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Future proof your supply chain: Embracing Automation and AI

Supply chain leaders are turning to automation and AI to enhance operational efficiency, reduce costs, and elevate the customer experience

Automation in both process and physical forms has been around dating back as far as the Industrial Revolution. However, it wasn’t until the 1980s that automation began to emerge in supply chains. Back then, warehouse automation—such as automated storage and retrieval systems (ASRS), sortation systems, and conveyors—involved expensive physical infrastructure and millions of dollars in capital. What’s more, as business models evolved or companies created new models, these approaches struggled to be responsive.

Fast forward to today. With advances in technology that include AI/machine learning and RPA in the form of software robotics, modern automation such as AMRs and other automated systems are much more conducive for pilots with small investments—providing the ability to prove value before a larger commitment is made.

This benefit is just one of several reasons supply chain leaders need to embrace the enormous potential for advances in automation and AI technologies, which will continue to gain momentum for years to come. Additional benefits include:

A solution to labor shortages: Finding enough workers with the right skill sets has opened the door for the adoption of warehouse automation, including the use of automated sorting systems, picking and packing automation, robotic automation, and autonomous vehicles. In addition to reducing dependence on human labor, these solutions can increase efficiency by operating 24/7 without fatigue. This translates into reduced costs and higher productivity levels, helping warehouses meet customer demands even during peak periods. Additionally, automation systems can minimize the risk of injuries to human workers by performing hazardous tasks.

Enhanced customer experience: Brands and retailers are investing heavily in automation and AI to meet consumer demands for fast and reliable delivery. For example, AI helps companies optimize routes and provide accurate delivery estimates. Additionally, AI-driven chatbots can track orders, handle routine inquiries, and offer product recommendations—enabling companies to minimize response times and allow human customer service representatives to focus on complex issues. 

Improved accuracy/reduced errors: Precision is one of the most significant advantages of warehouse automation. The implementation of automated systems can drastically reduce human errors, which can lead to more accurate order fulfillment and inventory management. This can go a long way in maintaining customer satisfaction while reducing waste.

Enhanced demand forecasting: AI technology excels at forecasting demand by extracting insights from extensive repositories of data, including numerous sources such as past sales records, customer transactions, social media mentions and prevailing economic indicators—helping supply chain and logistics organizations maintain the delicate balance between consumer demand and supply. Additionally, AI projection tools can help facilitate better collaboration between supply chain partners by allowing demand forecast data to be shared with suppliers. This helps businesses optimize inventory levels and minimize stockouts while creating a harmonized supply chain system.

Real-time visibility: It’s vital for today’s businesses to have complete, real-time supply chain visibility. AI-powered systems provide this level of visibility by integrating data from various sources such as suppliers, manufacturers, logistics providers and retailers. This helps businesses track inventory levels, monitor shipments, identify bottlenecks and respond quickly to disruptions or changes in demand—which enhances overall supply chain agility.

Take the First Step—Consult with a Supply Chain and Logistics Expert

Before investing in automation and AI, it’s important for supply chain leaders to understand the complex nature of these technologies as well as the current and future state of the market. This can be effectively accomplished by leveraging the expertise of a supply chain logistics and implementation partner—one that can help you deliver a customer experience that will build brand loyalty and accelerate growth.

About the Author:

Recognized for industry thought leadership and customer value creation, Jagan Reddy brings 25 years of experience in building and delivering supply chain and logistics solutions to his position as Managing Partner of Netlogistik US.