February 27, 2023

Supply Chain Automation Picks Up Speed in 2023: How Technology is Rapidly Transforming Operations

Automation is poised for another banner year of transforming global supply chain operations, delivering increased efficiency, accuracy, flexibility, visibility, and innovation.

Automation is poised for another banner year of transforming global supply chain operations, delivering increased efficiency, accuracy, flexibility, visibility, and innovation. Supply chain industry research suggests that half or more companies will be investing in intelligent software in 2023 and catching the wave of new automation tools that are catapulting operators into a new era of supply chain management. From artificial intelligence (AI) to machine learning (ML) and augmented reality, technological advances are on the move, but it is the speed of advancement that could provide the most gains in the year ahead.

Automation Ahead

Overall, the supply chain industry has several trends shaping its future and improving the capability of supply chain operations to continue lifting out of pandemic-induced disruptions that continue their global ripple effect. Among trends worth watching include increased supply chain agility and visibility, along with a continued focus on last-mile delivery, omnichannel fulfilment and e-commerce systems. But automation stands as one of the most important trends for 2023.

Gartner predicts that by 2026, 75 percent of large enterprises will be using intralogistics smart robots in their warehouses and will be more heavily invested in cyber-physical systems that can be deployed in distribution centers. In just three years from now, another 75 percent of commercial supply chain management application vendors will deliver embedded advanced analytics (AA) and artificial intelligence (AI) within their applications to improve decision making, according to Gartner.

Recently, two business units from within logistics giant UPS and retail giant GAP announced they were combining their expertise to offer “unmatched automation and supply chain capabilities” to apparel and footwear merchants. And in January, Sam’s Club announced it aims to modernize it's supply chain with expansion of automated fulfillment.

Meanwhile, the Council of Supply Chain Management Professionals (CSCMP) has billed this current time for the supply chain industry as the start of a golden age of robotics

Robotics—and the software used to direct and guide them—have evolved to the point where they are now well-suited to the dynamic and variable warehouse environment, CSCMP reports. As a result, a rapid adoption of smart robots is ahead. So are other advances.

Through 2025, 25 percent of supply chain decisions will be made across intelligent edge ecosystems, or physical locations where things, people and data connect, such as operators, machines, and sensors, according to Gartner.

Edge ecosystems deliver the infrastructure needed for automated network tools, devices, and applications to work. As automation tools have advanced, so have data communications services, such as Wi-Fi, Bluetooth and 5G, which further support edge ecosystems and boost traditional supply chain solutions.

All these advances and innovations point to the critical transformation driven by supply chain automation.

Automation Defined

Supply chain automation, in basic terms, refers to the use of modern technologies which automate traditionally manual tasks to streamline workflows and increase efficiency. Technologies on the list include warehouse robotics, IOT innovations, AI, ML, predictive analytics, digital process automation, optical character recognition and data entry automation, among others.

The benefits of automation, both in and out of the warehouse, include increased efficiency. That can look like increased warehouse throughput time, reduced labor and operational costs, elimination of human error, and improved inventory management.

AI, for example, can help companies optimize their supply chains by identifying bottlenecks and trends in production, labor, and pricing. That optimization can be leveraged to reduce costs and increase revenue. Nearly 25% of supply chain professionals reportedly point to delivery costs as one of their top issues. Supply chain automation can take an entire transportation process and streamline it, cutting down on delivery costs.

Automating supply chain management, including the deployment of technologies such as Robotic Process Automation (RPA), AI, and ML, all can eliminate errors and enhance speed. Cloud services provide safe and secure storage of large volumes of data and provide access to decentralized data that can be easily accessed by various stakeholders, while ML helps in accurate demand forecasting to optimize production planning and control.

Automation Trends

Other growing supply chain automation trends and their impacts include:  

Data Analytics - Data is increasing at an exponential rate for most companies and becoming increasingly difficult for humans to keep track of across multiple business activities and to perform data analysis. AI can transform data to provide valuable insights and ML facilitates predictive and prescriptive analysis.  

Autonomous Systems - Autonomous technologies like drones, robots, and vehicles, that function independently, are expected to revolutionize how the supply chain functions, enhancing efficiency and offering more transparency in supply chain management.

Hyper automation - Hyper automation is the integration of technologies like AI and ML with RPA. This makes automation intelligent, and the automation can make decisions in addition to automating routine processes. Hyper automation is expected to play a vital role in functions such as warehousing, logistics, production, and more.

Digital Supply Chain Twin – A digital supply chain that replicates an existing supply chain. It is the basis for end-to-end decision-making in a supply chain and enhances situational awareness and facilitates accurate decision making.

Supplementing Human Workforce

Innovations in supply chain automation also address the industry’s labor issues and shortages. Challenges finding enough workers with the right skill sets have opened the door wide for the adoption of automation technologies.

Robots, for example, address the need to automate certain processes to supplement the human workforce. Implementation is faster and less expensive than more traditional means of automation, such as conveyor sortation or automated guided vehicles. 

Many of the country’s largest retailers and companies are searching for more ways to automate, particularly for repetitive work inside a warehouse or for tasks where the introduction of human error is more likely.

AI has been hugely beneficial in the areas of planning and forecasting, notes ketteQ Solutions Director Bhuva Mirdha. With automation there is often unlimited capacity, such as with data analytics and forecasting scenarios. Adding to that is the accuracy automations can provide.

Automation Ally

The rapid evolution of supply chain automation has forced more and more companies to expand supply chain strategy and make deeper investments in technology. The speed at which supply chain automation capabilities are increasing, along with ongoing supply chain disruptions requires action, but also strong partners, notes Mirdha.

ketteQ partners with companies to help them assess specific supply chain needs, craft strategies for digital transformation and the adoption of automation technologies and adopt greater end-to-end visibility across operations.

ketteQ, the only digital platform for supply chain planning and automation built and deployed on Salesforce and AWS clouds, offers a broad range of solutions designed to meet the growing needs of supply chain operators and to help them navigate today’s supply chain environment.

Reach out and learn more about how ketteQ can help you level up your supply chain operations.

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Nicole Taylor
Sr. Director of Brand and Marketing Communications
About the author

Nicole has over 18 years of marketing experience across a wide range of industries including SaaS, Advanced Manufacturing, Hospitality, and Non-Profits. She is a data-driven, detail-oriented marketer adept at developing and executing all aspects of marketing to optimize and leverage visibility to drive growth for brands.