Automation technology has been disrupting all areas of business operations, but perhaps none more than logistics and supply chain management. For product-based businesses, this aspect of production and distribution is the most complex and nuanced. Mistakes that happen at this stage reverberate throughout the entire operation.
Fortunately, automation offers several benefits that can streamline production and distribution. Here are six compelling benefits of supply chain and logistics automation.
Improved Accuracy
The overarching benefit of automation in logistics and supply chain management is fewer errors and improved accuracy. Human error is one of the main causes of production delays. Incorporating automation helps minimize those errors while providing valuable insights to improve response time when an issue occurs— or even before it happens.
According to Ioana Balasa, Commercial Director at rinf.tech, “By identifying, tracking, and tracing different elements of a product as it moves along the supply chain from raw materials to a finished one using various optimization hardware solutions including conveyor systems, enterprises have a chance to detect potential problems before they occur and formulate robust and timely solutions.”
This benefit of automation factors into many of the other advantages listed below.
Better Customer Service
In addition to error prevention, automation helps improve customer service in other ways. Traceability has long been an issue in the supply chain, creating customer frustration and confusion. With automation, data is readily available to notify customers of where their product is in production and when they can expect to receive their orders.
Improved Tracking and Inventory Control
Traceability and automation also benefit internal tracking and inventory control. These systems provide an accurate snapshot of current inventory, costs, and timelines to help key stakeholders make data-driven decisions.
In the past, many companies relied on manual counts to reconcile inventory records. As such, decisions were made using data from the recent past. With automation, data updates are provided in real-time, so operations managers know exactly where products are in the supply chain, up-to-date margins, and other integral information.
Improved Centralization and Productivity
Automation creates centralization for every step of the supply chain process, from the procurement of raw goods up to a customer receiving their order. Without automation, companies rely on several systems that operate in silos rather than sharing information across the board.
In addition to reducing errors, centralization improves productivity, allowing employees to accomplish more in less time. This provides numerous cost-saving benefits while removing redundancies that tie up high-potential employees. Freedom from these tasks allows companies to reallocate human resources to more meaningful work.
Consistency During Growth
Inconsistency and growth periods historically go hand-in-hand. Scaling up production to expand to new markets or meet seasonal demands adds complexity to the supply chain. Many companies struggle during these periods, creating room for inconsistency not only in supply chain operations but in quality assurance and customer service.
With manual processes, growth means increased workloads for employees. An automated system will handle new information the same, whether you have ten extra orders or ten thousand. Auditing existing processes and evaluating automation opportunities before scaling up is essential for longevity and success.
Better Compliance
Compliance is a top priority in our modern world, especially for companies that ship internationally. Failing to meet cross-border and import regulations while also meeting point-of-origin regulations is a costly mistake that can seriously impact an organization’s bottom line.
As compliance is intricate and varies significantly from one situation to another, clarifying and meeting standards often requires a lot of back and forth with customers and regulatory bodies. It’s one of the most stressful jobs in logistics and often leads to high turnover rates.
Incorporating automation can ensure compliance officers and logistics staff have access to the most up-to-date regulatory information. It also presents an opportunity to automate the data collection process, letting customers know what’s needed and how to submit it. Using automation also creates a better paper trail for when compliance audits occur.
Humans will always have a place in the supply chain. Still, these profound benefits make a strong argument for investing in automation.
