Using Supply Chain Automation to Overcome Operational Challenges

Do you face challenges with your supply chain management? Have you tried solving them by any means? Several businesses face problems that seem unsolvable. Fortunately, if you’re in the logistics sector, there’s a solution to some of the problems the sector faces. Yes, automation of the supply chain process has proved to be what we have been waiting for. The use of robots and other machines to improve the efficiency of logistics is a must-know thing for all enterprises. So, how can you use automation to overcome operational challenges? Let’s discuss and find out more.

Main Supply Chain Challenges

First things first; the modern supply chain faces new demands and challenges that its managers need to plan for well to ensure everything continues to flow smoothly. The significant challenges throughout the supply chain network include the following:

  • Increased Costs. The Return on Investment (ROI) of the network continues to be under pressure with the increasing costs coming from many areas. Such areas are; – high labor costs, rising commodity prices that raise the cost of raw materials, and increasing fuel prices. Without visibility and accountability to tackle these costs, operational expenses will continue to rise.
  • Multiple Channels to Market. This causes supply chain complexity. Since consumers obtain goods across numerous channels, market routes increase and supply chain managers have to establish ways to address these channels. For instance, e-commerce websites sell directly to people, thus require fast last-mile delivery. Normal retailers and wholesalers require large storage locations near major metropolitan areas and drop shipping retail needs fast global services for consumers to receive products faster. There are also third-party marketplaces like Amazon which supply chain businesses have to manage to ensure a good end customer experience.
  • High Customer Expectations. Rising consumer demands drive the need for enhanced speed, quality, and service. To keep up with their needs and stay on the competitive edge, businesses have to focus on providing excellent products and services. Speed is also crucial. There have to be ways to reduce the time between order placement and fulfillment.
  • Supply Chain Related Risks. Several risks, including environmental changes, economic instabilities, and trade disputes can create pressure on the supply chain. Such risks can cause significant problems throughout the network. Thus, supply chain managers must develop action plans to mitigate the risks and manage them when they occur.
  • Supply Chain Volatility. This causes problems within the entire network and leads to delays, backlogs, and other issues. Some factors for volatility include; – political conditions and protectionism that introduce tariffs across trade routes, resulting in extra fees, delays, and increased custom processing time. That can lead to slower international shipping and competitors in other countries taking advantage of lower tariffs. Also, port congestions occur due to the increase in volumes of internationally-sourced goods. That creates more pressure as ships, trains, and trucks have to wait more to load, offload, and transfer products.
  • Other Problems. These include; – new products requiring fast prototyping and development, inventory management based on balancing costs and availability, and products’ demand based on sales and marketing cycles.

How Using Automation Can Solve Operational Challenges  

Supply chain management experiences several problems that managers need to find out ways to tackle. Automation is an ideal way that companies can streamline their operations and overcome such challenges. It can help them improve the whole supply chain infrastructure and enhance the confidence of both their customers and vendors. So, how can using automation help solve these challenges? Here are some ways:

Improved Customer Service

Consumers expect highly from supply chain companies in terms of quality, effectiveness, and speed. After a customer orders a particular product, its supply chain journey begins. Human labor might lag and slow down the process. However, supply chain automation eliminates the tedious steps and inefficient paths. When an order is received, it automatically initiates the fulfillment process, thus making it faster. The duration between order initiation and fulfillment is reduced.

Keeping Up with Shipping Demands

While warehousing is a crucial part of any supply chain, the transportation of the goods is very important too. Consumers would want to see what they paid for arriving on time and in good conditions. Automation relieves employees the stress to figure out the best way to pack a truck, plan the perfect route, report transportation status to clients, and connect the right truckers to the right shipments. It can streamline it all. It keys in the best routes and automatically reports to customers.

Enhanced Operational Efficiency

Supply chain automation leads to a more efficient, precise, and cost-effective process than human labor. It can reduce the order cycle time by over half and can improve operational efficiency by more than 45%. Such substantial value-addition is what businesses need while trying to counteract their supply chain operational problems.

Improved Inventory Management

Inventory management based on balancing costs and availability is one of the challenges in the supply chain. Even so, with automation, there can be better inventory management and order tracking reduced stock inconsistencies, and bolstered demand forecasting. Supply chain managers can also benefit from automated reporting in making viable decisions for improving their business. Comprehensive reporting tools can assist in the analysis of delays, provide real-time solutions, and create future strategies for increasing efficiency and reliability.

Purchasing and Procurement Automation

It can allow companies to collect, sort, and validate vendor invoices, check for early payment discounts, schedule payments in their line of business system, and automatically send documents to collaborating departments for review. It can even automate global currency conversions such that employees don’t have to do so manually.

Increased Transparency with and Trust from Customers

Automation allows for communication with customers through updates provision during the whole order management and fulfillment process. It will provide them with constant information on where the order is at, when it should arrive, and any other relevant information. When customers receive such accurate updates, it increases their satisfaction, and in turn, their trust in the business.

Conclusion  

While it might be hard to embrace and implement these technological changes into supply chain management, automation can be the most viable solution to the challenges the sector face. So, use it to improve your operations and productivity and continue growing.