Automating the supply chain is crucial to the future of the industry, but humans will never be replaced, says Sandeep Kumar, vice president and head of the Business Consulting Group at ITC Infotech.
Modern concerns around the impact of technology were highlighted recently by Deloitte’s prediction that over a third of UK jobs are at high risk of being replaced by automation in the next 20 years. From transport to sales, automation is now impacting all areas of work, but industry and production will continue to be the forefront.
With growth manufacturing prospects continuing to look very fragile, automation is vital to creating the flexible, streamlined, and efficient operation necessary to survive the increasingly competitive and unforgiving manufacturing environment. Intelligently applying automated digital processes is a strategic priority – a trend coined as “Industry 4.0” by the German government.
The supply chain is crucial for automation, empowering a wave of transformational strategy across the entire operation. For example, setting up a centralised supply chain analytics centre will enable a range of valuable processes such as demand forecasting, replenishment planning, inventory analytics and sales, as well as operations planning support though a shared services model. The benefits of standardised processes and analytics can also easily be extended across multiple business divisions without having to increase human resources.
However, while supply chain automation is a key agenda today, the technology revolution has actually been a long time coming, starting in the 1980s with the advent of powerful computing models in MRP and MRP II in the 1980s. The next generation supply chain software that evolved from this helped bring in advanced planning and optimisation capabilities, as well as strong functional automation of warehouses and factories.
As newer technology became more affordable, the cost benefits of tool-driven automation became extremely attractive and the application of smart tools became established as a critical completive advantage. Several decades of turbulent geo-political events and technology breakthroughs have fuelled this trend, such as the oil crisis of the 1970’s triggering innovation in cost reduction and efficiency. As China and the Far East opened up in the 1980s it became not only possible but highly cost-effective to make and sell products across different continents.
Finally, the end of the Cold-War in the 1990s lead to an increase in globalisation and rampant consumerism – driving product proliferation, miniaturisation and reduction of life cycles, digitisation of information exchange, and increasingly stringent statutory requirements for safety and ethical practices.
Today, the impact of supply chain automation is clear across different industries. Among those most affected by transformation are hi-tech and consumer electronics OEMs. These are usually the sectors where cost efficiency is the most important, and technology adaptation is helping to lower the cost of product operations. This demand has made them the pioneers in adopting new advanced capabilities that disrupt well-established supply chain models.
The automotive, aerospace and industrial manufacturing industries have also undergone similar transformation, and some powerful examples have emerged in the consumer packaged goods, fashion apparel and retail industries. These sectors in particular are good examples of how global supply chain models bring together raw materials and ingredients from across the world, before products are manufactured and distributed to global markets.
With the ability to enable many transformational benefits across the organisation, supply chain automation is no longer optional. However, manufacturers must balance this need against the impact on their workforce that is increasingly concerned about its relevance.
They can rest assured however that although this transformation does impact manual work by changing the way certain tasks are performed, the idea that it leads to the removal of people from supply chains operations would be quite an overstatement.
Rather, despite the developments in technology, humans have always and will continue to be the drivers of these processes. Instead of replacing them, supply chain technology is moving human roles from more repetitive data entry and crunching tasks to more intelligent supply chain decision making, enabled by smart data and technology support. Rather than seeing automation as a threat, the workforce should see it as an opportunity to improve their industry and their own prospects for more advanced roles.
Supply chain risk management, sustainability, global integrated planning capabilities, and the use of instrumented intelligence are essential to successful operations today, and technology-savvy people will always be the lynch-pin that enables manufacturers to keep ahead of the fast pace of change and establish themselves as pioneers.