By Divay Kumar, Co-founder & CEO, O4S
In the past few years, there has been a breakthrough in the supply chain technology landscape. Industries that were earlier hesitant to invest in technology and considered them as additional costs are now focusing on implementing advanced technologies. The primary focus for them is to automate recurring processes to save costs, plan optimum production, and take business decisions using real-time business insights.
A rapid increase in demand for autonomous solutions is leading to a sharp elevation in demand for supply chain-related technologies. A recent study by Gartner supports the statement and predicts 50% of global product-centric enterprises to invest in platforms providing real-time visibility on product movement (by 2023). Moreover, the study suggests that emerging and developed supply chain technologies are being considered as a competitive advantage by many industry players.
Manufacturers struggle to optimize their supply chain and gain complete control over the pricing game. However, it becomes highly impossible to maintain profitability with the growing competition and increasing pressure to match up the fluctuating production levels. Moreover, the prominent issues of maintaining optimal inventories and production levels are getting worse than ever with manufacturing scaling up and increasing dependency on manual efforts. There have been many debates around the importance of automation in Supply Chain and how replacing recurring procedures with Next-Gen technology will help in cost-cutting and better planning. Research also suggests that brands especially from the pharmaceutical and food industry incur big losses due to manual processes, and poor tracking practices.
Supply chains are highly dependent on process-oriented tasks due to which it becomes even more important to optimize them. Automation involves recognizing recurring tasks, time-consuming or error-prone processes that can be later automated. Since numerous stakeholders, third-parties are involved, and interdependent on each other, ensuring data flow becomes a critical issue. Digitized supply chains seem to be the best fit in this scenario and will help brands bring the required efficiency, accuracy, and transparency in their supply chains which will ultimately yield better profitability. According to a McKinsey report, automation could help improve global economy productivity by 0.8-1.4% of global GDP annually. Moreover, studies also suggest that transparent supply chain processes lead to 11-20% cost reduction. In short, supply chain automation is both cost-effective and implies higher profitability.
Artificial Intelligence (AI) and SaaS-driven platforms can help consumer brands to digitize and automate the supply chain. These platforms provide a multi-module platform for manufacturing companies to enable traceability and automation across manufacturing, warehouses, and retail networks to increase sales and performance. Their solutions optimize downstream supply chain operations while also helping brands protect their market reputation via their anti-counterfeiting solution. In addition, they possess the capability to bring warehouses, distributors, retailers, and consumers on a single mobile app-based platform to help organizations in optimizing planning and production. Their platforms use technologies such as Artificial Intelligence (AI), Machine Learning (ML), and Internet of Things (IoT) with the core supply chain operations to build global supply chains networks for the brands.
Supply chains across the globe are transforming by implementing Industry 4.0 trends to build agile networks, using disruptive technologies, ensuring end-to-end visibility, and inventory control. Most industries’ supply chain is majorly dependent on manpower and human intervention. As the COVID-19 pandemic hit and disrupted the world’s supply chain system, the importance to automate and strengthen a company’s value chain has become critical. Moreover, fluctuating demand patterns across the globe have only given rise to huge gaps in supply-demand fulfillment. Maintaining optimal inventories to avoid stock obsolesces has taken precedence in this time of uncertainty. As a result, consumer-based brands are forced to reinvent their supply chain processes and automate them in order to ensure continuous profitability.