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Automation vendors are rapidly innovating and delivering solutions that put smiles on the faces of both the warehouse leaders responsible for shipping products and the finance leaders in charge of pulling together the financial statements. While automation is key to successful logistics and supply chain functioning, upstream improvements in vendor and supplier communication, data accuracy, inventory management, purchase order management, and sourcing footprint enable companies to take full advantage of this automation.
From receiving to shipping, automation solutions yield optimal performance when upstream data and physical goods are available, accurate, and flowing without disruption or wide swings in variability, which is crucial in the volatile market we’re facing.
“Timely communication is critical to maintaining a strong upstream relationship”
This holiday season, the most impactful focus area for warehouses will be leveraging automation roadmaps in parallel with the upstream relationship with supply chain partners. In doing so, there are three key considerations that managers should keep top of mind.
Making Sure Communication Lines Are Timely and Flowing
Timely communication is critical to maintaining a strong upstream relationship. Receiving pertinent information regarding the flow of your vendors’ goods will allow you to better plan your warehousing and logistics operations, in addition to communicating the status of saleable inventory and backorders with your customers. There’s an old business axiom that says, “walk to me with good news and run to me with bad.” It’s easy to avoid difficult conversations about goods stuck in a port, held up at the railyard, or sitting in a factory awaiting critical components, but you’ll never be able to optimize your network or take advantage of the automation tools available (AI/machine learning technology) if you have outdated information from your upstream supply chain partners, i.e. ensuring that your vendors are in compliance regarding pre-existing and new purchase orders.
Talk with your vendors frequently, demand accurate information, adjust your inventory management strategy as needed, and monitor vendor compliance.
Optimizing Your Data Tracking
Double down on the accuracy of the information you’re receiving. Many companies have inbound loads that arrive unannounced while the tracking information shows the container is still stuck at the port. Supply chain delays at the moment are a way of life, but that is no excuse for incorrect status updates. When warehouses have accurate and timely information available from upstream vendors/suppliers along with the right automation tools (i.e. mobile robots, automated trucking systems), they can minimize cycle times, reduce costs, and increase service levels in shipping, optimizing their performance.
Diversifying Sourcing Options
Work diligently to develop other sourcing options, especially those that are closer geographically and are committed to fostering the adoption of automation technology in the supply chain to improve the flow. We all know about port congestion. Have you researched and developed domestic sourcing options? It may not eliminate all delays, but it can reduce lead times and risks associated with importing goods through a constrained port system. Weigh the extra costs (if there are any) of domestic options with the cost of missing orders, reduced sales revenue, and disappointed customers. And remember, it doesn’t have to be an all-or-nothing switch. You can develop a hybrid system of vendor diversification using both domestic and international vendors.
In the current global supply chain crisis, working upstream with your supply chain partners is the most impactful focus area in the short term in order to work in parallel with your automation roadmap. In this new environment, to stay ahead, it is imperative that retail companies have a logistics roadmap designed to take full advantage of automation’s tangible benefits.