Process Automation within the Supply Chain

Katherine Manning August 9, 2022

supply-chain-automation

With a manual supply chain, you have to wear multiple hats. You have to be able to manage the flow of goods, track their progress on the road, and make sure they get where they’re going safely. Fortunately, with supply chain automation, it doesn’t have to be this way. 

Think of what it takes to manually understand how your product’s performance improves over time, what qualities are important for your customers’ satisfaction, and how those qualities interact with one another. One study found that 62% of respondents believed supply chain disruptions could significantly impact finances while 54% believed it would negatively affect a company’s reputation.

Yet, it’s not just about making sure your products are delivered; it’s also about making sure they’re delivered when they need to be and in the right condition. That means understanding how product performance changes with temperature, humidity levels, and other environmental factors.

You can’t do any of this if you’re running a manual supply chain. It’s time-consuming and inefficient, which means you’re missing out on opportunities to grow your business.  The supply chain is a complex ecosystem. It’s made up of many different parts, each with its own unique needs and quirks. That’s why it’s so important to accelerate the process without sacrificing accuracy. If you are still running your supply chain manually, you’re probably already feeling pressure from your competition (or potential competition) to make some changes because manual processes just don’t scale like technology does.

More data, more problems

The amount of data forecasted to be produced by Internet of Things devices is expected to reach 79 zettabytes by 2025. As data is generated by your supply chain and its ecosystem, it can be difficult to manage and analyze. Yet, this is still only a subset of all possible data.

Why would there be so much more data in the future?  The answer lies with the consumer. As consumers become more comfortable using mobile devices to communicate, they will generate even more information than ever before. 

They’ll also expect their suppliers to deliver new products at lower costs and higher quality levels than ever before. This can be a challenge for companies who are not prepared for all this additional data flow (and who wants to deal with an angry customer?). However, according to recent insights from Accenture, 94% of Fortune 1000 companies are experiencing supply chain disruptions.

But what if there was a way to accelerate the process? What if you could cut out some of those pesky manual labor steps and streamline everything? There is via supply chain automation solutions.

Process automation can help you improve your supply chain management by:

  • Reducing costs by eliminating human error while increasing efficiency.
  • Cutting out the time spent on tedious tasks so you can focus on essential processes like shipping goods or organizing inventory management systems.
  • Growing your business with automated and scalable systems.

Unpredictable demand

The current state of the supply chain is one of unpredictability and complexity. Many factors contribute to this, including:

  • Unpredictable demand: As consumers, we don’t always know what we want, when, or why. This can lead to fluctuations in demand that have a domino effect on the rest of the supply chain, causing sell-through bottlenecks and idle capacity.
  • Increased competition: More manufacturers mean more sellers for retailers, which puts pressure on price and profit margins for all involved parties.
  • Globalization: Shoppers are increasingly looking for products that reflect their unique identities as consumers from around the world—and they’re willing to travel long distances if it means getting something unique that can’t be found locally. The resulting explosion in global trade has created complex supply chains with many players involved at each stage along the way.

Fortunately, there are ways to make sure your SCM efforts don’t go down in flames: using automated systems that can monitor and track inventory levels at any given time while also providing visibility into production processes. 

Rising costs

We’re all familiar with the rising labor, materials, and energy costs. But what about compliance? The cost of meeting regulations is increasing too. Insurance premiums are also rising. And don’t forget about transportation expenses: Each time you move goods from one place to another (whether those places are across town or halfway around the world), it costs money—and plenty of it. 

There are also warehousing fees to factor. Finally, there’s waste disposal—another cost that’s grown exponentially over time due to increased regulation and technological advances that have made processes like recycling more efficient.

The current state of supply chains

Supply chains are complex and unpredictable. They are also inefficient, expensive, slow, and not transparent or agile—and they’re only getting more complicated as time goes on.

The good news is that supply chain managers can use automation software to improve their visibility into the state of their supply chains while also increasing efficiency, agility, and other areas that make their jobs easier.

There are many components to a supply chain, and each one can be automated to help provide better visibility into its state. For instance, most supply chains include some level of inventory management—automating this process allows managers to quickly see how much of a product has been sold and how much is still in stock. This helps them decide when to order more of the product or if they should discontinue selling it altogether. Similarly, supply chain managers can use automation tools to:

  • Receive and process orders more quickly.
  • Get feedback from customers about their experience with the order. 
  • Keep track of sales figures, which helps them plan for future demand.

Using supply chain automation makes these processes easier by eliminating repetitive tasks like entering data into spreadsheets Supply chains can be complex, unpredictable, and inefficient. They can be costly to run because they require a large team, and they’re slow at delivering products. Supply chain managers need better visibility into the state of their supply chains while also increasing efficiency and agility. Many components make up a supply chain—each can be automated to help provide better visibility into its state.

Low margins

The supply chain is where all your products start, but it’s also where you lose money. Because of all the different steps involved in getting a product from point A to point B, there are plenty of opportunities for errors and resulting costs. The more steps there are in a process, the more likely something will go wrong.

You can reduce these costs by automating manual processes prone to error—like manually entering data into a database or inputting new product information into an ERP system. You’ll be able to do this without sacrificing accuracy because you have built-in accuracy from the beginning instead of figuring out how to make manual processes accurate later on down the line (and then hope they stay that way).

Case study: Marinter imports products such as wine, pasta and cold meats among other things from all over the world.  For its main operations, the company uses ACCPAC ERP, which helps to manage several activities related with accounting, account payables, account receivables, invoices, and inventory 

The company’s ERP is very reliable, but it lacks well structured processes for notifying, following up and controlling as well as managing a lot of documents generated that are sent to manufacturers overseas. Further, this chain of activities is important for integrating the whole record to do the whole import process from the manufacturer’s site all the way through to Marinter’s facilities:

  1. Issues related to tracking containers that are about to be imported.
  2. Missing documentation required to fulfill the sanitation and health requirements, due to the nature of the products. This causes important delays and results in fines and overcharges.
  3. Zero visibility between management, control and logistics department.
  4. Several previous attempts to install other software solutions have all failed.
  5. Trailers and merchandise that are not imported at a very specific day and time, fall into penalties and storage fees.

How does automation improve the supply chain in manufacturing? The benefits of automation are not just limited to the end user. Many manufacturers have long been aware of the benefits of automation and have begun implementing it into their production processes. Benefits include:

  • Reduced costs
  • Increased productivity
  • Improved quality and customer satisfaction
  • Reduced errors
  • Increased compliance and visibility

The manual supply chain is either dying or already dead

The manual supply chain is either dying or already dead. If you’re still using it, it’s time to get with the times and start using an automated supply chain system instead.

The manual supply chain is expensive. It takes a lot of time and effort to manually manage all your inventory data, especially if there’s not one central system that can be accessed by all staff members who need access (which there usually isn’t).

Manual systems are inefficient—they rely on human error, which means they’re slow and prone to mistakes, leading to wasted time and resources. Manually managing information also makes it nearly impossible to scale up as your business grows larger.

Examples of supply chain automation in action

Many organizations use supply chain automation solutions such as digital process automation (DPA) and robotics process automation (RPA) to streamline their business processes. Common use cases for process automation in retail and manufacturing operations include:

Invoice processing

Invoice processing involves scanning and sorting bills, entering data into the system, and generating reports. The process can be tedious and repetitive for workers, who may not always have the correct equipment needed to perform these tasks.

Supply chain automation solutions can automate this process by monitoring scanners as customers scan their purchases, identifying the relevant information (such as product name or price), storing that data in a database for future use, and sending information to other systems through APIs. This enables employees to spend less time manually entering data while improving invoice entries’ accuracy.

In addition to saving time on manual labor burdens associated with invoice processing and allowing employees more time for other tasks, automated invoices are often more accurate than handwritten ones because computer programs can identify mistakes humans may miss, such as typos or incomplete fields in an entry form.

EDI gateway mapping

If you’re unfamiliar with EDI, it’s a standard for exchanging business documents between companies. It’s used in the supply chain to automate the process of order processing and invoicing. Because this is a repetitive and manual process, it’s an excellent target for supply chain automation solutions.

The first step in automating your EDI mapping workflow is to create mappings that automate the ingestion of your purchase orders into SAP or Salesforce. For example, suppose you have an order that comes over as XML. In that case, you can map aspects like customer ID or item name so that they automatically become fields on your system when they are ingested from the incoming file.

Order fulfillment

Order fulfillment is a good place to apply supply chain automation. Automation can be used to automate order fulfillment, including inventory management and payment processing.  Here’s an example of how supply chain automation solutions can be used for order fulfillment:

  • A customer places an order on your website and selects “free shipping” as their preferred delivery method. The system then automatically sends the customer a message confirming their purchase by email, text message, or phone call.
  • An employee prepares the shipment based on all available data in real-time – taking into account those who opted-in for free shipping and any other relevant details regarding past orders made by that particular shopper (i.e., size/color preferences). This information will help them determine which items should be included in this specific package, so there won’t be any surprises when they open it up at home.

An example of how this kind of system can improve efficiency is when you have multiple orders that need to be processed. The robot will automatically process each one individually; there won’t be any confusion regarding what needs to go where or who gets what product if more than one person has placed the same item on their wish list (this saves employees time). 

How does automation improve the supply chain in retail?

  • Improving the speed of the supply chain
  • Increasing customer satisfaction
  • Improving customer service

Customer service

Customer service is a good area for supply chain automation solutions. Customer service employees’ tasks are repetitive, making them a great candidate to be converted into an automated process. A few examples of these tasks include:

  • EDI gateway mapping: Mapping an incoming electronic order from a supplier to the appropriate internal systems and fulfillment processes can be done by automation with minimal human involvement.
  • Invoice processing: Automating invoice processing can save time for large companies that receive thousands of invoices each month.

In addition to these areas, order fulfillment and other related functions can also benefit from robotic process automation software.

Enterprise content management

In addition to automating process steps, automation can also help you manage the entire lifecycle of a document.

The following is an example of how automation can automate the creation, review, archiving, and retrieval of documents:

  • Automate the creation of new documents from data collected by scanning barcodes or other means.
  • Automate the review and approval of documents before they’re sent out for printing or distribution.
  • Automate the archiving process, so that old versions are saved for future reference if needed.
  • Automate retrieving archived files if someone needs access to them again for any reason

The best thing about using automation for document management is that you don’t have to be an expert in programming. All you need is a basic understanding of workflows and how to write simple scripts (or use templates). The process can be automated with just a few clicks of your mouse.

Contract monitoring

Contract monitoring is a process that involves the review and analysis of contracts to ensure compliance with internal policies and regulations. Automation can be used to automate this process.

The contract monitoring process can include reviewing and analyzing contracts to ensure compliance with internal policies and regulations. Humans usually do this, but it can also be automated using supply chain automation.

Here are a few real-world examples of automation in use:

  1. Amazon uses automation to manage its warehouse operations. It can track inventory and ensure that employees don’t miss any steps when fulfilling orders. This helps ensure that orders are shipped on time and with the correct items.
  2. Ikea uses automation for customer service interactions with its customers via live chat or email replies from an automated system instead of from a person. This frees up customer support agents for more complex tasks like product returns or order changes, improving customer satisfaction and reducing costs simultaneously.
  3. Bank of America Merrill Lynch uses process automation for its loan origination system. The bank’s software scans loan applications for required information and automatically fills in any missing fields to speed up the approval process.
  4. GEICO Insurance uses automation to process claims by reviewing insurance documents submitted by customers and automatically sending them back with information about what needs to be done to settle the claim as quickly as possible. This helps GEICO save money on staffing costs while improving customer satisfaction at the same time.
  5. In 2017, Aeropostale Inc., an American clothing retailer that operates over 600 stores throughout the U.S., began using automation to improve its order management processes by automating manual data entry tasks that were slowing down operations and causing errors in the system.

ProcessMaker helps the supply chain find continued growth opportunities while maintaining control over costs

With ProcessMaker, you can build flexible business processes around your ERP and supply chain systems. Extend capabilities by process-enabling ERP tasks easily and cost-effectively, while adding native mobility to your implementations.

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