The world-shaking event of the coronavirus pandemic has led to an economic downturn in many markets, on top of unpredictable supply and demand shifts. Due to these challenges, industrial supply chain operations are looking to trim the fat.
Minimizing expenses in supply chain can be handled in a variety of ways. Currently, new technology solutions are emerging as a frontrunner for imposed changes. Tech like artificial intelligence processes and devices on the Internet of Things (IoT) can help supply chain managers keep costs to a minimum.
When it comes to an uncertain economic environment, cutting costs is more important than ever. Luckily, these new technologies are sweeping in with the assist. Here’s how supply chain operators are minimizing expenses with the help of technology.
Tech approaches to cutting costs
Reduced costs across supply chains are coming from what may be an unlikely source: data collection. With the assistance of data scanned from checkpoints at every refinery, factory, and warehouse, industrial supply chains are better able to improve every element of their operations.
Powered by this collated data—often referred to as big data—new technological innovations are improving efficiency across supply chains.
Here are a few of the most prominent of these cost-cutting tools:
Automation and robotics
Through the power of artificial intelligence, more and more processes across supply chains are being automated. Often this automation occurs in spaces that present some risk to human workers. From moving heavy loads to tirelessly sorting and packing, automotive and robotic systems are keeping human workers from hazards they would otherwise face.
In addition, automation allows companies to broadly enhance their efficiency. This means more output in less time, saving supply chain managers labor costs while maximizing available product. According to MIT, the use of robotics can increase warehouse capacity by as much as 20%.
Big data is playing a substantial role in the digital transformation of the supply chain industry. Companies that integrate data resources are experiencing profit margins 5-6% greater than their competitors, driving the push for data tools across industries.
In supply chain operations, data enhances every aspect of the industry. By providing insights into suppliers, demand, availability, route information, freight patterns, and so much more, data can create an outline of the industry as a whole, allowing managers to integrate improvements.
All the added efficiency data creates can help save costs on every front—from labor, resources management, fuel costs, and more.
The Internet of Things is the device networking making possible all kinds of smart products. In supply chain operations, IoT is enhancing everything from product storage to energy efficiency, providing additional data and streamlining processes.
In food manufacturing, for example, IoT devices are used to monitor and control temperatures in smart refrigeration systems and transport vehicles. This helps reduce waste, allowing supply chain managers to cut down on inventory expenses.
Smart devices on the IoT have helped shape the drive to cloud data systems that allow for enhanced communication across supply chains. In turn, all kinds of automation are possible, enabling a faster, better supply chain for reduced costs.
The changing supply chain industry
The coronavirus pandemic proved that data transformations are essential in the supply chain industry. With supply and demand fluctuating as all over the world, businesses experienced interruptions, delays, and transition pains as they shifted to the new normal. The need for comprehensive decision-making tools increased. Luckily solutions are available in automation, data tools, and IoT devices.
The integration of this tech in supply chain processes can provide much-needed resiliency in the uncertain times in which we live. As operators contemplate cost-saving measures, investing in data tools may offer long term savings in the benefits they can offer every aspect of the industry.