Supply chain planning has never been more important. The last few years have proven that despite decades of investment in process and technology improvements, planners still struggle to make their supply chains more agile, responsive and resilient.
Intelligent Automation (IA), as implemented to make business processes more streamlined and efficient, uses artificial intelligence to enhance operational performance and improve supply chain data usage. More businesses than ever are waking up to the benefits.
In fact, one recent survey conducted by Forbes showed that almost half (44%) of respondents from the manufacturing and automotive industries consider AI as highly important to the manufacturing function over the next 5 years.
But what exactly is Intelligent Automation, and why do more manufacturers need to prioritise its implementation, especially for supply chain planning? In this article, we break down the basics.
What is intelligent automation?
Intelligent automation works by analysing a range of data (from images and text to voice and video) using a number of different techniques, including AI, to automate tasks. Usually applied to repetitive, manual tasks, it frees people to focus on more value add tasks.
As advanced algorithms are applied to supply chain planning, Intelligent Automation can empower manufacturers to optimise group level production planning, reduce complexity and take the pressure off planners, allowing them to focus on anticipating and preparing to address risk.
So, how can your supply chain planning benefit from intelligent automation?
Benefit one: Optimise production planning
As manufacturers rely on production planning to link demand forecasts to factory schedules, even small changes in forecasts can have significant knock-on effects on factory efficiency.
Using artificial intelligence optimisation algorithms, manufacturers improve the sequence of products that are made on one or multiple resources. AI can account for constraints such as changeover costs, stock boundaries, and demand levels, to produce the best possible production plan.
Results exceed what is capable compared to manual methods and significantly reduce the planning cycle.
Usually, adapting to demand or capacity changes entails a lengthy Sales and Operations Planning process. This not only takes time but also drives up costs and makes it difficult to meet changing consumer demand. However, by increasing the accuracy and flexibility of your forecasts, you can overcome this issue.
As a result, intelligent process automation offers manufacturers greater scope for increasing efficiency, driving down costs and increasing the capacity output.
Benefit two: Better translate forecasts into schedules
Every manufacturer can benefit from a solid mid-term plan. It serves a crucial function by transforming a good sales and operational plan into an achievable short term schedule with good plan stability and adherence.
Without one, your business may suffer from poor plan adherence, leading to higher costs and less flexibility.
Luckily, intelligent automation provides you with the core systems you need to follow this approach. By taking large amount of data, from demand to raw material forecasts and expected production capacities, AI can be used to automate the manual task of rapidly updating plans as external and internal conditions change. So if sales wants to run large promotions while maintenance is working on key lines, AI can help planners to understand the impact on operational KPIs and how to mitigate any issues.
As a result, manufacturers using intelligent process automation have much clearer visibility over production lines, supply chain requirements and consumer demand.
Benefit three: Agile, responsive and resilient production
Following the pandemic, today’s manufacturers need to be more agile and adaptable than ever before. The bottom line is that what works for your business now may not necessarily work in a year’s time. Intelligent process automation allows you to overcome this issue by:
- Allowing manufacturers to dynamically adjust their production sequences to meet what could be significant fluctuations in consumer demand, all while minimising costs
- Making it easier to balance inventory, demand and capacity at the mid-horizon group level
- Removing human error and freeing up staff to focus on the things that really matter to your business, such as strategy
Ultimately, you’ll no longer have to deal with the rigidity of traditional non-automated processes.
Benefit 4: Cost reduction
Another big benefit of intelligent automation is the significant cost savings that your manufacturing business can achieve. These savings happen in a number of different areas, such as resource investment avoidance, inventory right-sizing and people productivity, to name a few.
But how does this work in action? Accurate and optimised production plans mean that you create only the goods that are needed, respect your stock boundaries to improve stock holding costs and meet changing consumer demand, all without having to pay for a whole workforce to take care of it for you.
So, if you’re looking to reduce your costs while cutting down on manual labour and improving efficiency, intelligent automation is what you need.
Benefit five: Enhancing customer experience
Keeping up with your customers’ demands is important for any business, but when you’re a manufacturer that competes based on service to your customer, poor planning can result in a loss of profit, brand reputation damage and missed opportunities to grow and develop your business.
To help you keep ahead of the curve, intelligent automation can streamline what you do, allowing you to go above and beyond customer expectations. From a business perspective, this leads to faster time-to-market and increased sales, resulting in higher ROI as well as a satisfied customer base.
Benefit six: Achieve set objectives
As well as what it does for your business, intelligent automation can also help you achieve set objectives sooner than expected, thanks to its ability to work and enhance production within your operational and technical constraints.
For example, in the consumer goods manufacturing space, intelligent process automation is already being used by many to improve their product mix and enhance their supply chain resilience.
So, what’s the takeaway?
Supply chain planning can greatly benefit from intelligent automation. IA can improve what is currently a fundamentally lean process to provide a greater scope for increasing efficiency, driving down costs and optimising your consumers’ experience.
Whether you choose to embrace IA or not, what’s becoming increasingly apparent is that its applications are already being harnessed by a growing number of manufacturers all over the world.
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