Automation is one of the top buzzwords in the logistics industry, if not the economy at large. Alongside the rise of artificial intelligence (and no, we are not using ChatGPT to write this blog post), the growing popularity of automation has people wondering what the future of work will look like across industries. Are we all doomed to be replaced by computers and robots?
Actually, not at all. In fact, 73% of industry leaders believe that the ideal balance in warehousing includes human interaction. Nonetheless, the skepticism and fear are very real, stemming from a widespread lack of understanding about what automation actually entails.
So, what is automation? And more specifically, what is digital automation?
At Extensiv, we have almost two decades of experience creating warehouse management system (WMS) software for third-party logistics (3PL) warehouses. More recently, we acquired WMS technology for private warehouses as well as order management system (OMS) software for ecommerce brands and merchants that leverages digital automation to streamline operations, boost supply chain efficiency, and increase profitability for our customers. You could say that digital automation is central to everything we do, so we are passionate about educating people about what automation means—and what it doesn’t.
For that reason, we’ve authored this article to break down the ins and outs of digital automation and provide specific examples of automation in technology you’re probably already using. But first, let’s start with the basics.
Automation 101
Being a little technical with this definition, automation refers to eliminating manual, non-value added, repetitive processes with hardware and/or software to increase productivity, accuracy, safety, and reduce labor costs.
In plain speak, automation technology automatically performs tasks without human input. In that regard, yes, automation does replace human labor. But automation really shines when combined with a human workforce that can prioritize higher value-added job functions rather than performing repetitive, “easy” tasks.
Automation can further be subdivided into two categories: physical and digital. Physical automation is probably what first comes to mind as it includes machinery, equipment, and of course, robotics. On the other hand, digital automation uses automatic data collection and software to substitute human—often paper-based—procedures. An easy way to remember this is if it’s IT-related, it’s digital automation, but if it’s hardware-related, it’s physical automation.
Both digital and physical automation play vital roles in logistics operations, especially in warehousing, but we are particularly partial to digital automation as it provides the foundation for the modern supply chain that relies on sophisticated tech stacks to run. In the next section, we will outline some popular examples of digital automation in supply chain technology you likely already have in your arsenal.
Popular Digital Automation Examples
Warehouse management systems: WMS software, like Extensiv Warehouse Manager, automates inventory tracking, order management, customer communications, business intelligence, picking and packing, and more. It’s the foundation for a warehouse’s technological capabilities. For example, WMS software replaces manual inventory transactions with an automated system that allocates inventory to outbound consumer orders. Furthermore, orders often come into the WMS through digital automation channels like application programming interface (API) integrations that connect your warehouse tech stack to online shopping carts and marketplaces. So, the digital automation powering your WMS enables order information to flow seamlessly from origin—e.g., when a customer places an order online—to the warehouse system that automatically reserves the inventory needed to fulfill the order and moves it into a queue for pick and pack.
Order management systems: OMS software acts as ecommerce mission control, automating order management across all sales and fulfillment channels and giving merchants a bird’s eye view of their inventory at every stage of the supply chain, from initial purchase order to delivery to the end consumer. The real showstopper, though, is OMS’s order routing capabilities. When integrated with other systems in the fulfillment pipeline (think: WMS platforms), an OMS can intelligently route orders to specific warehouses based on specific rules that dictate priority such as proximity to the order destination, inventory levels, etc. As such, OMS software enables brands to reduce their shipping times and costs while avoiding overselling products, all through the power of digital automation.
Mobile barcode scanning: I know, I know, barcode scanning technically has a physical accessory in the scan gun, but mobile barcode scanning still falls under the category of digital automation since it is a method of collecting and analyzing data (and communicating it with your tech stack). In the warehouse setting, barcode scanning is an invaluable tool for reducing errors in fulfillment workflows by validating items picked and packed in real-time. Scanners paired with an inventory management system record SKUs and serial numbers to automate data-entry processes that would otherwise have to be done by hand, making them infinitely faster and more accurate.
These technologies are just scratching the surface of the wide-ranging applications of digital automation in supply chains, but the true benefit comes from pairing software systems together in a (digitally automated) tech stack. The more connected your systems are, the more consistent your data is, and the more efficient your business processes become, which is why many technology partners—like Extensiv and Anvyl—partner up to provide the ultimate tech ecosystems for our customers. Integrating different systems not only maximizes the power of digital automation but also enables you to make smarter business decisions about your supply chain.
To get started building out your logistics tech stack and to learn more about the digital automation capabilities of our software platforms, request demos from Anvyl and Extensiv today.
