3 Ways Supply Chain Leaders Can Harness Automation in 2024

ByPaul Christiano Last Update on

Supply chains face an unprecedented amount of pressure and disruption. Labor shortages, demand fluctuations, material constraints, geopolitical conflicts, and more have revealed major vulnerabilities in global supply networks. To overcome these challenges, leading organizations are turning to supply chain automation as a strategic imperative.

Recent projections show the market for supply chain automation growing at nearly 15% CAGR to reach $155 billion by 2027 (MarketsandMarkets). And Gartner analysts predict that half of large enterprises will implement intelligent composable automation across their supply chains by 2026.

So how exactly does supply chain automation provide value, and what technologies should companies focus on? Let‘s explore the top opportunities.

Automation Optimizes Warehouse Operations

Warehouses sit at the heart of the modern supply chain. But warehouse productivity has been severely impacted by labor shortages. In a recent Logistics Management survey, over 70% of respondents said warehouse worker recruitment and retention was their top challenge.

Warehouse automation provides a solution by reducing reliance on manual labor. McKinsey estimates that automating repetitive warehouse tasks can improve productivity by 15-30%.

Specific technologies driving warehouse automation include:

  • Autonomous mobile robots (AMRs) – The global AMR market is projected to reach $8 billion by 2025 based on a 42% CAGR (Interact Analysis). AMRs automate inventory counts, material transport, picking and sorting.
  • Automated storage and retrieval systems – These systems use automated shuttles and cranes to optimize storage density and order fulfillment speed. IDC predicts 10%+ annual growth in adoption through 2025.
  • Automated picking – Pick-to-light, put-to-light, and similar technologies guide warehouse workers through more efficient picking workflows.
  • Warehouse management systems (WMS) – Modern cloud-based WMS platforms integrate with automation systems for greater coordination and visibility. Oracle found 93% of companies with highly automated warehouses also invested in WMS.

In addition to boosting throughput, warehouse automation improves accuracy, lowers operating costs by up to 40% (MWPVL International), and enhances worker safety by reducing heavy lifting and repetitive motions.

Robotics Drive 30% Throughput Gain for Logistics Company

GEODIS, a leading global logistics company, implemented a mix of collaborative robots, automated guided vehicles (AGVs), and automated storage and retrieval systems across its warehouse network. The results:

  • 30% increase in throughput
  • 50% reduction in truck loading/unloading times
  • 90% accuracy in order preparation

By automating repetitive tasks, GEODIS gave employees capacity to focus on more value-added activities while gaining much needed flexibility and scalability.

Streamline Back-Office Workflows Through Intelligent Automation

Supply chain operations generate massive amounts of paperwork and documentation that drain back-office productivity. Intelligent automation solutions help companies digitize, simplify, and automate repetitive back-office processes.

  • AI data capture – Optical character recognition and machine learning instantly extract and digitize relevant data from paper documents like invoices and purchase orders. This eliminates slow and error-prone manual data entry.
  • Robotic process automation (RPA) – Software bots mimic employee actions to automate clerical tasks across supply chain systems like ERPs and TMS. Mordor Intelligence predicts over 20% CAGR for the RPA market through 2027.
  • Natural language processing (NLP) – NLP allows back-office systems to analyze unstructured data like customer emails and supplier messages to automatically update records, trigger workflows, and route items appropriately.

According to Blue Prism, 78% of supply chain professionals intend to invest in intelligent automation over the next two years to optimize back-office efficiency. This enables employees to focus on more strategic initiatives.

Global Brewer Automates 80% of Procurement Processes

AB InBev, the world’s largest brewer, implemented an AI-powered intelligent automation solution from WorkFusion across their source-to-pay processes. By combining RPA bots, OCR, and NLP, they automated over 80% of all indirect procurement workflows. The results were transformative:

  • 60-80% faster invoice processing
  • 52% reduction in query resolution time
  • 97% accuracy in information extraction
  • 20% boost in procurement team productivity

Intelligent automation gave AB InBev the agility and insights needed to optimize their complex global supply chain.

Autonomous Transport Delivers Reliability and Cost Savings

From raw materials to finished goods, supply chains depend on trucks, forklifts, cranes, and other manual material handling equipment. But labor shortages are impacting the availability of skilled human operators while costs are rising.

Autonomous transport solutions are gaining maturity:

  • Self-driving trucks – TuSimple and Embark have successfully completed fully autonomous, driverless truck runs between warehouses. This eliminates reliance on long-haul drivers.
  • Autonomous mobile robots – AMRs optimize material flows in manufacturing plants, distribution centers, and storage yards for 24/7 productivity.
  • Last mile delivery – Companies like Nuro and Starship Technologies have autonomously completed millions of last mile deliveries using purpose-built robot vehicles.
  • Aerial drones – Lightweight drones offer faster point-to-point delivery over short distances for time-sensitive items like medical supplies.

Goldman Sachs predicts the market for autonomous industrial trucks and robots to reach $9 billion by 2030. Autonomous transport drives significant cost savings while improving safety and sustainability.

Implementation Tips and Challenges

Implementing supply chain automation requires careful planning and change management. Here are some key recommendations:

  • Conduct opportunity assessment – Profile all supply chain processes and identify the most suitable for automation based on repeatability, labor intensity, and value impact.
  • Start small, scale fast – Pilot automation in confined use cases before expanding to maximize learnings. But plan for aggressive scaling.
  • Assemble integration expertise – Seamlessly integrating automation systems with existing legacy IT infrastructure and workflows is critical and requires experienced talent.
  • Mitigate workforce impacts – Automation changes job roles and displaces select positions. Companies need robust re-training programs and employee communication plans.
  • Build internal buy-in – Getting supply chain workers and leaders excited about automation-driven transformation is vital for adoption.

With the right strategy, companies can harness automation to overcome today‘s unprecedented supply chain challenges and build resilient operations for the future. The opportunity is now.

I am Paul Christiano, a fervent explorer at the intersection of artificial intelligence, machine learning, and their broader implications for society. Renowned as a leading figure in AI safety research, my passion lies in ensuring that the exponential powers of AI are harnessed for the greater good. Throughout my career, I've grappled with the challenges of aligning machine learning systems with human ethics and values. My work is driven by a belief that as AI becomes an even more integral part of our world, it's imperative to build systems that are transparent, trustworthy, and beneficial. I'm honored to be a part of the global effort to guide AI towards a future that prioritizes safety and the betterment of humanity.

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