Today’s Supply Chains Are Facing a Labor Shortage—Automation Can Help
Empty grocery store shelves and food shortages. Long delivery times for everyday packages. Order backlogs on essential supplies, material and hardware that can take weeks—or even months—to receive.
This is the reality for consumers across the US.
The reason? Today’s global supply chain continues to face tumultuous and widespread disruptions. While there is a myriad of reasons behind this, one of the key issues plaguing nearly every disruption along this interconnected network can be found in the latest news headlines: Workers are resigning from their jobs in record-breaking numbers.
Without the staffing resources to keep supply chains running efficiently, the process of getting operations back on track is slowed—or even impossible. The container ships off the coasts don’t have the longshoreman to unload them. A shortage of truck drivers means goods can’t get from the ports to warehouses—and ultimately to retailers and consumers. And without enough manpower to oversee inventory and warehouse operations, consumers are faced with increasing backorders and long processing times.
To solve these challenges, many businesses are looking to digitize their supply chain and tap into the power of automation, machine learning and AI—empowering them to produce and distribute more with less human workforce.
In this blog post, we break down the five ways that supply chain automation can fill today’s workforce gap and solve operational challenges.
How Automation Can Streamline Your Supply Chain
1. Simplify your procurement process: Managing incoming purchase orders and requisitions is a tedious process that can lead to bottlenecks. Spreadsheets, faxes and emails have long been at the core of procurement processes—and along with these manual tasks comes an increased opportunity for data entry errors, lost communications and missed deadlines.
By minimizing the manual entry of data and other tasks through automation, you can fast-track your procurement process (and reduce the risk of human error along the way). With automation software, things like spend analysis, vendor management, supplier bids, contract and invoice management, and the actual purchasing and payment processes can be automated. This ultimately helps you decrease your processing times, increase efficiency and realize greater visibility across your entire supply chain—helping you better understand how the materials received from the supplier will impact production schedules, payment terms and consumer demand.
2. Streamline inventory management: Between manually counting and monitoring inventory, tracking data on each item and ensuring products are in stock, inventory management can be a time-consuming task. With automation, however, you can increase your inventory visibility, reduce the risk of human error and expedite your operations—all without needing extra headcount to get the job done. For example, an automated inventory management system gives you real-time inventory counts of your stock. This means your inventory levels will automatically update every time you make a sale—no manual tracking or counting needed. You’ll also be able to monitor low stock levels in real-time. By setting a threshold, your system can automatically identify re-order points for each product, and in turn help you avoid disruptive stockouts.
Automated inventory management can also help you efficiently track inventory location. Whether an item needs to be transferred between warehouses or a shipment needs to be expedited to prevent back orders, you’ll be able to track the movement of your products at every stage. Most importantly, you’ll have accurate insight into how much product you have on hand to promise to customers. Without the right inventory visibility, customer demand will not properly place allocation on stock. This can ultimately lead to a decrease in customer satisfaction.
3. Introduce more efficiency and visibility into freight management: Warehouses are integral parts of any supply chain, but the transportation of goods is equally vital. And as supply chains become more complex and customer expectations continue to rise, building and maintaining a reliable freight management system has become essential to long-term business success. This is where applying supply chain automation across your freight system comes in—helping you seamlessly manage complex logistics without being overwhelmed by tedious data entry and workflow monitoring.
For example, instead of spending time figuring out the optimal way to pack a truck, plan the most efficient route, report transit status to customers and connect the right truckers to the right shipments, automation software can track and analyze all of this data—giving you the insights you need to streamline and optimize operations. Without the need for a large team to figure out trucking details, employees can spend time on larger business initiatives while your automation keys in the best routes and automatically reports real-time delivery data to your consumers. This information can also be directly relayed to customers and used for freight spend analysis.
4. Gain better insight for supply and demand forecasting: What is the top pain point for business executives? According to Gartner, there’s a clear answer: demand volatility. Too many factors—from weather fluctuations to posts by social media influencers—can have a huge impact on the market, and ultimately, your business.
That’s why, in a world that’s becoming increasingly complex and fast-paced, supply chain agility is critical—and your ability to forecast demand patterns early can help your business pivot quickly. But when it comes to properly executing demand planning, things can get really complicated, really fast, especially as huge amounts of unstructured data continue to pile up.
By implementing automation and machine learning capabilities, you can structure and analyze this data with a push of a button. Machine learning utilizes internal and external data to make more accurate demand predictions, including things like past financial and sales reports, marketing polls, macroeconomic indicators, social media signals, weather forecasts and more. Then, by analyzing all of this data against forecasting algorithms, companies can quickly identify patterns, gain insights into future demand and spot new market opportunities. Machine learning can also be used to detect issues in the supply chain even before they disrupt the business. All of these things ultimately yield more accurate demand forecasting, which can reduce customer complaints, allow for production utilization and reduce costs of obsolete inventory write-offs.
Unlike manually parsing and analyzing data, machine learning forecasting also boasts the ability to be “always on”—meaning that your forecasts can be programmed to update automatically as more recent data is aggregated. This empowers your business to rapidly adapt to change.
5. Predict maintenance issues before they happen: Keeping your production floor operating optimally requires constant monitoring and maintenance of your machines. But with limited staff and expertise, many companies fall behind—leaving them with faulty equipment and serious operational disruptions.
To overcome this challenge and keep their production floor operating at peak levels, many businesses are implementing a digital twin strategy. A digital twin is a digital representation of a process, product or service. It uses real-time data to create realistic virtual models, empowering businesses to monitor, test and plan improvements to their products or equipment.
For companies looking to optimize their production floor, they can tap into digital twinning to solve problems in advance through predictive maintenance. By connecting the virtual environment to the physical prototype, the digital twin continuously gathers data and information through sensors. Then, by analyzing this data, companies gain immediate insight into the current health of a system, gradual changes and potential problems—like if a critical machine part is almost worn out and needs to be replaced. This ultimately helps companies avoid more serious damage and unnecessary downtime, saving time and money.
How to Digitize Your Supply Chain and Automate Processes
As consumer demand continues to grow at rapid rates, supply chains will need to adapt faster. But with so many time-consuming processes that go along with managing a successful supply chain, keeping up with demand can be a challenge—especially as more and more companies are faced with critical labor shortages. By automating many of these workflows, operations and processes, businesses can more efficiently plan, forecast and manage the flow of goods from raw materials through production, distribution and delivery.
To help assess, plan and implement a digital supply chain, many organizations look to external partners for support. Navisite provides end-to-end supply chain expertise and solutions to help businesses achieve the promise of a digital supply chain—including tapping into the power of automation, machine learning and AI. We work with stakeholders across our customers’ enterprise—senior business leaders, functional and IT leaders—to assess their goals, barriers and requirements, and provide highly tailored supply chain services that deliver measurable benefits and continuous improvement. To learn more, read about our supply chain services.