Good Practices on Supply Chain Automation
The supply chain is an integral part of most businesses and is essential to enterprise success. In fact, according to a recent survey, 79% of companies with superior supply chains achieve revenue growth higher than average within their respective industries. On the other hand, just 8% of businesses with low performing supply chains have above-average growth.
Supply chain optimization offers numerous benefits that improve the bottom line. Here’s a look at some of the key benefits of effective supply chain management.
Enterprises are plagued with a prominent challenge of information flow. According to a recent survey, 76% of organizations lack an automated flow of information across the supply chain, and 50% of organizations say fragmented information affects their bottom line negatively. An automated flow of information removes bottlenecks and allows for the seamless sharing of information across the supply chain.
Improved Quality Control
Implementing standard minimum quality criteria enables the organization’s direct suppliers to find and work with secondary suppliers that meet these criteria. An efficient supply chain management system will monitor for key performance indicators (KPI) such as on-time delivery, scrap rates, product quality and complaint resolution turn around.
Improved Cash Flow
An effective supply chain management will help meet customer demands and efficiently collaborate with business partners which will allow enterprises to increase sales, reduce losses, and achieve growth.
Reduction in Overhead Costs
Better supply chain management facilitates accurate demand predictions. Enterprises can reduce the overhead costs associated with inventory storage, warehouse fulfilment etc. by adopting the right automation solutions to improve productivity and implementing a better inventory management system.
Customer Service Enhancement
Good supply chain management boosts your company’s customer service by allowing you to do essentially three things:
- Faster and accurate delivery of products to customers.
- Effective shipment tracking to ensure consignments reaching their destinations safely and on time.
- Accurate monitoring of inventory levels so that enterprises have the right items in stock.
Although there are a lot of benefits of an effective supply chain management, factors such as economic downturn, increased pricing pressures from customers and challenges around operational and financial performance are all having a negative impact on corporate supply chain operations.
Additionally, there is a prevalence of many siloed processes and departments in the supply chain typically. Supply chain management is riddled with challenges in bringing together so many interconnected processes. Enterprises see huge amounts of information coming from various suppliers and customer sources.
On the other hand, enterprises also have to maintain on time delivery despite the increased complexity in their supply chains. Therefore, how can an enterprise meet all deadlines and also improve customer experience?
Digital transformation, therefore, plays a key role in supply chain management, changing the way enterprises conduct operations, deliver products and fulfil orders. Automation is utilized in many areas in supply chain including:
- Order fulfilment and inventory updates
- Payments and invoicing
- Customer service
- Monitoring revenue and expansion goals
Some of the good practices in the supply chain with automation are:
Often, available data is handled manually (data collection in a system, paper-based data handling, etc.) and not updated regularly and then remains unchanged for years. Enterprises are increasingly implementing automated information management systems that can integrate siloed information and leverage that information to achieve better planning and execution.
Enterprises need to put in place a digital onboarding process to monitor supplier requests, supplier profiling and segmentation, as well as an approval workflow to automate and track supplier onboarding approvals.
Enterprises are increasingly using self-service portals for suppliers, agents, and buying teams to collaborate during the sourcing process.
Enterprises can seamlessly share real-time supply forecast updates electronically with supply partners (suppliers, factories, and agents) through automated systems. This enables factories to analyse fluctuations in demand and plan ahead collaboratively.
The order issuance process needs to be completely automated systems. Issuing orders in real time enables suppliers to respond in real time and reduce delays in order issuance and confirmation.
Supply chain technologies always evolve to meet the needs of global supply chain. According to a recent survey, some of the key technologies being adopted by supply chain and logistics companies include:
Robotic Process Automation
RPA is being used to automate and accelerate supply chain tasks that were once performed manually. In addition to repetitive administrative tasks, enterprises are employing RPA to integrate and automate data-driven activities as well. Some of the RPA use cases in supply chain are in the areas of order processing and payments, supplier selection, email automation, inventory management, logistics and shipment tracking, supplier onboarding, sales order creation among others.
Advanced analytics are increasingly being deployed in real time in areas such as product quality testing, dynamic pricing etc. The availability of supply chain data such as dynamic sales data and weather patterns provides the ability to make accurate predictions and recommendations.
Supply chain management has been one of the leading beneficiaries of IoT and the technology is facilitating improved efficiency, performance, and business output through connected supply chain management. IoT finds application in live tracking of movement of goods, in-store merchandise tracking, fleet management and several others.
Through self-learning and natural language, AI solutions can help automate various processes in the supply chain such as production planning, demand forecasting or predictive maintenance. According to a recent survey, 61% of executives report decreased costs and 53% report increased revenues as a direct result of introducing artificial intelligence into their supply chains. AI provides enterprises with end to end visibility, reduces manual work and facilitates informed decision making.
A well thought through supply chain automation strategy is at the heart of achieving intended benefits. Supply Chain teams that can leverage automation earlier will stand to immense benefits as they gain huge shifts in efficiency and getting closer to their customers.