Supply chain automation – where do I start?

Be it Sydney, Shanghai, or San Francisco…. wherever you are on the planet, not a day passes without some media buzz around automation, from AI to robotics.  Increasingly, businesses of all sizes are looking at how they can take advantage of automation within their own operations, in an effort to drive revenue and reduce cost.

In the wholesale distribution and manufacturing spaces especially, the last 24 months has seen a deepening focus on supply chain automation. It’s spawned articles, analyst reports and a growing array of solutions to drive efficiency. More recently, the spotlight has been on technologies like robotics in the warehouse, last mile smart delivery, and in some cases even delivery by drones.

So with all that noise how does a business evaluate, choose and execute on the plethora of potential automation projects? It’s not surprising that many organisations struggle with where to start.

Speaking from 30+ years in the business process and ERP space, I believe you need to start at the beginning. Don’t overlook the quick wins to be had at that first step in the order to cash process – order entry.

If we deconstruct the order to cash cycle, it’s plain to see that nothing happens until customers’ demand is logged in your system. You can’t approve and confirm the order, you can’t send the order to your warehouse, and of course, you can’t pick, pack and ship the goods – until that order is in your ERP.

So whilst there are lots of opportunities to drive efficiency throughout your processes, in particular warehouse and logistics functions, nothing moves without that first step - order entry. With that in mind, let’s look at some of the potential benefits of sales order entry automation. I’m going to cover this at a high level and over the coming weeks dive into greater detail in future blogs.

1. Automation is 24/7. As Gordon Gekko famously said in Wall Street, “money never sleeps.” And these days, neither do your customers. Distributors typically service customers spanning various national and international time zones. And many local industries (think hospitality or foodservice) never sleep…. They’re consuming your goods 24/7. Can you afford to have your order entry offline for over half a day, every day?
2. Automation liberates your CSRs. Customer Service Reps are valuable sources of customer knowledge. Can you afford to have your reps doing low value, manual processes that could be automated - allowing them to engage in high value interactions to enhance customer satisfaction?
3. Automation boosts supply chain speed. Sure, the last mile of the supply chain is important ….but what about the first 100 yards? Nothing moves until the demand is logged in your ERP. The quicker it’s in the system, the quicker your order to cash process is off and running.
4. Automation cuts your cost to serve. Cost to serve reduction without reducing customer satisfaction is critical. Globalization and labour arbitrage means all distributors are being squeezed. Your customers and suppliers are looking for demanding efficiency and cost savings - and they’ll vote with their feet.
5. Automation supports customer behaviour. Customers don’t like change. They expect you to accommodate their needs and won’t change their processes to accommodate yours (and why should they?). Just because you created the best ordering portal in the world doesn’t mean the customer will enter their order in your eCommerce system. For the most part, B2B customers generate demand in their own system and then send a purchase order for you to process.

So in a nutshell, there are a number of potential benefits to consider as you examine how sales order automation (as part of supply chain automation) can deliver for your business. Over the coming weeks I’m going to dive a little deeper into the above points - starting with the 24-hour business.