where there is a risk that information may be duplicated, incorrect or lost.
Additionally, the digital paper records created by SCM software increase visibility into all aspects of the supply chain. This enables business leaders to make more strategic decisions based on real-time data.
Supply chain automation also makes it easier to maintain organizational agility. When the unexpected happens (such as a natural disaster, widespread raw material shortages, or the COVID-19 pandemic), SCM software can help estimate the impact and develop a response plan.
These combined factors lead to faster production processes, higher profits and greater customer satisfaction.
Limitations of Supply Chain Automation
Despite the significant benefits, supply chain automation is still in its relatively early stages. As a result, there are some limitations for businesses looking to go all-in on supply chain automation.
Many technologies (especially artificial intelligence) have not yet fully matured and reached their full potential. This means that currently only the most menial, rote tasks can be automated. It takes time for the software to handle the more complex tasks currently done by humans, which is why so much SCM software currently focuses on the backend.
Cost is another significant challenge. This is especially true for robots, which are expensive to install and require ongoing maintenance to keep them running properly. As technology improves, costs will come down, but for now, it remains a significant barrier to entry for many supply chain entities.
That’s why big companies like Amazon are currently paving the way for supply chain automation, especially when it comes to robots and self-driving cars. It will be some time before small businesses with limited budgets experience the benefits of supply chain automation.
The Future of Supply Chain Automation
While supply chain automation is currently in a relatively early stage of development, it will eventually become a bargaining chip in maintaining manufacturing competitiveness, and this may happen sooner or later.
Even if their companies don’t currently have the budget to implement all types of automation, supply chain company CIOs need to understand what their competitors are doing and how automation will impact their own supply chains. To stay relevant over the years. And choosing SCM software with machine learning or artificial intelligence capabilities is a good starting point.
Hardware-intensive automation tools like warehouse robots and self-driving cars are more of an investment, but as their reliability increases and their costs fall, they will become available to smaller supply chain players. Understanding the benefits of robots in the supply chain and preparing accordingly is key.
In the near future, CIOs should focus on updating legacy systems to prepare for these coming changes. They should also hire employees with skills in key areas such as artificial intelligence, data science and robotics so that they already have the staff they need when implementing new supply chain automation initiatives.
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