3 Supply Chain Automation Best Practices

How can automation strengthen your organization’s supply chain processes? Consider these supply chain automation best practices and get advice on emerging trends and tools.

What should I automate in supply chain management?

Supply chain management can have a material impact on your organization’s speed. Turning goods from raw materials to fully assembled products in the hands of consumers takes a lot of coordination and handoffs between companies. That’s a large number of opportunities for false steps and process bottlenecks to cause downstream impacts.

Supply chain automation can serve as a secret ingredient to success as you try to gain speed, agility, and resilience. A group of automation technologies, including robotic process automation (RPA) and intelligent document processing (IDP), ideally used as part of a unified platform, can help your organization get tasks done faster, build products at greater speed, and improve back-office operations.

While mechanical robots can handle physical assembly line tasks, RPA software bots can handle simple, repetitive tasks that keep your processes moving. For its part, IDP can ingest data from documents—even if it’s unstructured—and extract relevant details like email addresses, payment information, or phone numbers. This has critical implications for business processes like billing, for example.

3 supply chain automation best practices.

While most companies have some internal automations in place, many leave other opportunities on the table due to a lack of internal data visibility. But there’s a related problem—few companies have access to data and intel from other parts of the supply chain. For example, retailers rarely see when their suppliers’ production capacity dips, leaving them unable to automate the process of ordering from a secondary supplier to make up the shortfall. Gaining more visibility and trust between links in the supply chain means opening up more automation opportunities.

Let’s examine some best practices to prioritize as you pursue greater supply chain automation, starting with the issue of data integration.

1. Get your data house in order.

Supply chain operations have proven to be incredibly complex. And the data involved is even more complex, with relevant data sets scattered across multiple systems like enterprise resource planning (ERP) systems, CRMs, billing systems, warehouse management systems, and more. Data resides both on-premises and in cloud models. Some data is structured and lives in databases and data warehouses, while other data remains unstructured and lives in a data lake. Other data hides out in emails, spreadsheets, and PDFs.

You want to connect clean, accurate data before you automate processes. (Otherwise, you’re just adding more complexity). Let’s take a clear example of how a retail company might do this. If you can collect and simplify data from purchase systems, then you can use that data to prevent shoppers from facing empty shelves. You can set up a software solution to automate the process of checking inventory systems for extra products in regional warehouses, then kick off a procurement purchase order if needed. Doing all this requires seamless data flows across point-of-sale systems, warehousing and inventory, procurement, and communication technologies. It’s critical to build your operations on a solid foundation of shareable data.

The most effective, modern way to connect data is with a data fabric. A data fabric is an architecture layer and tool set that connects data across disparate systems to create a unified view. This virtualized data layer means you don’t need to migrate data from where it currently lives, say in a database, ERP, or CRM application, on-premises or in the cloud. That’s a huge advantage given the time and cost of traditional data migrations, and one reason that Gartner named data fabric its top strategic technology trend for 2022. An automation platform with a data fabric layer can help automate complex supply chain processes across systems.

2. Take an end-to-end approach on visibility.

Supply chain operations often lack transparency. A misstep early in the process might not reach the end customer until late in the game. For example, energy blackouts in manufacturing countries can lead to factory closings. Yet, companies later in the process may be unable to near-shore their supplies or take action fast enough to stave off a supply shortage.

The fix? Prioritize ways to gain more visibility across your entire supply chain. If you’ve already followed the first step on cleaning up your own data, then you can connect to supplier systems and get intel sooner. Then, you can use business logic to enact automated contingency plans when you see a problem arising earlier in the supply chain process.

For instance, if factory blackouts could lead to a projected inventory drop, you can automate communications to request inventory from warehouses in other regions that have stock available. Or, you can automate a process to request supplies when they’re ready sooner and pay for premium freight.

3. Don’t underestimate the cultural impact of automation.

Your organization already has some forms of automation in place, whether that’s assembly line robots or automated phone systems for customer service. Employees are used to this.

But expanding your automation efforts may come with some pushback from your team. And this is important to address, because for a successful automation implementation, you want not only your employees’ buy-in but also their enthusiastic help to locate areas for further improvement. When rolling out new supply chain automation, emphasize the benefits to your employees—less time on rote processes and more time to focus on higher level, interesting tasks. They may feel threatened by the change, so reassure them that automation enhances their jobs, it doesn’t replace them. For some people, automation may open the door to learn new skills and advance to a new role. Additionally, invest in training to help people feel comfortable and effective with new processes.

All of this helps to build a culture of automation. Also consider offering financial incentives to employees for suggesting supply chain process automations that end up getting implemented. Such a program could save you money in the long run.

[ Which emerging automation trends deserve your attention now? Get the Gartner® Hyperautomation 2022 Trends Report. ]

Supply chain automation tools: 4 factors to consider.

What should you prioritize as you evaluate automation tools to help you act on these best practices? For starters, a unified platform, instead of point solutions, can help provide value quickly and comprehensively. Prioritize these four factors in an automation platform:

  • Multiple automation tools. Automation tools such as RPA, IDP, AI and business rules each serve a specific purpose. A unified platform will help you automate complex processes that involve multiple systems and business functions, which is essential for supply chain planning.
  • Data fabric. As noted earlier, a platform with a data fabric layer lets you connect data without having to move it. That means you can automate complex processes across systems and avoid time-intensive and expensive data migrations. A data fabric also eliminates worries about breaking underlying data relationships when you update a data model for something like dealing with a new regulatory issue.
  • Process mining. A platform with process mining tools helps you identify the best automation candidates and then capitalize on opportunities for improvement.
  • Low-code development. Low-code design tools let developers build processes using a visual, graphical editor, rather than having to hand-code in a development language. That equals speed and agility, two crucial factors in the world of supply chain.

[ Learn more about potential supply chain risks and how to boost supply chain resilience. Get the eBook: Bringing Clarity to Supply Chain Chaos. ]