How intelligent automation will impact and revitalise global supply chains
The idea of automation in manufacturing and the supply chain is nothing new - since the earliest days of the industrial revolution we have sought to automate tasks with machines, and lower the cost of manufacturing processes.
In countless cases, the application of machines, and more recently software, has meant improvements in the consistency of products, facilitated near 24/7/365 production and has meant staff can be focused on higher value tasks in their company.
Yet the use of technology in the industry may not be fully understood; a recent Capgemini survey showed that nearly half (48%) of UK office workers are optimistic about the impact automation technologies can have. However, while respondents to the survey had a general idea of the benefits that might accrue, they were less clear as to how these technologies could be applied to their specific area of work. And worryingly, only 20% said they felt their organisations were currently benefiting from automation – clearly the industry is missing a trick.
However, as utilisation stagnates for certain companies, the market is maturing. Automation is now reaching far beyond simple process software and mechanisation. Technologies such as the Internet of Things (IoT), cognitive computing, advanced robotics, Digital Fabrication and blockchain are becoming increasingly popular, bringing together the power of automation and analytics.
Yet other areas such as artificial intelligence (AI) and machine learning, which are proven enablers for new ways of optimizing the supply chain and manufacturing processes, are less understood. It’s agile, forward-thinking businesses that are able to utilise these technologies in a thoughtful way that will reap the benefits.
Making automation a reality
The biggest obstacles to automation envisaged by those with supply chain responsibilities are largely matters of perception. Decision makers are concerned about the implementation costs, they are unsure of the security implications, they doubt they have the requisite in-house skills and experience, and they are unclear regarding the specific benefits of these new technologies.
Overall, they are hesitant to make a big move, particularly looking at what they perceive to be large implementation costs. However, in order to make the most of these technologies, these decision-makers need to consider the benefits of what a step towards digital transformation could mean for their business, including:
- Agility – redesigning the operating model to make it modular, flexible and boundless to adapt to the evolving market landscape, to sense and shape the demand, improved forecast accuracy and make informed decision making
- Responsiveness – with installed sensors, real-time point of sale data and information across the value chain enables tracking and traceability of product, asset, and services to respond to customer needs and requirements
- Transparency – Customers and partners interact in connected ecosystem, this improves efficiency, effectiveness and provide better insight to operations and process control, empowering employees to focus on higher value tasks
- Scalability – its scales up capacity to reinforce speed to market from product inception to commercialisation, lowers cost to serve
Next-gen Innovation – it enables organisations to reimagine new growth paths, making today’s business relevant for tomorrow, navigate change and orchestrate new and innovative ways of working
When speaking with current and prospective users of technology in the supply chain industry, it’s positive to see that people do realise the benefits of automation and, despite misgivings and gaps in their knowledge, they are beginning to warm to its possibilities. However, with all the noise around robotic process automation (RPA), AI, cognitive analytics and the digital customer experience, companies often deploy technologies randomly. These implementations are generating (isolated) benefits, without delivering enterprise-wide added value.
How to make an impact
Starting small is low risk and makes complete sense – you don’t want to take unnecessary risks in your supply chain. But small does not have to mean isolated – implementations should be part of a larger, cohesive business plan. Ultimately, the supply chain of any organisation is too valuable and sensitive to put at risk, but a balance has to be struck, if companies are to innovate.
There is a clear advantage to be had by those supply chain companies that pause long enough to consider the implementation of these technologies as part of their wider business goals, rather than to solve a point problem.
That may sound risky, but with supply chain adoption of next generation automation technologies currently low, there are real advantages for those who use this kind of intelligent technology. Not only will they experience the benefits outlined above but they’ll see gains in cost-competitiveness and market share - they’ll be ahead of the game.
Pandora and IBM digitise jewellery supply chain
Pandora has overhauled its global supply chain in partnership with IBM amid an ecommerce sales boom for its hand-finished jewellery.
The company found international success offering customisable charm bracelets and other personalised jewellery though its chain of bricks and mortar retail destinations. But in 2020, as the COVID-19 outbreak forced physical stores to close, Pandora strengthened its omnichannel operations and doubled online sales.
A focus on customer experience included deploying IBM’s Sterling Order Management, increasing supply chain resiliency and safeguarding against disruption across the global value chain.
Pandora leverages IBM Sterling Order Management as the backbone it its omnichannel fulfilment, with Salesforce Commerce Cloud powering its ecommerce. Greater automation across its channels has boosted the jeweller’s sustainability credentials, IBM said, streamlining processes for more efficient delivery. It has also given in-store staff and virtual customer service representatives superior end-to-end visibility to better meet consumer needs.
Jim Cruickshank, VP of Digital Development & Retail Technology, Pandora, said the digital transformation journey has brought “digital and store technology closer together and closer to the customer”, highlighting how important the customer journey remains, even during unprecedented disruption.
"Our mission is about creating a personal experience and we've instituted massive platform changes with IBM Sterling and Salesforce to enable new digital-first capabilities that are much more individualised, localised and connected across channels and markets,” he added.
Pandora’s pivot to digital
The pandemic forced the doors closed at most of Pandora’s 2,700 retail locations. To remain competitive, it pivoted to online retail. Virtual queuing for stores and virtual product trials via augmented reality (AR) technology went someway to emulating the in-store experience and retail theatre that is the brand’s hallmark. Meanwhile digital investments in supply chain efficiency was central to delivering on consumer demand.
“Consumer behaviour has significantly shifted and will continue to evolve with businesses needing to quickly adapt to new preferences and needs,” said Kareem Yusuf, General Manager, AI Applications and Blockchain, IBM. “To address this shift, leading retailers like Pandora rely on innovation to increase their business agility by enabling and scaling sustainable supply chain operations using AI and cloud.”
Yusuf said Pandora’s success was indicative of how to remain competitive by “finding new ways to create differentiated customer experiences that protect their enterprises from disruptions to help mitigate risk and accelerate growth”.