What is Supply Chain Automation & How it Can Streamline Your Business

Ongoing global issues impacting supply chains — such as the COVID-19 pandemic — are pushing many logistics providers to re-evaluate and streamline their processes. Friction in shipping coordination only amplifies existing delays and risks that are outside a provider’s control. Thankfully, supply chain professionals can put an end to delays, streamline communications with partners, and mitigate the impact of crisis scenarios with end-to-end supply chain automation.

CData Arc is designed to simplify and automate logistics processes so that reliable and effective B2B communication does not need to be a burden on your technical resources. To help you quickly automate your supply chain, we’ve developed a curated library of pre-built logistics workflows that drop directly into your CData Arc instance.

Let’s explore 3 ways CData Arc’s Sample Flows enable logistics providers to easily get started automating and augmenting supply chain processes.

What is supply chain automation?

Supply chain automation refers to the use of technology and software to perform tasks and processes within the supply chain with minimal human intervention. This approach leverage software tools such as integration platforms, communication systems, and data translation solutions to streamline operations, reduce errors, and increase efficiency. By automating repetitive and time-consuming tasks, businesses can focus on strategic decision-making and improving overall supply chain performance.

One of the key benefits of supply chain automation is the ability to enhance accuracy and reduce human error. Automated systems can handle complex calculations, data entry, and inventory management with precision, ensuring that information is always up-to-date and accurate. This leads to better forecasting, inventory control, and demand planning, ultimately reducing the risk of stockouts or overstocking.

Moreover, supply chain automation improves operational efficiency by speeding up processes and reducing manual labor. Tasks such as order processing, shipment tracking, and invoice generation can be completed in a fraction of the time it would take a human worker. This not only accelerates the supply chain but also frees up employees to focus on higher-value activities that require human expertise and creativity.

In addition to operational benefits, supply chain automation provides greater visibility and transparency across the entire supply chain. Real-time data collection and analytics enable businesses to monitor and manage their supply chain more effectively. This visibility helps identify potential bottlenecks, track shipments, and respond to issues promptly, ensuring that the supply chain runs smoothly and efficiently.

In conclusion, supply chain automation is a powerful tool that can transform how businesses manage their supply chains. By reducing errors, increasing efficiency, and providing real-time insights, automation helps companies meet the demands of today's fast-paced market while maintaining a competitive edge. Embracing supply chain automation is no longer a luxury but a necessity for businesses looking to thrive in the modern world.

3 Supply chain automation benefits

Increased efficiency

One of the most significant benefits of supply chain automation is the substantial increase in operational efficiency. Automated systems streamline various processes such as order processing, inventory management, and logistics coordination. By reducing the need for manual intervention, businesses can process orders faster, minimize delays, and optimize resource allocation. Automation tools can handle repetitive tasks with precision, allowing employees to focus on strategic initiatives and problem-solving. This boost in efficiency leads to quicker turnaround times, better customer satisfaction, and a more agile supply chain capable of responding swiftly to market changes.

Reduced risk

Supply chain automation also plays a crucial role in mitigating risks associated with manual processes. Human errors in data entry, inventory tracking, and order fulfillment can lead to costly mistakes, stock discrepancies, and shipment delays. Automated systems enhance data accuracy and consistency, ensuring that critical information is always up-to-date and reliable. Additionally, automation enables real-time monitoring and alerts for potential issues such as inventory shortages or delivery delays. By proactively addressing these risks, businesses can maintain smoother operations, avoid disruptions, and enhance overall supply chain resilience.

Improved trading partner relationships

Effective supply chain management relies heavily on strong relationships with trading partners, including suppliers, manufacturers, and distributors. Automation facilitates better communication and collaboration among these partners by providing real-time data and insights. Automated systems enable seamless information sharing, accurate demand forecasting, and timely updates on order status and shipment progress. This transparency builds trust and reliability, fostering stronger partnerships. Improved trading partner relationships result in more efficient supply chains, as partners can work together more effectively to meet demand, address issues promptly, and achieve mutual business goals.

3 Limitations of automating the supply chain process

High initial investment

One of the primary limitations of automating the supply chain process is the high initial investment required. Implementing automation technologies, such as robotics, AI-driven systems, and IoT devices, can be costly. This includes not only the cost of the equipment and software but also expenses related to integration, training, and maintenance. For small and medium-sized enterprises (SMEs), these upfront costs can be prohibitive, making it challenging to justify the investment despite the long-term benefits. Organizations must carefully evaluate their financial capacity and expected return on investment before embarking on extensive automation projects.

Complex integration

Integrating automation into existing supply chain processes can be complex and time-consuming. Many businesses operate with legacy systems and infrastructure that may not be easily compatible with modern automation technologies. This can lead to significant challenges in ensuring seamless data flow and interoperability between different systems. The integration process often requires specialized expertise, extensive testing, and continuous adjustments to align the new automated processes with the existing operational framework. These complexities can delay the implementation timeline and temporarily disrupt supply chain activities.

Dependency on technology

While automation offers numerous advantages, it also creates a dependency on technology that can be a limitation in certain scenarios. Automated systems are susceptible to technical issues, software glitches, and cyber-attacks, which can lead to operational disruptions. Additionally, the rapid pace of technological advancements means that businesses must continuously update and upgrade their systems to stay current, which can be both costly and resource-intensive. Over-reliance on technology can also reduce human oversight and decision-making capabilities, potentially leading to situations where automated processes fail to adapt to unexpected changes or anomalies in the supply chain.

By understanding these limitations, businesses can develop strategies to mitigate the challenges associated with supply chain automation, ensuring a balanced approach that maximizes the benefits while minimizing potential drawbacks.

3 Strategies to automate your supply chain

Implementing effective automation strategies can lead to significant improvements in efficiency, accuracy, and customer satisfaction. This section explores three pivotal strategies to automate your supply chain: coordinating warehouse inventory, streamlining deliveries, and delivering live shipment updates. By coordinating warehouse inventory, businesses can ensure optimal stock levels and reduce the risk of overstocking or stockouts. Streamlining deliveries enhances the logistics process, reducing delays and ensuring timely fulfillment. Finally, delivering live shipment updates provides real-time visibility, enabling businesses and customers to track shipments accurately and adjust plans proactively. Together, these strategies not only enhance operational efficiency but also contribute to a more resilient and responsive supply chain.

Coordinate warehouse inventory

Product inventory presents logistics providers with a litany of check-ins and confirmations to ensure they can fulfill current and forecasted orders.

Retail warehouses, for instance, often coordinate to prioritize and balance thousands of available goods as they restock local stores and fulfill direct online orders. If these processes remain manual, communications easily fall out of sync with current inventory levels and create an imprecise, unsustainable guessing game.  Alternatively, warehouse automation provides a reliable and efficient approach to managing the challenges surrounding warehouse inventory, logistics, and supply chain processes.

CData Arc offers retailers a pre-built Sample Flow to map Electronic Data Interchange (EDI) inquiries directly to back-end environments like Warehouse Management Systems (WMS) and databases. Arc makes it easy to deliver every EDI 846 inquiry without manual intervention — enabling warehouses to make instant, accurate decisions from live inventory information.

Streamline deliveries

Another challenge in recent years has been the technical talent shortage. Carriers like FedEx and UPS simplify their operations by communicating with partners exclusively under certain standard protocols. As requests to mobilize warehouse inventory come in, logistics providers may lack the EDI expertise necessary to arrange communication with large package carriers.

Consider how a national grocer might pilot a food distributor’s latest soft drink across dozens of select locations. In this scenario, the food distributor needs the EDI process in place to interface their warehouses with large package carriers — or go the costly route of providing physical shipments themselves via trucks and boats.

Distributors can leverage simplified supply chain processes like a Sample Flow to quickly mobilize Arc's built-in support for Load Tenders and Load Tender Invoices. These automated workflows make it simple to securely communicate over EDI 804 and 810 standards to leverage existing robust delivery networks.

Deliver live shipment updates

Among many lasting effects of the 2021 Suez Canal blockage, this incident has exposed major limitations with shipment tracking. Unforeseen complications and manual data entry can clog support channels with shipping update requests as original delivery forecasts quickly become outdated.

For example, anything less than real-time information may put distributors in a bind if an electronics manufacturer experiences semiconductor shortages. Instead of manually referencing back-end systems to deliver shipment updates, CData Arc offers a Sample Flow to automatically push these out.

Logistics providers can now generate outbound EDI documents like 214s from real-time database data and push these updates to customers. In the above scenario, any unexpected delivery timeframe changes entered into the manufacturer’s systems can immediately push updates to distributors in a standardized format. Decisions can then be made more proactively to notify retailers of inventory shortages long before they become an issue.

3 Supply chain automation examples and use cases

Automated Warehouse Management Systems (WMS)

Automated Warehouse Management Systems (WMS) are a prime example of supply chain automation that enhances inventory control and warehouse operations. These systems use advanced software to manage and optimize warehouse activities, such as inventory tracking, order picking, and shipping. By employing technologies like RFID, barcoding, and automated guided vehicles (AGVs), WMS can significantly reduce manual errors, increase order accuracy, and improve warehouse efficiency. For instance, companies like Amazon and Walmart use automated WMS to handle high volumes of orders efficiently, ensuring timely delivery and accurate inventory management.

Predictive analytics for demand forecasting

Predictive analytics is a powerful tool in supply chain automation, enabling businesses to forecast demand more accurately and plan their inventory accordingly. By analyzing historical data, market trends, and other relevant factors, predictive analytics software can generate insights into future demand patterns. This allows companies to optimize their inventory levels, reduce stockouts and overstock situations, and enhance overall supply chain efficiency. For example, retail giants like Target and Zara use predictive analytics to anticipate customer demand, ensuring they have the right products available at the right time, thereby improving customer satisfaction and reducing waste.

Robotic Process Automation (RPA) in order processing

Robotic Process Automation (RPA) is increasingly being used to automate repetitive tasks in order processing, such as data entry, invoice generation, and order validation. RPA bots can handle these tasks with high accuracy and speed, freeing up human employees to focus on more strategic activities. This not only increases operational efficiency but also reduces the risk of human errors. For example, companies like DHL and FedEx have implemented RPA in their order processing workflows, resulting in faster order fulfillment, reduced processing times, and improved overall productivity. This automation has enabled them to handle larger volumes of orders without compromising on accuracy or efficiency.

Supply chain efficiency starts with CData Arc

Logistics providers are increasingly navigating the unprecedented challenges of today’s economic climate with automated, self-service solutions. CData Arc aims to put you and your trading partners at the forefront of this competitive landscape with modern approaches to B2B integration.

CData Arc’s Logistics Sample Flows provide a curated library of hand-selected, pre-built integration flows that are ready to download and run today. Our cloud and on-prem CData Arc solutions enable any logistics provider to build streamlined B2B workflows using a simple drag-and-drop interface.

To learn how CData Arc is empowering logistics to modernize the supply chain, watch this free on-demand webinar.