Understanding the Pakistan Budgeting Process: Basics and Key Insights
How Automation is Evolving and Adapting Across the Supply Chain
1. SCLA 2018:Distribution and InventoryPeerGroup Reference Information:Automation
https://info.siteselectiongroup.com/.../a-look-at-the-effects-of-automation-and-same-delivery
www.mckinsey.com/featured-insights/future-of-organizations-and-work/how-will-automation-affect-
jobs-skills-and-wage
https://blog.walmart.com/innovation/.../a-look-inside-walmarts-next-gen-test-stores
https://www.chinamoneynetwork.com/2017/01/06/cdh-leads-360m-series-a-round-in-sf-express-hive-
box-unit
SupplyChainManagementReviewSCMR- The analytics revolutioninLast-Mile Delivery
How data,analyticsandconnectivitychange the waycompaniesmanage—andvisualize—the most
complex partof a global supplychain.
SCMR- By Gary Forger · September26, 2017
It’stime to thinkof automationinthe supplychaindifferently.Quitesimply,the purpose of automation
isexpandingasnewformsof automationevolve andtransformhow workgetsdone.
To begin,the purpose of automationischanging.
“The lasttwenty-five yearswasall aboutwhocouldmake thingscheapest,andthe nexttwenty-five
yearswill be aboutwhocan make thingssmartest.”
So saysAntoine vanAgtmael inThomasFriedman’sbookThankYouForBeingLate.Agtmael isthe
investorcreditedwithcoiningthe term“emergingmarkets.”
As thatparadigmshiftsinbothdistributionandmanufacturing,supplychainautomationwill change
dramatically.Sorry.That’sbackwards.It’sactuallythe otherwayaround.Changesinautomationwill be
fundamental toworkingsmarterinthe supplychain.
Cost still will be important,butnewcapabilitieswill allow automationtoadaptto changesinthe supply
chain.In fact,technologiesnotpreviouslyconsideredpartof the story are rapidlybecomingcentral to
itssuccess.That’s the secondmajorshiftinautomation.
Historically,muchof existingautomationhardware wasboltedinplace andperformedrepetitive tasks.
Similarly,mostexistingsoftware (the otherformof automation) runsinaloop, repeatingwhatitdid
before withoutadaptingtochangesinthe supplychain.
That has beenthe case for as longas there hasbeenhardware andsoftware automation.Butemerging
technologiesadapttochangesinsupplychainconditions.That’sacompletely differentnarrative for
supplychainautomation.
Historically,few of uswouldhave includedrobots, artificial intelligence (AI) andthe Internetof Things
(IoT) inthe supplychainautomationlineup.Butyoushouldnow.Infact,the metamorphosisisfurther
alongthan youmightrealize.
2. Take robots.
ElectronicsdistributorIngramMicro isinvesting$10 millioninHDSGlobal.The warehouse
automationstartupisdevelopingwhatitcallsswarmsoftware thatenables100 or more different
typesof robotsto collaborate andfill orders.
Target has itseye onwhat isbeingcalledautonomousindustrial robots.Automationhardware
supplierSymboticdevelopedthe automatedstorage systemsandalreadyhasthe technologyin
place at its sistercompanyC&SWholesale Grocers.
DHL istestingcollaborative robotsthatworkalongside peopletofill e-commerceordersin
Memphis.LocusRobotics,whichsuppliesthe robots,alsousesthematitssistercompany,Quiet
Logistics,forapparel orderfulfillment.
Overat RochesterDrug’s DC in westernNew York,autonomousmobilerobotsare pickingitems
directlyfromshelvesusingsuctioncupsbefore placingtheminatote.IAMRobotics,whichwas
recentlyawardedapatentformobile piece-pickingrobots,designedthe robotsspecificallyfor
RochesterDrug– thinkof it as purpose-builtdesign.
None of these advancesphysicallylookmuchlike robotsthathave come before them.More
importantly,theyare highlyadaptive tochangesinthe supplychainfromscale tovelocity.Such
flexibilityputsawhole newface onautomation.
The third shiftisjustas importantbutmay well be overlookedbymany.Atleastatfirst.
Historically,automationhasbeenabigbang event.Thinkenterprisesoftwareormassive automated
handlingsystemsforstorage andtransportation.Those will still happen,eliminating(ornearlyso)
people fromaDC or manufacturingfloor.Butnow thistype of traditional automationwillshare the
stage withautomationof a far differentilk.
Look forAI, robots andthe IoT to automate activitieswithinjobsratherthaneliminate entire jobs.That
will make automationastealthforce inthe supplychain.
Automationwill change whatpeople do,oftencollaboratingwiththemandremovingcertainactivities
fromtheirjobs.Exceptforthe people directlyinvolved,these shiftsmaywell gounnoticedbymostfor
some time.
In general,McKinseyestimatesthatonlyabout5% of all occupationsare likelytobe fullyautomated.
But the consultingfirmalsoexpectsthatnearlyhalf of workeractivitiescanbe performedby
automation,especiallyrobotsandAI.
A currentexample of thisshiftisvehicle automation.We all jumpquite quicklyfromdrivingvehicles
ourselvestoreadingabookwhile AIdoesall the work.It’sa lotmore nuancedthan that inreality.
SAE International,the professional associationof automotive engineers,hasestablishedsix levelsof
vehicle automation.Itstartswithnoautomation.Justyouor your sisterdrivingthe car.In the middle
fourlevels,artificial intelligence andhumanscollaboratetovaryingdegrees.Onlyatthe toplevel does
AI doit all.
How quicklywe gettothat top level isanybody’sguess.Butuntil thathappens,AIwillsimplybe
replacingpeopleincertainactivitiesthatare part of driving.
3. Thenthere’sthe IoT.The storyhere goesfar beyondthe supplychain.However,don’tthinkfora
momentthatthe supplychainwill be anexceptiontothe rapidgrowthof the IoT andthe data itcollects
and connects.Some call itthe Industrial Internetof Things.
Last year,it wasestimatedthat17.6 billiondeviceswere connectedtothe Internet.Thatisexpectedto
climbto 80 billionby2025. Many of these devicesandconnectionswillsurelyformthe new information
backbone of the supplychain.
One place thisinterconnectednetworkisalreadyatworkisinpredictive supplychainmaintenance.
Mundane,butmore veryimportant.
Usingdata over the IoT,maintenance departmentsare now able toanticipate difficultieswithvarious
typesof equipmentmovingandhandlingindividual itemsorfull palletloads.Asaresult,unscheduled
(andcostly) downtime due tounexpectedequipmentfailure isreplacedbyconvenientlyscheduled
downtime forpreventativemaintenance.
At the same time,some people have avisionforlinkingtogetherall theseautomateddatapointsand
creatingan unparalleledautomatedsupplychainvision. Alessandrode Luca,chief informationofficerat
pharmaceutical supplierMerck,isone of those.He,and others,call itthe self-drivingsupplychain.AIis
central here,resultinginasupplychainthatwill somedayoperate digitallywithlittle if anyhuman
intervention.
That transformationisalreadyunderwayatpharmaceutical supplierCiplainSouthAfrica.
It’sworth notingthatCipla’ssupplychainprofessionalswereoriginallyquite skeptical.Theysimply
didn’tlike the ideaof movingfromahuman-basedforecastingsystemtoone thatis now well alongthe
wayto the driverlesssupplychain.While theydiscoveredhow tomake the transition,theywererightto
be careful.Automationisn’talwaysthe answer.
You may recall hearingearlierthisyearaboutthe companyJuicero,whichsolda$700 Wi-Fi-enabled
juicertosqueeze prepackagedjuice frompacks.Some bigname venture capital firmsaswell as
Campbell’sSoupsinvestedheavily,bettingonthe juicer’sconnectionbetweenthe IoTandthe juice
culture.ThenBloombergshowedinavideohow a reportercouldmanuallysqueeze the juice outthe
packs justas effectivelyasthe $700 press.Game over.
In the Eighties,the supplychainwentdownasimilarroadwhenitseemedeveryindustrialcompanyCEO
had to have a robot,whetheritwasappropriate or not.The trick thistime aroundwill be toapply
automationtothe supplychainwhere itmakessense andletrealityoverpowerthe hype.Because itwill.