Is automation the only answer to driving efficiencies in the supply chain?

Automation is gaining significant traction in supply chain, but Peter Jones, Founder and Managing Director at Prological argues that despite its place, automation isn’t the panacea to solve all problems.

Where do supply chains use automation? In most, if not all major aspects. It’s no secret automation plays a huge role in the movement of goods, especially following unprecedented disruption and demand during COVID-19 lockdowns throughout the world.

While automation does have an important role in a successful supply chain operation, the knots causing strains in supply chains aren’t untangling because of automation itself. These strains tend to reflect pre-existing issues in the fundamentals of the supply chain.

So, is there any point investing millions of dollars in automation if your business does not have the fundamentals of its supply chain sorted?

At Prological, we have a few philosophies when it comes to the supply chain and the apex principle is getting the basics right. I have my own simplified understanding of supply chain: don’t touch the product, don’t move it and don’t stop it. Every time one of these things happens, you have added time and cost.

Before any commitment to invest in automation is made, it’s important to realise it’s not just about exploring the benefits automation brings, but how some of those benefits could be realised by optimising the fundamentals of your operation in the first instance.

Once you have worked through this critical analysis, then you can more accurately work out your return on investment before embarking on your automation journey – and when you’re talking millions of dollars’ worth of automated technology ­– you want this to be as accurate as possible. So before committing to invest in automation, have you evaluated your current people, and processes to make sure they are automation ready?

Prological is keen on automation and we know that for Australian businesses, particularly manufacturing businesses, automation is critical to success. However, efficiency is not driven by automation, efficiency comes from good people, well trained, using excellent processes. Systems and automation then become the valuable enablers you were sold.

Efficiency and inefficiency are cultural, and no matter what systems and automation you put in, if the basics of getting the people and processes right don’t occur first, then your investment risks becoming very expensive sub-optimisation.

Of course, things will be better than they were, but without getting the basics right, first, your next generation automation solution will only be a shadow of what it could have been.

I recommend any business exploring automation to take a step back and invest the time in analysing your current people, processes and then systems first.

It’s crucial not to be duped by technology proponents who say that the operation will be optimised throughout definition and implementation. While it may be better from where you started, it won’t be optimal if the fundamentals of your supply chain have not been sorted out first.

When was the last time you assessed the efficiency of your supply chain? By simply reviewing the environment which you already work in and making tweaks and alterations, you could already have an answer for enhanced fulfilment capabilities without the huge investment of automation.

While many disruptive technologies are intriguing, and some of the advancements are significant, focusing on the fundamentals could increase picking rates by 400 per cent, as a client of ours recently identified.

​​Getting the fundamentals right, before putting the dollars in to automation could be the answer for and improving efficiencies far beyond your initial expectations. And then when you do automate, you will get the ‘supercharged’ outcomes you expected.

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