Supply Chain Automation Examples from 4 Industries
Check out these examples of supply chain automation to learn how process automation tools help companies deal with disruptions.
While supply chain disruptions like political conflicts and weather disasters are beyond your control, your processes are in your hands. Anything you can do to make those processes more efficient, predictable, and resilient will help you overcome unexpected supply chain challenges. This is where supply chain automation comes in. With automation tools, you can apply the right worker to the right job, combining the power of automation tools and human employees. Automating the supply chain process where possible can cut costs, increase accuracy, and help future-proof your business.
Here, we’ll explore examples of supply chain automation across four industries. You’ll get ideas for how your company could apply automation to your own processes and avoid supply chain chaos.
Supply chain automation, defined.
Supply chain automation means applying automation tools, where possible and logical, to your supply chain processes so that you can cut costs, improve accuracy, and increase efficiency. This doesn’t mean applying automation to every step: some tasks are best left to humans, others need a human to be in the loop, and others can be completely automated. This saves time for human workers on monotonous tasks, frees them up to focus on high value work, and ensures your critical processes move quickly and accurately.
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Automation tools you could apply to a supply chain process include things like robotic process automation (RPA), business rules, and AI-powered intelligent document processing (IDP). These tools work together to automate various steps in a process. Here’s an overview of what these systems can do:
- RPA: RPA uses bots to conduct simple, repetitive task automation. It can also integrate with legacy systems that don’t have existing APIs.
- Business rules: Business rules instruct technologies like RPA to act in a certain way, based on if-then rules.
- Intelligent document processing (IDP): IDP extracts data from structured and unstructured documents and turns it into digitized text.
[ What could your organization do with these automation tools? Check out 200 use cases for how you could use RPA and IDP. ]
Supply chain disruption examples.
But what are you really up against that would require the support of automation? These are just a few examples of supply chain disruptions that could get in your way.
Public health changes: If you had anything to do with supply chain in 2020, you’ll recognize the first of these challenges: public health changes. The COVID-19 pandemic caused plant closures and border lockdowns, which didn’t help when demand spiked. It’s not just the global pandemics though. Local or community epidemics, or even health issues at a factory (as was the case with the infant formula shortage) can cause problems as well.
Geopolitical conflicts: Political tensions between nations and trade wars all lead to downstream issues for companies and consumers. Material shortages, shipping delays, price increases—all of these are typical supply chain disruptors when unrest arises.
Rapid demand shifts: The pandemic led to a rapid rise in spending on consumer goods (think toilet paper and canned foods). Additionally, the increase in remote work and people deciding to relocate put a strain on utility companies and telecommunications providers, who had to build new infrastructure unexpectedly.
Shipping delays: Remember the Ever Given? It’s the ship that got wedged sideways in the Suez Canal and blocked shipping for days. While this isn’t your every-day occurrence, anything like border closings, weather, or health events can put shipping timelines at risk.
Climate problems and natural disasters: Blizzards, tornadoes, hurricanes, earthquakes—all of these can create labor losses, damage materials or goods, increase prices, and cause transportation issues. Texas’s unexpected 2021 freeze comes to mind (and it’s all too easy to think of more examples).
Labor shortages: Even though the current labor shortages aren’t permanent, any change to the labor market, like strikes or a decrease in skilled workers, can limit your ability to deliver on promises.
4 supply chain automation examples.
To understand how automation can ease pressures like these on the supply chain, look at five actual examples across industries.
1. Manufacturing
Scenario: An electronic device chips manufacturer has a team of chip engineers with purchasing power to order new materials. Because the company has multiple databases for inventory, the engineers have a difficult time getting access to inventory data, so they end up buying surplus materials. Material often goes unused and needs to be stored until a similar project comes up, eating into the company’s cash flow.
With automation: A warehousing inventory application lets engineers check if the part they need has already been purchased and stored elsewhere in the organization. By doing this, they cut down on time spent dealing with suppliers, reduced wasted materials, and reduced operating costs.
Consider these other ways manufacturers use supply chain automation:
- Connect to vendor systems with RPA bots to improve visibility and collaboration across the entire ecosystem.
- Use IDP to shift away from paper processes.
- Enhance resilience by bringing new vendors into the fold more quickly and supporting nearshoring or onshoring efforts.
2. Telecommunications
Scenario: A telecommunications company needs to launch 5G technology into a subscriber base of 10 million. This launch creates more than 10x the number of business activities to manage, much beyond the company’s capacity.
With automation: The company develops a platform for automation and maintenance for their 5G network that unites five legacy applications and multiple other existing systems. The company not only handles the increased activity but also gains development speed.
Consider these other ways telecommunications companies use supply chain automation:
- Connect with supplier systems to help source and receive materials like semiconductors and chips on time to combat product and inventory constraints.
- Improve end-to-end visibility into 5G network upgrade efforts and predict upcoming shortages of materials.
- Automate communications with suppliers about replacement parts or maintenance issues.
3. Retail
Scenario: When truck drivers make deliveries for a major supermarket chain, they have to use spreadsheets, multiple software systems, and a large, printed manifest in order to track deliveries. Aside from this being difficult to manage on the driver’s end, it makes routing drivers tough and makes accounting’s job of reconciling transactions and activities difficult and time-consuming.
With automation: The supermarket chain creates a mobile application that drivers can use to pick up assignments, check in, and get delivery information. The company decreased driver turnaround times, cut reconciliations in half, and saved more than $1 million in the first year.
Consider these other ways retail companies use supply chain automation:
- Note any shipping delays by connecting with supplier and vendor systems. Quickly add integrations to a workflow with smart services or use RPA to connect a system without an API.
- Keep shelves stocked and improve last-mile efforts by gaining visibility into distribution centers and the status of delivery drivers.
- Enhance service by automating customer communications with smart services.
4. Transportation
Scenario: A commercial fleet management company has employees creating documentation manually at rental counters, which is impacting rental transaction times and customer satisfaction scores.
With automation: Several low-code applications help the company move away from using paper during the rental process and related processes such as accident claims. Another application tracks vehicle conditions to keep rentals in working order. The company reduced rental transaction times by 50% and saw a 10x increase in Customer Satisfaction Index scores.
Consider these other ways transportation companies use supply chain automation:
- Sidestep labor shortage and workforce challenges through automation that makes existing workforce more effective and productive.
- Communicate more effectively with customers by connecting systems and automating communications, providing greater transparency.
- Support driver check-ins, on-time deliveries, warehousing, and fulfillment by delivering modern applications that connect to existing warehouse management systems, enterprise resource planning (ERP) systems, and transportation management systems.
Supply chain automation tools: 4 tips.
When you’re evaluating supply chain automation tools, time to value is crucial. Use these suggestions to find a platform that can provide value quickly and comprehensively.
Consider a platform that:
- Has multiple automation tools. As you’ve seen in these examples, each automation tool, such as RPA or IDP, serves a specific purpose. You’ll be able to design efficient processes when you have access to multiple automation tools in one unified platform.
- Simplifies working with data. Rather than waiting for integrations or migrations, look for a platform with a data fabric layer. This allows you to connect data without having to move it, so you can automate complex processes across systems.
- Has process mining. You have to be able to see how the process actually works in order to automate it effectively. Then, once you’ve built a process and incorporated automation, you must examine how well it’s working. A platform with process mining tools built in helps you capitalize on opportunities for improvement.
- Cuts development time. Developing processes in a low-code environment takes less time than traditional coding, so IT and business teams can move more rapidly and gain agility. Low-code tools let teams create full applications from business process diagrams, for example.
[ Learn more about potential supply chain risks and how individual industries can boost supply chain resilience with the eBook: Bringing Clarity to Supply Chain Chaos. ]
