3 Supply Chain Automation Best Practices

While most companies have some internal automations in place, many leave other opportunities on the table due to a lack of internal data visibility. But there’s a related problem—few companies have access to data and intel from other parts of the supply chain. For example, retailers rarely see when their suppliers’ production capacity dips, leaving them unable to automate the process of ordering from a secondary supplier to make up the shortfall. Gaining more visibility and trust between links in the supply chain means opening up more automation opportunities.

Let’s examine some best practices to prioritize as you pursue greater supply chain automation, starting with the issue of data integration.

Supply chain operations have proven to be incredibly complex. And the data involved is even more complex, with relevant data sets scattered across multiple systems like enterprise resource planning (ERP) systems, CRMs, billing systems, warehouse management systems, and more. Data resides both on-premises and in cloud models. Some data is structured and lives in databases and data warehouses, while other data remains unstructured and lives in a data lake. Other data hides out in emails, spreadsheets, and PDFs.

You want to connect clean, accurate data before you automate processes. (Otherwise, you’re just adding more complexity). Let’s take a clear example of how a retail company might do this. If you can collect and simplify data from purchase systems, then you can use that data to prevent shoppers from facing empty shelves. You can set up a software solution to automate the process of checking inventory systems for extra products in regional warehouses, then kick off a procurement purchase order if needed. Doing all this requires seamless data flows across point-of-sale systems, warehousing and inventory, procurement, and communication technologies. It’s critical to build your operations on a solid foundation of shareable data.

The most effective, modern way to connect data is with a data fabric. A data fabric is an architecture layer and tool set that connects data across disparate systems to create a unified view. This virtualized data layer means you don’t need to migrate data from where it currently lives, say in a database, ERP, or CRM application, on-premises or in the cloud. That’s a huge advantage given the time and cost of traditional data migrations, and one reason that Gartner named data fabric its top strategic technology trend for 2022. An automation platform with a data fabric layer can help automate complex supply chain processes across systems.

Supply chain operations often lack transparency. A misstep early in the process might not reach the end customer until late in the game. For example, energy blackouts in manufacturing countries can lead to factory closings. Yet, companies later in the process may be unable to near-shore their supplies or take action fast enough to stave off a supply shortage.

The fix? Prioritize ways to gain more visibility across your entire supply chain. If you’ve already followed the first step on cleaning up your own data, then you can connect to supplier systems and get intel sooner. Then, you can use business logic to enact automated contingency plans when you see a problem arising earlier in the supply chain process.

For instance, if factory blackouts could lead to a projected inventory drop, you can automate communications to request inventory from warehouses in other regions that have stock available. Or, you can automate a process to request supplies when they’re ready sooner and pay for premium freight.

Your organization already has some forms of automation in place, whether that’s assembly line robots or automated phone systems for customer service. Employees are used to this.

But expanding your automation efforts may come with some pushback from your team. And this is important to address, because for a successful automation implementation, you want not only your employees’ buy-in but also their enthusiastic help to locate areas for further improvement. When rolling out new supply chain automation, emphasize the benefits to your employees—less time on rote processes and more time to focus on higher level, interesting tasks. They may feel threatened by the change, so reassure them that automation enhances their jobs, it doesn’t replace them. For some people, automation may open the door to learn new skills and advance to a new role. Additionally, invest in training to help people feel comfortable and effective with new processes.

All of this helps to build a culture of automation. Also consider offering financial incentives to employees for suggesting supply chain process automations that end up getting implemented. Such a program could save you money in the long run.

[ Which emerging automation trends deserve your attention now? Get the Gartner® Hyperautomation 2022 Trends Report. ]