Automating the supply chain is crucial to the future of the industry, but humans will never be replaced. People have always been and will continue to be the drivers of these processes. Instead of eliminating the human employees, supply chain technology is moving humans from the repetitive data entry and numbers crunching tasks to more intelligent supply chain decision making, enabled by smart data and technology support.
While expanding manufacturing prospects continue to look very tenuous, automation is vital to creating the flexible, streamlined, and efficient operation necessary to survive the increasingly competitive and unforgiving manufacturing environment. Intelligent application and or implementation of automated digital processes are a strategic priority.
Setting up a centralized supply chain analytics center will allow a range of value-added processes such as demand forecasting, replenishment planning, inventory analytics and sales, as well as operations planning support though a shared services model. The benefits of homogeneous processes and analytics can also easily be extended across multiple business divisions without having to increase human resources.
However, while supply chain automation is a key agenda today, the technology revolution has actually been a long time coming, starting in the 1980s with the advent of powerful computing models in MRP and MRP II in the 1980s. The next generation supply chain software that evolved from this helped bring in advanced planning and optimization competences, as well as strong functional automation of warehouses and factories.
As newer technology became more affordable, the cost benefits of automation became extremely attractive and the application established a critical completive advantage. Several decades of tumultuous geo-political events and technology breakthroughs have fuelled this trend, such as the oil crisis of the 1970’s triggering innovation in cost reduction and efficiency. As China and the Far East opened up in the 1980s it became possible and cost-effective to make and sell products across different continents.
The end of the Cold-War in the 1990s lead to an increase in globalization and unchecked consumerism – driving product proliferation, reduction of product life cycles, the advent of digitalization of information and increasingly stringent government legislative regulations and requirements for safety and ethical practices.
The impact of supply chain automation is expansive across different industries. Among those most affected by transformation are hi-tech and consumer electronics firms. These are usually the sectors where cost efficiency is the most important, and technology adaptation is helping to lower the cost of product operations. This demand has made them the pioneers in adopting new advanced capabilities that disrupt well-established supply chain models.
A number of industries – the automotive, aerospace and industrial manufacturing industries – have also undergone a similar makeover. We see this change materialize in the consumer packaged goods, fashion apparel and retail industries – these segments of the economy are good examples of how the global supply chain models bring together raw materials and ingredients from across the world, before products are manufactured and distributed to global markets.
With the ability to enable many altering benefits across the organization, supply chain automation is no longer an option, but a necessity. However, manufacturers must balance this need against the impact on their workforce that is increasingly concerned about its relevance.
Rather than seeing automation as a threat, the workforce should see it as an opportunity. They can be secure that although this transformation does impact manual work by changing the way certain tasks are performed, the idea that it leads to the removal of people from supply chains operations would be quite an exaggeration. As opposed to seeing automation as a threat, the workforce should see it as an opportunity to improve their industry and their own prospects for more advanced roles.
Supply chain risk management, sustainability, global integrated planning capabilities, and the use of artificial intelligence are essential to successful operations today, and technology-savvy people will always be the key that enables manufacturers to keep ahead of the fast pace of change and establish themselves as pioneers.
Stuart Rosenberg – sturosenberg24@gmail.com
Stuart Rosenberg is an accomplished Supply Chain Management and Operations professional with a number of years experience using outstanding communication and leadership skills to coach, mentor and motivate varied professionals in challenging environments. As the founder, president and chief consultant of First Choice Supply Chain his reputation as a savvy Supply Chain leader is beyond reproach for delivering resourceful business strategies and customer focused solutions which improve margins.
With his work with several worldwide corporations – Johnson & Johnson, Cadbury, Reckitt Benckiser and Linde Gas, N. A. his far reaching experience in launching, managing and mentoring new programs and strategies resulted in greater customer confidence and improved business results.
Mr. Rosenberg is also the author of The Global Supply Chain and Risk Management.
The heightened intensity of global competition has increased the necessity of manufacturing and distribution organizations to continuously improve production, product quality, cost, and delivery. Supply Chain professionals must be knowledgeable about the relevance of supply chain concepts—adapt supply chain to customer needs, customize logistics networks, align demand planning across the entire supply chain, and differentiate products close to customers.
The goal of The Global Supply Chain and Risk Management is to assist in meeting these challenges as to the education of many supply chain practitioners, the implementation of formal supply chain contingency and control systems, and the continued edification in recent global developments for all those working in the field.
The Global Supply Chain and Risk Management is written for two groups, those who are preparing for a career in supply chain and for those professionals seeking to improve their proficiency. The book will teach the best practices, common-sense, high-tech and analytical solutions for the entire global supply chain—customer service to inventory planning to transportation to warehousing. The four major parts address the financial implications.