A future-proofed automation capability: tackling manufacturing supply chain disruption

4 min read

By Erik Gaarder, IT Evangelist and Senior IA Business Consultant, Digital Workforce.

There have always been supply chain challenges. Visibility, connectivity, capacity, inventory management; just some of the issues that are becoming more critical as the speed of change has accelerated through technological, political, environmental, and global health disruptions.

Throughout this, manufacturers have sought to become more efficient, access new resources and keep costs manageable. In doing so, their supply chains have become more complex. Many have tried to manage this through technology, by investing in new solutions to fix the challenges. The problem is, they lack the capability enablers in-house to keep up with the rapid rate of change. It’s also not uncommon for them to solve one problem, only to create completely different new ones. In other instances, a solution can work really well in the short-term but soon becomes outdated and not fit for purpose.

At the same time, shareholder pressure creates a focus on delivering short-term results, and so manufacturers end up focusing on fixing today’s problems, without looking to the future. The pandemic has ruthlessly exposed the lack of visibility and connectivity in most modern supply chains, while the limitations of approaches and methodologies such as Just-in-Time (JIT) have been laid bare.

Changing mind set: the value of automation

Frequently, companies will rush to deploy new solutions to fix these issues, but without a strong foundation, a coherent team structure and a clear vision, you aren’t guaranteed results. With supply chains, it’s important to fix the issues at hand, but for long-term success you need to have a robust and agile supply chain in place.

To find a robust solution, there must be a good understanding of the current situation. Supply chains have become more automated, but often in a haphazard manner. It’s not hard to see why many organizations lean towards automating increasingly complex processes; as McKinsey & Co notes, half of today’s work activities could be automated by 2025. In supply chains alone, automation technologies can help improve purchasing and procurement, track delivery, accurately handle demand forecasting, accelerate the onboarding of suppliers, enable predictive maintenance, and optimize production, to name but a few benefits. Indeed, many organizations have already seen significant benefits in rapidly automating certain areas of their operations during the pandemic.

What manufacturers are missing is a business process automation capability which would allow them to understand how their tools (whether hardware or software) support their abilities to enable business value. Only by adopting this mindset will manufacturers future-proof today’s solutions against tomorrow’s challenges. In doing so, they can not only fix problems, but also seize future opportunities; in other words, they will be able to extract maximum business value.

Enabling autonomy: building a business process automation capability

To make that crucial mindset switch, manufacturers need to become more autonomous. Organizations that can respond quickly to market changes, whether new crises or opportunities, and operate without disruption, will be able to create more business value than their competitors and will continue to be successful.

Political disruption near a key supplier? A process is triggered to switch to an alternative. Medical crisis closing distribution points? The logistics network is adapted to accommodate, while production is altered to prevent a backlog of goods building up.

What about opportunities, such as a specific market experiencing a sudden growth in demand? Production is scaled up, logistics partners engaged to deploy increased capacity to the distribution network and go-to-market functions are provided with the necessary resource to supply the demand.

It might sound futuristic, and far off but even those that are just at the beginning of their automation journey are closer than they think. Anyone that’s deployed technology like robotic process automation (RPA) is already starting to build that capability. Those that haven’t should just get started. Tools like application programme interfaces (APIs) and RPA were the first generation of modern automation capability enablers as they showed the business world a way to realize value quickly.

This is just the start, however. Technologies are converging into a strategic automation capability that will transform the way supply chains operate. These tools are being deployed in a digital workforce that, alongside employees, allows manufacturers to manage any process end-to-end.

This digital workforce is made up of task executors (such as RPA and APIs), interpreters (intelligent document processing, or IDP), communicators (chatbots), artificial intelligence and machine learning-driven decision makers, and process analytics. The transparency or visibility is enabled through human-in-the-loop interfaces which allow employees to see the full process. All of it is controlled by a process orchestrator that supports both human and digital workers transparently and with agility.

Through this, manufacturers can build a business process capability that creates the foundation for a continuous journey towards end-to-end automation. This is the platform for the autonomous supply chain and business, one capable of performing well into the future and being able to handle whatever economic and geo-political shocks emerge along the way.

Your process automation journey: now is the time to start

Supply chains have always had problems; the mistake many organizations make is by only tackling these challenges in a way that solves the issue today, without a thought for how those solutions will work in the future.

To change that, manufacturers need to think about how they can be proactive in creating more business value: fixing the fundamental challenges of the supply chain is a critical element in this process. That means shifting the mindset from tools to capability, understanding what they’ve already automated, and looking at how that can be joined together to provide the foundation for fully automated, and eventually fully autonomous, organizations.

As the global economic and geo-political situation looks set to remain challenging well into next year, go-ahead organisations are already implementing the next generation of business automation to keep their operations running as efficiently and cost-effectively as possible. The companies who are forward-thinking enough now to embrace this new business process capability, will not only reap the benefits in the short term, but will gain a competitive advantage well into the future.