As an SME (small or medium-sized enterprise), you might think that supply chain automation is only for the big companies. Maybe it conjures futuristic robots or expensive tech in your mind, so you’re sticking to manual tasks.
Supply chain automation can offer many benefits to SMEs, from increased efficiency to lower costs. For SMEs, embracing these innovations is not merely a trend but a critical strategic move that can transform your operational capabilities and drive sustainable growth. This article delves into the importance of supply chain automation for SMEs.
What Is Supply Chain Automation?
Supply chain automation is when a business uses automated technology to manage and control processes within their supply chain, from procurement and production to distribution and logistics.
Much like a sales automation system, supply chain automation often improves efficiency and reduces the likelihood of human error.
Examples of Supply Chain Automation
- Inventory management: Automated systems track inventory levels and can often predict demand as well as trigger reordering processes to ensure optimal stock levels.
- Order processing: Supply chain automation streamlines order processing. This is because automation tech can handle order entries and confirmations as well as status updates without the need for manual intervention.
- Warehouse management: Automated warehouse management systems (WMS) control warehouse operations. This typically includes picking, packing, and shipping. For example, an automated WMS can generate shipping labels and any necessary documentation.
- Transportation management: Transportation management systems (TMS) automate the planning and tracking of your goods transportation. For example, these systems can optimise routes to reduce costs and improve delivery times.
- Demand forecasting: Automated demand forecasting uses historical data and machine learning algorithms to predict future demand for your products. This helps you plan production and inventory levels more accurately.
- Procurement: Automated procurement systems are used to handle supplier selection and purchase orders as well as invoicing and payments.
- Supplier relationship management: Automated SRM helps you maintain supplier data throughout the supply chain process. These systems can be used to track performance and manage contracts with suppliers.
- Data analytics: Supply chain automation technology also facilitates the collection and analysis of data across your supply chain. This means you can get real-time insights into your processes.
- Customer relationship management: CRM systems are one of many useful software integrations that can go hand-in-hand with automated supply chain systems. When integrated with supply chain automation, your CRM system will help you manage customer interactions and track orders.
Benefits of Supply Chain Automation for SMEs
Enhanced Efficiency
Automation significantly reduces the need for manual intervention. This can cover a range of supply chain processes, including inventory management and shipping. This ultimately leads to faster and more efficient operations.
For example, if you’re a B2B retailer, you may already use automation software like Dealfront lead generation. But an automated system can help you too, as you can use it to track stock levels in real time, automatically reordering items when stock falls below a predefined threshold.
Automated systems are also designed to minimise human errors. If your business ships a wide range of products, implementing an automated order management system means you can reduce errors that often occur with manual entry, such as incorrect product quantities or shipping addresses. This leads to fewer returns and customer complaints.
Similarly, exploring how to sell on Amazon without inventory can simplify your processes by reducing the need for manual inventory management.
Cost Savings
As a small or medium-sized business, you’re probably always on the lookout for cost saving ideas. Automating repetitive tasks means that SMEs can reduce labour costs and reallocate human resources to more strategic activities, such as product development or quality assurance.
In addition to saving on human resources, automated inventory management systems help maintain optimal stock levels, which reduces the costs associated with overstocking and stockouts.
Improved Customer Satisfaction
We all want to get our orders shipped quickly and efficiently. If a company takes too long to ship something, we might not return for a repeat purchase. Automation enables quicker processing and shipping of orders. This of course leads to shorter delivery times and increased customer satisfaction.
In addition to speeding up shipping, automation can also improve your customer communication by providing timely updates and proactive engagement throughout the order process. This is especially true if you can integrate your supply chain software with a call center for businesses, so your customer service team can access order info quickly.
Better Scalability
Automated systems can handle increased volumes with minimal additional investment. This makes it much easier for your SME to scale operations as you grow. For example, a skincare company might use automated production lines to mix and fill as well as package their products. As demand increases, they can easily scale up production by increasing the operating hours of the automated lines without needing to hire a large number of additional workers.
Supply chain automation also means you can quickly adjust to market changes and fluctuations in demand without the need for significant changes to your infrastructure.
Data-Driven Decision Making
Data-driven decision making is the future of business. It takes the guesswork out of your business decisions. But you don’t need to be a data expert to access this. Automated systems often provide real-time data on inventory level and supply chain performance.
With the right software, you can access advanced analytics and forecasting tools that also help predict demand trends. You can use this info to optimise inventory and production planning according to concrete data.
Improved Supplier and Vendor Management
Procurement can be a long and drawn out process, especially for SMEs just starting out. Supply chain automation simplifies many of the procurement processes, from supplier selection to order placement and invoicing.
The improved data you can gather from automated supply chain systems also means you can track and evaluate supplier performance. This quickly helps you maintain high standards and even negotiate better terms with your suppliers and vendors.
Enhanced Compliance and Traceability
The last thing your small or medium business needs is a compliance breach or legal problem. Luckily, automation can help with this too. In the first instance, it allows you to maintain accurate and up-to-date records at all times.
Technologies like Radio Frequency Identification (RFID) and blockchain also provide end-to-end traceability of products throughout the supply chain. This is essential for any growing business, as it improves transparency and accountability.
Upgrade Your Supply Chain Processes with Automation
Embracing supply chain automation isn’t just about keeping up with technological trends—it’s about making it possible to compete in your industry. As we look to the future, the strategic adoption of automated solutions will undoubtedly continue to be a cornerstone of success for SMEs. Supply chain automation can allow you to innovate and scale effectively.
