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4 Ways to Improve Productivity in the Supply Chain in the Midst of a Labor Shortage

An unstable and unpredictable supply chain is challenging manufacturers and distributors to meet customer expectations. Add to that the impact of labor shortages at all points in this chain: at raw material suppliers, ports, your own business, logistics partners and more.

When it comes to workforce concerns, very few business economists appear hopeful. In this environment, distributors and manufacturers need to sharpen their processes to optimize their productivity. This will empower them to do more without adding staff – and even be prepared should they lose staff to the predicted “great resignation.”

Set yourself up to thrive even if you’re forced to run lean.

Identifying where opportunities lie to do this is a challenge. To help, we’re sharing a three-part series highlighting the opportunities with the greatest potential for improved productivity in distribution and manufacturing. The first provided 5 ways to improve sales productivity. In this second installment, we talk strategies for greater productivity in the supply chain.

Why target the supply chain for productivity improvements?

The supply chain is where a significant amount of loss and waste occurs due to delayed communications, bottlenecks, and lack of oversight and visibility.

The right investments can help you respond faster to volatile supply and demand, and quickly identify issues with orders so you can act. They can also help you be proactive about shifts and disruptions in the supply chain and improve your forecasting for planning in real-time.

Industry experts recognize this potential. According to an Ernst & Young survey of senior-level supply chain executives, respondents’ top supply-chain priorities over the next year include: increasing efficiency, retraining and reskilling the workforce, and increasing visibility.

These priorities go hand in hand with productivity. Increasing efficiency and visibility involves introducing advanced technologies such as automation, artificial intelligence (AI) and machine learning. That demands reskilling and retraining of employees.

Then, there’s the undercurrent of maintaining health and safety to curb pandemic-related disruption in operations. This, too, calls for reskilling with digital technologies, automation and virtual collaboration tools.

Investing in technology to improve supply-chain productivity will not only help manufacturers and distributors do more with less amidst a labor shortage. It will also set the stage for the coming shift toward supply chain 5.0, which optimizes the human-and-machine relationship. Businesses must first build their supply chain 4.0 technology foundation, which includes data analytics, robotics, automation, the Internet of Things (IoT) and integrated, cloud-based business solutions that centralize operations and enable virtual collaboration.

Strategies to improve productivity in the supply chain

To protect and improve your productivity as it relates to the supply chain, deploy the following strategies.

1 Improve operations with advanced equipment

Investing in advanced equipment that lets people do more with less will help you achieve efficiencies and improve productivity across several areas of the supply chain. This includes inventory and warehousing, production, picking, packing and shipping, and more.

Pinpoint the investments that offer the greatest returns or solve for the most resource-draining knots in your processes, rather than choosing equipment based on others’ results. Which equipment would truly improve productivity? For instance, on a production line, robotic arms and co-bots allow workers to amplify their productivity or perform other tasks entirely.

Robotic equipment also helps with social distancing and, as such, is expected to gain popularity in the coming years. According to Gartner, demand for robotic goods-to-person systems in warehouses is expected to quadruple through 2023. These systems are inherently more efficient and will drive productivity.

According to Forbes, autonomous trucking is a promising technology for businesses to consider in their logistics strategies. And robotic automated storage and retrieval is in the “high-value” category, though it isn’t being used broadly just yet. Additionally, wearables and other forms of augmented reality (AR) and virtual reality (VR) provide greater opportunity to social distance and enable remote and virtual collaboration for manufacturers and distributors.

2 Gain greater end-to-end visibility with integrated systems

Visibility is the name of the game right now across industries. Simply being able to “see” where products and materials are along the supply chain gives you more control over the outcomes. Collecting data throughout the supply chain that feeds into machine learning and AI models helps you make forecasts so you can make profitable decisions using real-time information.

Such visibility is difficult to gain when you operate with dozens of systems that don’t communicate. Today, technology enables businesses to make more instantaneous connections and synchronize data, pulling it into one location. You can now follow and check in on your supply chain from anywhere at any time and set alerts should there be an issue along the way.

Anyone who has operated through the pandemic without such capabilities understands the inherent value of greater visibility. They would be able to spot disruption in real-time and respond appropriately to find alternative options and protect their bottom line and customer relationships.

Integrated systems in the cloud give you end-to-end visibility of the supply chain so you can be more agile and respond in the moment.

Internet of Things (IoT) devices can play a vital role in gaining this visibility. These devices, connected to a centralized system, deliver data in real time. You can use them in nearly all areas of your operations and supply chain, from planning to logistics. You might even discover areas where you’re wasting resources or experiencing delays that can be avoided.

3 Optimize operations with automation and digitalization

Ernst & Young’s survey revealed that supply-chain executives believe “the race is on for digital enablement and automation.”

  • 64% expect digital transformation to accelerate
  • 52% say the autonomous supply chain is “here or will be by 2025”

Administration may put more weight on your productivity than you realize. The procure-to-pay process, for instance, absorbs employees’ time and can easily lead to delays, backlogs and longer order cycle times. Use automation to close the gaps in which employees would otherwise manually enter data, make follow-up calls, leave emails unread and more.

The Conexiom Platform for Supply Chain, for instance, helps supply chain professionals improve productivity through greater efficiencies across operations. It is built to integrate with the systems that businesses are already using and familiar with. With it, you can automate the procure-to-pay process, including order acknowledgements and advanced shipping notices.

This process tends to involve a lot of manual documentation, data entry and email exchanges. Humans can only respond and review so quickly, and it’s particularly challenging to be quick if you’re short-staffed or have individuals wearing many hats. Automating this process will not only improve productivity and timing. It will help you gain greater visibility and empower you to anticipate disruptions or shifts and respond accordingly.

4 Invest in data analytics, AI and machine learning 

Your systems and IoT devices can pull and deliver data to a centralized system, where it can then be organized and analyzed for actionable insights, used to fuel AI and continually “learned” by machine learning technology. This empowers you to make better business decisions that bolster productivity and reduce inefficiencies and enable you to respond to disruptions in real time.

You can also be more proactive and make meaningful changes in your operations that improve productivity. You’ll be able to make more accurate forecasts and predictions about demand and better understand asset performance to prescribe the appropriate maintenance ahead of possible issues, preventing downtime. And operational insights will reveal where your greatest inefficiencies and waste are.

This technology is how you get to “autonomous.”

Do more than keep the supply chain moving – get ahead of where it’s going

These are some of the most effective tactics for improving productivity in the supply chain without adding staff. You’ll notice that these strategies involve common technologies that enable them, such as Internet of Things (IoT), data analytics, cloud software and others. These technologies set the foundation for the supply chain of the future, while also maintaining your balance and productivity in the present.

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