The next evolution of the digital supply chain is coming fast. We all knew automation was here to stay, but we can expect to see it proliferate since the pandemic has altered supply chains across the globe. From electronics to food, global shortages have exposed gaps in every industry. The World Trade Organization expects international merchandise trade will decline by between 13% and 32% during 2020. With supply and demand changing so quickly and unpredictably, manufacturers with the most agility in their processes will be the ones most able to adapt. That is the driving force behind the increased interest in automation.
Automation as a COVID-19 response
Last month’s Thomas Industrial Survey examining COVID-19’s impact on the industrial sector revealed that one out of four U.S. manufacturers is considering expanding industrial automation as a result of COVID-19, while one out of five already has automated systems in place. The study also showed that industries most interested in automation are in agriculture and construction, followed closely by the food & beverage and transportation sectors. Aerospace and defense expressed the least interest in automation plans due to the crisis, with manufacturing, oil and gas next. In order to respond and adapt to the crisis, manufacturers are turning to real-time resource management and looking for ways to effectively converge digital and physical supply chains, while exploring reshoring options.
Technologies That Will Transform The Supply Chain
Besides the extra push from the pandemic, the drive to embrace automation during what we now call the fourth industrial revolution has been due to major labour shortages, increased demand from the e-commerce sector, and rapid innovations in technology that cannot be ignored. Supply chain technologies such as transportation management systems, warehouse management systems, robotics and autonomous materials movement will play a big role in lowering worker density within the operations process. We’ve been hearing a lot about these technologies, but what do they actually do and what is their value? Here is more information about five technologies that will transform the supply chain.
AI’s ability to collect data and self learn means it can be used throughout the supply chain to improve performance, provide forecasting, planning and eliminate redundancies. Machine learning is being used for supply chain planning by helping to predict and forecast everything from inventory to supply and demand. All this information will lead to a smarter decision making process. The way we manage warehouses is completely being revolutionized by AI. It is playing a role in everything picking from an order, to validating an order, to optimizing inventory. Gaining greater operational efficiency is the name of the game for warehouse management.
IoT helps strengthen supply chains by providing real-time visibility from production through distribution. Manufacturers can embed IoT sensors that pass through their supply chain, gaining unparalleled traceability of parts and finished goods. Retailers can now track goods from warehouse right to delivery. Perishable items can be constantly monitored in the warehouse for temperature, humidity, and other factors. Keep in mind, that even the slightest tweaks in warehouse performance can cost or save a company millions of dollars.
What good is all this data if there is no way to figure out what to do with it? All this technology that monitors and tracks everything is very overwhelming without a clear way to understand it. That is where advanced analytics enters the game. This technology is the ticket to making sense of all this information so that there is a clear benefit at the end of the day. There are three main sectors of analytics: descriptive, predictive, and prescriptive. Descriptive analytics provides hindsight into past performance. Predictive analytics addresses what will happen in the future if specific actions are taken. Prescriptive analytics is based on providing recommendations based on data and decisions. All these sectors bring value by helping to identify real-time patterns, track and analyze data accurately, improve overall operations, provide better forecasts, price optimization, prevents defects, and reduce downtime
Blockchain is a digital, distributed, public-ledger technology designed to record transactions in a secure, tamper-proof, yet publicly-accessible way that resists tampering or modification. It provides a secure, paperless solution for tracking products through every stage of their lifecycle. Essentially, it is used to monitor a product as it moves through stages and locations over time in an effective and safe manner. It creates a transparent and paperless audit trail process that results in massive cost and time savings. We are seeing it being used to improve processes and transactions such as releasing items through customs to the ability to follow fresh food items and track the source of potential contamination.
Robotic Process Automation
Robotic process automation (RPA) is the term used for software tools that partially or fully automate human activities that are manual, rule-based, and repetitive. RPA is being increasingly adopted within the supply chain to mimic the actions of human employees: capturing, replicating, and processing data, communicating with customers, as well as making judgments and learning from past actions. RPA is extremely helpful for things such as order processing and payments. freight management, returns and refunds processing, invoice management, and ERP integration.
Digital Supply Chain Twin
According to Gartner, “The digital supply chain twin is a digital representation of the physical (often multi-enterprise) supply chain. It is a dynamic, real-time and time-phased representation of the various associations between the data objects that ultimately make up how the physical supply chain operates.” The most comprehensive explanation of the complex topic of digital twins comes from Global Manufacturing, “a digital twin can be made up of separate parts to create twins of components, assemblies, people, or an entire manufacturing plant and can be combined in multiple ways to create a unified access point or gateway to numerous sources of data and information. This is not copying data, creating new data lakes, or re-architecting legacy systems, but leveraging them through the creation of events and instances in a twin’s life that provide real-time insight into demand, supply, performance and operations. It is the ability for connected objects to talk to each other and work together to provide entirely new services.”
That is just a brief look at some of the major technologies that are being used to automate the supply chain. With everything happening right now, we will be hearing even more about these technologies as manufacturers reimagine how to deal with all the current supply chain disruptions. The chart below lists which technologies are getting the most investment by retailers, manufacturers, and logistics professionals. The study showed that warehouse automation, predictive analytics, and the internet of things is getting the most investment. All predictions indicate that this will change quickly and we will be seeing even heavier investment in all these categories.