Is Automation Enough to Save Supply Chains?
February 7, 2023
At a glance
- Main takeaway: You may not realize it, but automation is everywhere. In fact, it could be the solution to help supply chains rebuild after the pandemic exposed the fragility of the industry.
- Impact on your business: For supply chains to succeed, they need to look at automation within the context of a larger strategy and modify their business model.
- Next steps: Aprio’s Manufacturing and Distribution Services and Digital Transformation and Cybersecurity teams can help you re-evaluate your supply chain strategy to identify automation solutions that improve your operational goals and build resiliency into your business.
Schedule a consultation with Aprio today.
The full story:
Automation is everywhere. We may not realize it in the moment, but its presence is growing. In the manufacturing industry, automation could be the key to offset resource costs, as manufacturers face the challenge of nearshoring their operations after the pandemic exposed the high risks of relying on a global supply chain.
While there are many different types of automation, for the purpose of this article we will focus on the two driving categories in supply chain: industrial robotic automation and robotic process automation. While neither type of automation is a new concept, especially for supply chains, their purposes are night and day.
- Industrial robotic automation represents the physical world, and how the robots are interacting with that world. It has been used in a variety of ways, including robotic arms on the assembly line in the manufacturing industry, GPS-guided combines, food processing and packaging in the agricultural industry, and automated bulldozers in high-risk environments in the construction industry.
- Robotic process automation represents the automation that takes place within the computer system to support the workflow that happens throughout the company. It streamlines processes by performing repetitive, low-level tasks (such as inventory counts), thus allowing your current employees to focus on higher-value activities. Additionally, robotic process automation can support your overall digital strategy, providing real-time insights and data.
For supply chains, automation needs to fit within the context of a larger strategy for it to succeed.
Leveraging industrial robotic automation within supply chains enables manufacturers to change their business model.
While supply chains are still recovering from the aftermath of the pandemic, the illusion that automation alone is enough to save them is false. And yet, automation is a critical component that can be used to transform supply chains and potentially remediate the negative impact of the pandemic.
To succeed in adopting industrial robotic automation, you must first re-strategize your business model. The areas of your business that would benefit most from industrial robotic automation are your physical plant, process for resourcing raw materials and the contents of your production pipeline.
Many of today’s manufacturers are contemplating moving some, or all, of their operations back to North America, and thus closer to the consumer, in order to resolve supply chain issues. One of the many reasons manufacturers moved their operations offshore in the first place was cheaper labor costs. While the manufacturing industry continues to deal with labor shortages coupled with higher wage demands, leveraging industrial robotic automation can help you control and minimize excessive labor costs when reshoring production.
As companies consider reshoring, the opportunities for manufacturers to adopt automation are more accessible today due to the decrease in technology costs compared to high labor costs. The shift of labor from humans to robots is more practical because the return on investment works in your favor.
Real-time data at your fingertips with robotic process automation
Robotic process automation not only increases workflow efficiencies, but it also enables you to capture the entire ecosystem of your data in real-time.
For example, on your next flight, would you like it if your pilot opened the window mid-flight to measure the wind speed? Definitely not! You would prefer the pilot to collect the data in real-time and deliver it to a gauge on the plane’s dashboard. Then the pilot can make accurate decisions based on information presented in that moment.
As robots move through a physical environment, they are gaining crucial data at a frequency from days to minutes to seconds. Fast data collection enables automation and provides important telemetry that feeds insights, ultimately giving your organization the operational resiliency for better decision-making and financial forecasting in real-time. As you enable automation, your data collection increases exponentially, allowing you to answer questions you didn’t even know you could.
The barrier to entry in robotic process automation
The thing with humans is, we make mistakes. It’s human nature, right? However, robots don’t wake up one morning and make a mistake.
Robotic process automation will lead to higher-quality output, especially with repetitive tasks such as picking parts or counting inventory. However, like any new technology it’s important to be mindful of the requirements before diving in. For robotic process automation, there are two significant barriers to entry:
- To be successful, the first thing you must do is invest time and energy into fully understanding your business processes.
Once you understand the entirety of your business processes, you can prioritize them because you now know where your focus should be aligned.
The bottom line
While automation will not single-handedly save supply chains, it’s a key component to decrease labor costs and capture critical data in real-time. Holistically, automation can give supply chains the flexibility to do things they couldn’t do before. And to be successful and remain competitive in today’s market, supply chains must re-strategize their business model to discover how they can properly leverage automation.
Aprio’s Manufacturing and Distribution Services and Digital Transformation and Cybersecurity teams can help you re-evaluate your supply chain strategy to identify automation solutions that improve your operational goals and build resiliency into your business.
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About the Author
Adam Beckerman is Aprio’s Manufacturing and Distribution Leader and Assurance Partner. Adam's team of 30 professionals focus on the manufacturing industry with 20+ years of experience enabling the success of manufacturing start-ups, growth companies and businesses preparing for equity events.
Jeff Kramer is Aprio's Executive Vice President of Digital Transformation Advisory and Cybersecurity | Specializing in providing managed IT solutions and advisory services to small, medium and large businesses in manufacturing, consumer products and insurance. In an evolving world, Jeff is there to provide ever-adapting solutions to meet any client needs.