Meeting twin goals of sustainability and efficiency is big challenge for supply chain professionals everywhere. Bill Leedale, Senior Advisor for Manufacturing and Engineering for IFS North America explains the situation: "For sustainability to take hold at many firms, management has to reconcile conflicting objectives all the way down the chain. Too often, the top-level message is about sustainability, but it is also about low cost, so you have to be really disciplined to reach both objectives, otherwise the lowest-cost option will win".
In fact, what may appear to be a low-cost option at one point in the supply chain may actually be more costly at later stages in the process, or expose an organization to increased risk over time. Sustainable processes maintained consistently across the entire supply chain are not only environmentally, socially and ethically beneficial -- they're economically wise choices, too. Deloitte says that "a green supply chain is good for society and the planet, but it's also good for your bottom line and brand". Top supply chain executives know that it's true. In a recent survey more than two-thirds of them said that sustainability is an important part of their strategy for the future. Still, the question remains as to exactly how they will apply it.
Enforcing green efficiencies throughout the supply chain can be exacting work if it's only done through manual oversight. Multiple locations and moving logistical targets combine with a minefield of regulations and compliance requirements to make consistency difficult to maintain across siloed processes. It can take many hours of painstaking monitoring by many people. But there is a better way.
Automated Allies
To succeed in enforcing and maintaining consistent processes in the supply chain, there are no more powerful allies than automated processes. Companies need to look no further than customer service giants Amazon and Apple for examples of how automation at the core of supply chain process builds an efficient, successful and greener company. Automated processes allow organizations to align repeatable business processes with achievable business goals by executing tasks with exacting precision and speed every time.
Like other consultancies, Deloitte encourages companies to "improve ERP-enabled manufacturing activities" for a long list of tasks including energy consumption, remanufacturing, packaging, greener truck routes and logistics and compliance.
Connected, automated processes eliminate the need for warehouse space by quickly sourcing products from partners directly within procure to pay. Automated order-to-cash systems reduce energy use and provide unbeatable customer service at a lower cost—with a reduced carbon footprint. Processes that are automated on a solid platform are easy to standardize and change as well. At the same time, automation offers up more visibility into what's actually going on with parameter-based notifications and if/then logic built in to handle any changes. Automation eliminates the need for manual oversight on every level as it improves visibility overall. Fifty-two percent of the respondents to the PricewaterhouseCoopers (PwC) Global Supply Chain Survey last year said that implementing techniques to automate and increase transparency is a significant supply chain trend that will increase in importance in the future.
Beyond the Symptoms
No matter what the industry, organizations worldwide have found that automated processes -- from the manufacturing floor to the back office -- provide greater reliability and standardization to align results with expectations. Core business activities can be streamlined to function according to consistent business rules and compliance initiatives easily with automated processes. Instead of simply watching for inconsistencies, inefficiencies, or not-so-green practices, companies that use automation for the supply chain address the root causes of unsustainable steps. There are many examples of how this works.
- A large US retailer that offers more than 900,000 products -- many of which through a massive partner network -- needed to process orders within a 24-hour window for next-day delivery. This was an issue of market differentiation as well as efficiency to support green initiatives. Originally the complex process took nearly two days to complete. With automated order-taking and stock validation both within the company and within its partner network, the organization now completes every order in just a few hours and significantly reduced operating costs.
- Another global distributor of electronics and maintenance products used process automation for greater consistency and visibility across multiple continents and time zones. The firm now completes the order-to-pack cycle in less than 20 minutes, while web orders are processed in three minutes.
- A large manufacturer of consumer products needed to coordinate more than 200,000 workflows including complex sourcing, manufacturing and delivery steps across more than 30 critical systems to provide green, cost-effective service to its distributors. This meant controlling corporate master data, financial processes, production processes, warehouse functions, sales processes and customer service functions from a single, connected source. More than 20,000 employees depended on total accuracy of the supply chain to avoid costly -- and energy inefficient -- down time. With automated processes in place, the company now enjoys optimal efficiency with no unexpected down time.
As corporate leadership focuses on sustainable growth, issues of consistency and quality emerge in every process. Nowhere is this more apparent than in the supply chain. Inconsistent processes produce inefficiencies that are bad for business and the environment. Inaccurate information and lack of visibility make demand forecasting more challenging while also hiding expensive, wasteful steps. By automating processes as much as possible in the supply chain, companies can make the most of all resources and information while providing high levels of customer service in a greener and more sustainable cycle.
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Jeff Rauscher, Director of Solutions Design for Redwood Software, has more than 31 years of diversified MIS/IT experience working with a wide variety of technologies including SAP, HP, IBM, and many others. Rauscher has worked in operations management, data center relocation, hardware planning, installation and de-installation, production control management, quality assurance, andcustomer support.