As organizations strive to enhance efficiency, reduce costs, and stay ahead in the competitive global market, adopting supply chain automation has become both an imperative and a strategic advantage. Like any transformative technology, however, there are challenges and considerations to account for. Navigating a crowded web of automated supply chain solutions requires a nuanced understanding of how to harness them to their full potential. This includes key practices that can propel your business forward and the pitfalls that can impede progress.
There’s a lot to think about when embracing supply chain automation – and so much on the line. In this blog, we uncover the strategies that drive success when adding automation to your supply chain tech stack and the missteps that could jeopardize supply chain performance. As the pressure mounts on supply chain management teams to boost efficiency, this guide offers valuable insights into maximizing the benefits and avoiding the pitfalls of supply chain automation.
First, let’s explain what we mean when we talk about supply chain automation.
What is Supply Chain Automation?
Supply chain automation encompasses a spectrum of technologies and tools designed to streamline and enhance various facets of the supply chain. From automated data collection and purchase order management to using artificial intelligence (AI) and machine learning algorithms for demand forecasting, the scope of automation is expansive.
Here are just a few examples of supply chain automation:
- Purchase Order Automation: Streamlining the creation, approval, and processing of purchase orders (PO) through automation tools reduces manual effort and enhances visibility and control over the procurement process.
- Warehouse Automation: Automated storage and retrieval systems (AS/RS), robotic arms, and conveyor systems optimize the storage and movement of goods within warehouses, reducing manual handling and improving operational speed.
- Transportation Management: Automation is crucial in route optimization, vehicle tracking, and real-time visibility, ensuring that goods move swiftly and efficiently through the transportation network.
- Inventory Control: Automated systems utilize sensors, RFID technology, and barcoding to monitor inventory levels, reducing the risk of stockouts or overstock situations while improving accuracy in order fulfillment.
Now, let’s unravel the do’s and don’ts of implementing these technologies.
5 Do’s and Don’ts of Supply Chain Automation
Do #1: Establish Clear Objectives and Goals
Before diving headfirst into choosing a supply chain automation solution, take the time to outline your objectives and set achievable goals meticulously. This foundational step is akin to plotting a course on a map before embarking on a journey – it provides direction, purpose, and a benchmark against which to measure success.
Here’s why setting clear objectives and goals matters:
- Alignment with Business Strategy: Clearly defined objectives ensure that automation efforts align seamlessly with broader business strategies. Whether the focus is on cost reduction, enhanced customer satisfaction, or operational efficiency, every automated process should contribute to these overarching goals.
- Measurable Outcomes: Establishing specific and quantifiable goals enables you to track the impact of supply chain automation on key performance indicators (KPIs). Whether reducing lead times by a certain percentage or maximizing supplier engagement rates, having quantifiable targets allows for meaningful evaluation.
- Resource Allocation: Well-defined objectives assist in allocating resources effectively. By understanding the specific areas where supply chain automation can bring the most value, organizations can strategically direct investments, time, and effort, maximizing the return on investment.
Don’t #1: Set Ambiguous Goals
While the imperative is to set clear objectives, it is equally important to avoid ambiguity. Ambiguous goals can lead to misguided efforts and an inability to demonstrate the tangible impact of supply automation.
Common pitfalls include:
- Generic Statements: Goals like “improve efficiency” or “optimize operations” lack specificity. They may sound appealing, but they don’t provide the necessary guidance for designing and implementing automated processes effectively.
- Overly Ambitious Targets: Setting goals that are too lofty without a realistic understanding of your organization’s current state and capabilities can set the stage for disappointment and frustration. It’s crucial to strike a balance between ambition and achievability.
- Lack of Stakeholder Involvement: Failing to involve key stakeholders in the goal-setting process can result in objectives that don’t resonate with the broader organization. This lack of alignment may hinder collaboration and support for supply chain automation initiatives.
Do #2: Conduct a Comprehensive Technology Assessment
Before implementing any supply chain automation solutions, thoroughly assess the available technologies. Understand the specific needs of your supply chain and evaluate technologies that align with your objectives. This ensures that the chosen solutions integrate seamlessly with existing systems and deliver the intended benefits.
Some things to look out for are:
- Compatibility: Identify solutions that are compatible with your current infrastructure. This compatibility minimizes integration challenges and reduces disruptions during implementation.
This is paramount at Anvyl. We enable our customers to connect our intelligent PO management platform seamlessly with their current tool stack for a frictionless experience. We integrate with ERPs, inventory management, fulfillment, freight, logistics, and finance tools to enable teams to move as seamlessly as possible.
- Scalability: Choose technologies that can scale with your business. As your organization grows, the automation solutions should be flexible to adapt and accommodate increased data volumes, transaction loads, and process complexities.
- Total Cost of Ownership (TCO): A comprehensive assessment includes an analysis of the total cost of ownership. Consider the upfront costs and ongoing maintenance, training, and potential upgrades. This holistic view ensures that the chosen technology is financially sustainable in the long run.
Don’t #2: Overlook System Integration Challenges
We already discussed the importance of compatibility. However, one of the common pitfalls in supply chain automation is underestimating the complexities of system integration. Ignoring potential challenges in connecting different automated systems can lead to inefficiencies, data discrepancies, and disruptions in the supply chain.
Don’t:
- Assume a Seamless Integration: Automation systems from different vendors may not seamlessly integrate with each other or existing legacy systems. Assuming smooth integration without thorough testing can result in unexpected issues.
- Neglect Compatibility Checks: Failure to check the compatibility of new automation systems with existing software and hardware can lead to data inconsistencies and errors. This oversight may impede the flow of information across the supply chain.
- Conduct Insufficient Testing: Inadequate testing of integrated systems before full-scale deployment can lead to operational disruptions. Testing should encompass various scenarios to identify and address potential issues before they impact the entire supply chain.
Do #3: Prioritize Data Security and Cybersecurity Measures
Prioritize robust data security and cybersecurity measures when implementing supply chain automation. This includes encryption protocols, secure access controls, and regular security audits to protect against potential breaches and ensure the integrity of your automated processes.
Protect your sensitive information. Automating the supply chain process involves exchanging sensitive data, from customer details to proprietary business information. A robust cybersecurity framework safeguards this information from unauthorized access, ensuring confidentiality.
Cyberattacks can also disrupt supply chain operations, leading to downtime and financial losses. Implementing security measures helps maintain operational continuity and reduces the risk of disruptions caused by data breaches or malicious activities.
Don’t #3: Ignore Regular Security Updates and Patch Management
While prioritizing data security is essential, paying attention to regular security updates and patch management is equally critical. Failing to stay current with the latest security patches for software and systems can expose vulnerabilities that cyber attackers may exploit.
For example, postponing or ignoring software updates and security patches leaves systems susceptible to known vulnerabilities. Cybercriminals often target outdated software to exploit weaknesses and gain unauthorized access.
Poor patch management practices, such as delayed or inconsistent application of security patches, can also result in a fragmented security posture. This increases the risk of security breaches and compromises the effectiveness of cybersecurity measures.
Do #4: Foster Collaborative Cross-Functional Teams
For supply chain automation to succeed, collaboration is key. Foster cross-functional teams that combine expertise from various departments, including IT, operations, finance, and logistics. This collaborative approach ensures that automation initiatives are well-rounded, considering the diverse perspectives and requirements across the organization.
Cross-functional teams bring a comprehensive understanding of different aspects of the supply chain. This diversity of expertise ensures that automation strategies are not myopic but instead consider the holistic needs of the entire organization.
Additionally, complex challenges often require input from multiple disciplines. A collaborative team can efficiently address issues that may arise during the supply chain automation process, from technical glitches to operational bottlenecks.
Don’t #4: Neglect Training and Change Management
Don’t underestimate the importance of training and change management in supply chain automation. Failing to prepare and educate employees on new technologies adequately can lead to resistance, errors, and a lack of enthusiasm for the automation initiative.
This doesn’t just include how to use new technology but why they should use it. In fact, inadequate communication about the reasons behind automation and its benefits can foster resistance. Employees may perceive automation as a threat to job security or an unnecessary disruption to familiar workflows.
Also, take into account user feedback. Users on the front lines often have valuable insights into the practical aspects of automation. Neglecting their feedback can lead to missed opportunities for improvement and hinder the overall success of the implementation.
Do #5: Embrace Continuous Improvement and Adaptability
Supply chain automation is not a one-time implementation; it’s a journey of continuous improvement. Embrace a culture of ongoing assessment, learning, and adaptation. Regularly evaluate the performance of automated processes, seek feedback from stakeholders, and stay abreast of emerging technologies.
This commitment to continuous improvement ensures that your supply chain remains agile and resilient in the face of evolving challenges:
- Adaptability to Change: Markets, technologies, and consumer preferences evolve. Embracing continuous improvement ensures that your automated supply chain processes can adapt to these changes, allowing your organization to stay competitive and responsive.
- Efficiency Optimization: Regular assessments enable the identification of bottlenecks or areas for improvement within automated processes. This optimization enhances efficiency, reduces costs, and maximizes the benefits derived from supply chain automation.
- Future-Proofing: Embracing adaptability involves staying informed about technological advancements. This future-proofing mindset ensures that your supply chain automation strategy remains relevant and can capitalize on emerging innovations.
Don’t #5: Adopt a Short-Term Focus
According to Anvyl’s research, 73% of businesses plan to scale into new channels in the next 12 months. This means an increase in the number of:
- Number of purchase orders to submit
- Volumes suppliers produce
- Shipments to track
- Locations to ship
- Number of SKUs to track
You must factor your growth plans into your purchasing decision for supply chain automation. Choosing automated systems solely to address current needs without considering future growth can result in solutions that quickly become obsolete or require significant modifications as your business expands. Furthermore, if your organization plans to expand globally, you need a solution that meets demands regarding localization, compliance, and adapting to diverse market requirements.
By considering your organization’s long-term growth, you ensure that your supply chain automation remains adaptable and can effectively support the evolving needs of your business.
Build a Forward-Thinking Supply Chain With Anvyl
To build an efficient supply chain today, brands must remain adaptable and forward-thinking. Supply chain automation empowers them to do so while providing them with the tools they need to navigate the complexities of the modern supply chain and meet demand.
At Anvyl, we’re on a mission to help you enhance your supply chain’s performance with enhanced connectivity, tracking, and transparency. Some of the world’s fastest-growing DTC retailers like Coola, Brooklinen, Native, and Harry’s, trust our technology to help them remove common burdens from their teams and allow automation to take action in their purchase order process.
Ready to automate your supply chain? Book a demo today to learn how Anvyl can help you gain visibility, collaboration, automation, and intelligence in your supply chain.
