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Supply Chain Automation: Key Benefits

June 22, 2022


Global supply chains have been severely disrupted by challenges related to the COVID-19 pandemic—including delays and port congestion—and as the global healthcare crisis started to wane, new issues (like Russia’s invasion of Ukraine) increased the pressure on retailers around the globe. According to McKinsey, this new geopolitical crisis has further complicated supply chain issues in critical sectors such as agriculture, automotive, energy, and food. Both retailers and supply chain operators should consider their options, like supply chain automation, to restore balance.

More industries are increasingly leveraging the numerous advantages offered by automation and similar technologies. Indeed, one of the most effective ways of simplifying previously laborious activities is by integrating industrial, service, and network automation. Multiple companies in the U.S. and abroad are able to optimize manufacturing and lower operating costs—while also increasing production output and becoming more competitive in their markets. Retailers and supply chain operators can also benefit from integrating supply chain automation with their processes to increase productivity, reliability, and the availability of their products. 

Here are the key benefits of integrating effective supply chain automation in retail.

Real-Time Access to Delivery Information

Automated distribution and logistics management allows optimal management of shipments and provides real-time access to data and statistics about deliveries. By optimizing routes and using transportation management systems (TMSs), the margin of error for delivery times can be reduced in a way that can make the estimated time of delivery (ETD) easy to meet. According to Oracle, TMSs are already used by manufacturers, distributors, e-commerce companies, and retailers around the world.

Reduced Processing Time

Supply chain and delivery automation decreases order processing time because some operations performed daily before automation become redundant and can now be eliminated. For example, pickers no longer have to travel to get the lists of products they need to collect from shelves; they can now receive the correct instructions directly on their mobile devices. These instructions often include the exact location of the products in question, meaning that workers no longer have to waste time searching for them in the warehouses. Moreover, retailers and supply chain operators currently also have access to warehouse management systems (WMSs) that can correct picking errors almost immediately. 

Reduced Product Returns

Warehouse automation means using software and technology, such as robotics and sensors, to automate specific tasks—including identifying, picking, and loading products. The effective optimization of these tasks leads to better time management as well as a significant reduction in picking errors. This means that the number of returns caused by picking errors is decreased. Moreover, by reducing product returns, retailers can lower their shipping costs as additional trips for returned products can be eliminated. 

Improved Customer Relationships

Supply chain and delivery automation can also contribute to the creation of an enhanced customer relationship management system that collects, compares, and analyzes data on all incoming orders, from order to delivery. It can also monitor customer satisfaction throughou the process. This allows timely detection and effective resolution of most problems plaguing orders, and offers retailers the opportunity to reinforce existing marketing and sale strategies. 

Preparing for the Future

According to McKinsey, most of the core merchandising tasks performed by leading retailers could become almost completely automated within the next few years. Numerous retailers in the U.S. and abroad have already started this process—and they will reap the benefits of being early adopters. Other retailers will need to follow suit or risk becoming non-competitive. It’s worth noting that the push to automate the retail industry was in full force even before the COVID-19 pandemic, but the crises boosted the trend.

Important issues relating to the pandemic have disrupted supply chains around the world. However, for many retailers and supply chain operators, these problems provided new opportunities to optimize their businesses. Supply chain and delivery automation solutions are technological breakthroughs that can help them not only navigate existing issues, but also build solid foundations for future growth.