Supply chains of today are going digital to be able to compete in today’s fast-paced, demanding market. Not only are today’s consumers used to ordering products and have them delivered to their homes in record time, but businesses are demanding quicker order fulfillment, more product choices and faster deliveries. With digital supply chains, manufacturers gain increased revenue, improved margins, greater efficiencies and risk mitigation. The digital supply chain model will be the predominant supply chain model within five years predicts the Material Handling Institute.
Manufacturing businesses now use digital systems that connect customers, suppliers and buyers and that synchronize information and goods/services for a competitive advantage. A focus on lean processes helps to eliminate wastes within manufacturing, while increasing efficiencies, improving product quality and lowering costs. Work in process is drastically reduced, which minimizes exposure to defects in the manufacturing process and allows for quicker reaction to fluctuating customer demands.
Today’s manufacturers rely on faster picking processes for sub-assembly and assembly operations in order to meet customers’ needs. Reconfiguring machinery into cells reduces material handling and warehouse footprint. When properly executed, a company will simultaneously shorten their lead times and dramatically reduce work in process inventory. Implementing one-piece flow with U-shaped manufacturing cells is a great way to eliminate waste in most manufacturing environments with moderate amounts of variability in production size and product mix. Using compact flow cell workstations that are modular and dynamic storage units will keep inventory organized and pick efficiencies maximized, while keeping assemblies moving forward without interruption, helping to meet customer demand.
In a warehouse, the increasing pervasiveness of interconnected supply chains is creating new possibilities and opening doors to what is called the “always-on” supply chain. Sensors within material handling equipment relay maintenance and usage information to ensure uptime. IoT solutions can help provide better visibility into operations to uncover bottlenecks, find issues that can delay shipments and gather analytics for continuous improvements. IoT sensors can measure, monitor and communicate product usage and performance data even beyond the supply chain, such as to extract data throughout the entire product lifecycle for ongoing product improvements.
Sensors and smart devices connect companies with every link in their supply chain, creating a massive amount of data that can be used for making better decisions and analyzing trends. This information can be shared among all stakeholders of the supply chain. According to the 2018 MHI Annual Industry Report, “Retailers will share point-of-sale data with their distribution centers, as well as further upstream with manufacturers and vendors, creating real-time demand signals. Manufacturers will use this real-time signal to develop tighter production plans that are shared with suppliers to better manage lead times. Safety stock throughout the chain will be minimized as the links become more synchronized.”
This data feeds predictive analytics solutions, yielding deeper insights and action plans. For example, tracking and tracing an order through the supply chain can uncover supplier issues, requiring a business to add additional suppliers closer to the customer in order to meet seasonal demand. Big data analytics can also more accurately predict demand, eliminating stock-outs on store shelves.
Autonomous guided vehicles (AGVs) and drones are increasing in popularity in the warehouse as an answer to the labor shortage crisis. They can carry products throughout the warehouse, augmenting picking activity. Some AGVs are able to navigate via on-board cameras and radar systems, which help to interpret pick paths and instruct the vehicle where to go. AGVs are also being outfitted with robots that ride along with the device to help store and retrieve products in the warehouse. Others carry packing boxes and follow after pickers to take possession of items for filling orders, speeding throughput and order fulfillment while improving worker productivity.
3D printing is another digital technology that is making headway in material handling processes and manufacturing plants. Some of these printers are large enough to print a car or a house; others can print small parts quickly and cheaply. In the future, consumers may have low-cost 3D printers at home capable of printing small plastic parts that could be used as replacement parts for refrigerators or other appliances. 3D printers may also be able to print using other materials, like metal, where they can be used for more complex applications.
The bottom line is that customer demand for rising service expectations and lower cost is driving the move to digital supply chains. By adding innovative systems to the supply chain, businesses will gain a competitive edge that will lead to sustainable market leadership.
Brian C. Neuwirth is VP of Marketing and Sales at UNEX Manufacturing, a provider of order picking solutions that maximize space usage, increase pick rates and improve ergonomics.