Why Automation is Key to Navigating Manufacturing Supply Chains

A single broken link in a production line or supply chain can grind everything to a halt and create a cascade of delays, fees, and lost opportunities. Digitization of manufacturing processes and supply chain management was an early tactic to limit this harm. As manufacturers continue to modernize lines and processes, automation has become the latest target for risk mitigation, and thankfully, there’s promise.

Manufacturing supply chains are particularly complex and sensitive to disruptions. Automation tackles some concerns by streamlining processes and reducing communication or decision-making delays. When choosing an automation solution for their supply chain, manufacturers should consider several factors, including the benefits they hope to achieve, the costs of the solution, and how to set up and configure the solution. 

With the right solution, manufacturers can reap significant benefits from supply chain automation.

How automation can help you manage manufacturing supply chains

Automation is already critical to the success of most manufacturing operations. Businesses can improve efficiency, quality, and responsiveness by automating processes and tasks, while also reducing costs. You’ve likely seen this in various steps in your line as materials, parts, and goods move through production.

While early automation is focused on production, supply chain automation prioritizes the delivery of materials either inbound to your facilities or outbound to your buyers. The distinction is that this automation adapts to each shipment. Some days, your company may be able to get a better rate with a specific carrier, while a different carrier better serves shipments to other locations.

A disruption, such as closing a port or railhead, means you need to adapt and flex around the issue. That works much in the same way as if a forming machine broke down and you needed to route metal to a different unit. Automation helps meet these challenges by providing the flexibility and agility needed to respond quickly to changes.

Depending on what and how you automate, you may also see controlled costs in last-mile deliveries or less waste during final packaging and shipping. There are also opportunities to reduce errors as manual processes decline, and to see efficiency gains such as optimized savings as programs select the best deal based on price and distance. Your fulfillment improves, as does your ability to source goods and flexibly move units to facilities and customers.

Core supply chain automation benefits

Automating manufacturing supply chains can bring many benefits to manufacturers. Perhaps the most obvious benefit is that it can help improve operations’ efficiency. By automating supply chain tasks and processes, manufacturers can reduce the time and resources required to complete them. 

Your systems can always select the best carrier and shipper services based on price and speed requirements. These decisions can happen as soon as any shipment is ready and give you options for final reviews. Automation often includes notifications so your team is alerted to orders with problems or tight turnarounds. This helps your team focus on what needs their attention instead of being spread thin across many orders or actions that can run smoothly without interference.

Automating manufacturing supply chains also enhances communication and coordination between different parts of the overall manufacturing process. You can instantly share data through integrated systems to stay fully stocked or get alerts that an upstream partner is having difficulty providing parts or raw materials you need. This has been especially helpful in industries where supplier pools are small or geographically locked. Your team can make decisions as soon as a problem is seen, improving relationships, and avoiding delays.

Finally, supply chain automation impacts customer satisfaction by enabling manufacturers to provide more accurate information about delivery times and product availability. This can be particularly important for businesses that operate in highly competitive markets where even small advantages can make a big difference.

Factors to consider when choosing an automation solution

When choosing an automation solution for their supply chain, manufacturers should consider a number of factors, including the type of products being manufactured, the size and complexity of the supply chain, budget, and the skills of its workforce.

Products always make a difference. For example, when automating in your warehouse, conveyors need to be strong and large enough to move goods consistently without damaging the products or conveyors themselves. You want the same “right fit” for supply chain automation tools. That means integration with the tools you use, your carriers, and other partners, as well as the ability to track important characteristics.

For instance, if you manufacture perishable goods, all tools for your manufacturing supply chains should provide data to help you track and limit spoilage. If your supply chain tools include order management, they should include FIFO options in picking directions and scans that verify and track batch numbers.

The size and complexity of the supply chain is another important factor to consider. Companies with global will need more sophisticated automation solutions that can manage multiple suppliers, manufacturers, customs documents, import rules, and geographic rules for customers.

Create a list of the tools and support you need, such as:

• End-to-end visibility
• Analytics and customizable dashboards
• Inventory management and demand forecasting
• Warehouse management
• Supply forecasting and order automation
• Contingency planning
• Location intelligence
• Risk-mitigation and simulation

Budget is another core consideration. While low-cost automation solutions are available on the market, you’ll want a system that addresses your specific supply chain needs. If you get a simple program that requires constant updates, upgrades, or maintenance, the extra work from internal developers or contractors can quickly exceed the upfront cost of a more powerful system.

Finally, companies should consider the skills of their workforce when choosing an automation solution. While many solutions are designed to be user-friendly, some require a certain level of technical expertise to install and operate. In such cases, training employees on how to use the system may be necessary or even hiring new staff with the necessary skills.

And don’t neglect change management actions here. You’ll want leadership to be fully engaged in helping teams understand the shift and how they benefit. Teams will need assurances that automation is improving their daily work and that it is making correct decisions. If your team doesn’t feel like the tools are helping — or worse, if they feel like the tools are making tasks take longer — they’re more likely to resist the change and harm your program’s ROI.

Getting started deploying supply chain automation

The tools and support list you build for selecting an automation vendor can help you determine where to start your automation journey. If you’re new to these efforts, look for elements that impact operations positively with as little lift as possible. That can include AI forecasting and automating reports to improve inventory and supply chain visibility. If you’re tracking goods, consider options with maintenance components that can help you build longitudinal data on your operations.

Ask what processes need to be improved and which of these can be automated. From there, look at a few where you think you’ll find the biggest benefit. Finalize vendor selection based on these initial use cases and platforms that make expansion easy.

Before anything is implemented, you need robust testing in a sandbox that mimics your real-world environment. That’s a great way to review and evaluate vendors. This tests data connections and integration and the ability to respond dynamically when automation makes a mistake or points out an area of concern.

After the initial set-up and configuration phase is complete, monitoring the system closely to ensure it works properly is important. Observe data quality and flow, monitor performance metrics such as cycle time and throughput, review the accuracy of automated efforts such as creating a bill of lading, and then verify that the data generated and captured truly measures what you view as success characteristics.

What’s next for manufacturers?

The future of automation in the manufacturing supply chain looks very promising. Automation offers a variety of short-term benefits from removing manual errors to long-term effects that safeguard operations and help you test the viability of new partners or products. As the technology continues to develop, we will likely see even more widespread adoption of automation in manufacturing. That means more spending from providers and more features for practitioners.

We hope to see ever-increasing efficiency, communication, coordination, and customer satisfaction. Achieving those goals will always return to each manufacturer’s capabilities and plan.