Supply Chain and Operational Efficiency: Automate Smarter May 2022
Future-Ready Operations for Resiliency in an Uncertain World
Becoming future-ready means scaling up capabilities relevant to future competition and conditions. Between a pandemic, war, and inflation, companies are facing a business environment with unforeseen challenges that reflect the realities of operating in an uncertain world.
Adjusting to this “new normal” doubles as a source of resilience for organizations. It reflects how companies can adapt, the robustness of their internal capabilities, and the ability to find new sources of growth. And as uncertainty increases, it becomes even more critical for companies to be future-ready and is bringing operational excellence back into vogue.
No area of a business exemplifies the challenge and opportunity of being future-ready more than the supply chain. Most consumers were not aware of it until the pandemic as they hunted for toilet paper, baby formula, cars, and other essentials. Supply chain woes have continued into 2022 and driven the high inflation that has dominated economic news. The Institute of Business Forecasting and Planning states that demand forecasts are off by a staggering 37% on average, resulting in excess safety stock, poorly timed promotions, and market-share loss.
As a force multiplier, hyperautomation has rapidly shifted from being optional to vital because of the relentless demand to shift to digital business models. IT leaders must use the technology as an ongoing catalyst to optimize task-level digitization through process-level enablement to achieve agility and resiliency. For the third year in a row, hyperautomation was named a Gartner “Top Strategic Technology Trend for 2022” to help address CEO and Board demand for accelerated growth and operational excellence.
Over 80% of organizations report increased or continued investment in hyperautomation initiatives. Gartner estimates that more than 56% of organizations have an average of four or more concurrent hyperautomation initiatives underway while leading companies have over 10 programs.
Does Your (Supply) Chain Hang Low?
As companies deal with one challenge after another across the global supply chain, they are discovering unexpected opportunities to innovate. Digital supply chain management—driven by intelligent workflows—can help them be more agile, more flexible, and more resilient.
According to a recent study on supply chain resiliency from IBM & Celonis, today’s leaders are focused on building resilient workflows powered by artificial intelligence (AI) and automation. Using a modern toolkit of technologies, they are breaking down data silos, identifying insights, and removing hidden performance blockers.
Some 72% expect most of their processes and workflows to be automated in the next three to five years. 77% of supply chain leaders are finding and fixing inefficiencies by using process and task mining, which integrates data in real-time across multiple data models to render an “X-ray” of processes. With this information, teams can remove bottlenecks, deploy automation, and re-engineer key business processes.
Wonder Twins Power Activate
The realities of operating in an increasingly uncertain world highlight the urgent need for digital-first supply chain solutions for every industry. Kraft Heinz is creating digital twins for its 34 manufacturing facilities in North America. These digital replicas of each facility will serve as a testbed for new processes and solutions to be assessed before being implemented on the actual factory floor.
For instance, Kraft Heinz will use the digital twins to test ideas for reducing mechanical interruptions and other issues that hamper production. To help improve day-to-day operations, the company will create what it refers to as a “supply chain control tower” that will act as an air traffic control service to oversee a complex supply chain that stretches across more than 80 different food products.
New Math 1 + 1 = 3
In addition to reporting that RPA technology returned the broadest value across organizations (92%) in a Gartner survey of finance leaders, 80% agree finance must significantly accelerate its implementation of digital technology, such as RPA and artificial intelligence, to effectively support the business by 2025.
“Despite ongoing investment in RPA, CFOs are realizing they need a broader toolkit to realize their full automation objectives,” said Nisha Bhandare, VP analyst in the Gartner Finance practice. “To realize higher value from their RPA investments, CFOs are turning to a suite of complementary efficiency technologies, such as process mining, which will remain a future driver of growth for RPA in the coming years.”
R&R in 2022, Re-engineer & Re-deploy
Enterprise leaders have largely moved beyond thinking of IT as a cost center. Today IT is properly seen as an enabler that can create leaner operations, enhance existing business lines, and help deliver new ones. Spending needs to be strategic, and the business priorities reported in the “2022 State of CIO Report” balance the need to constantly pursue operational excellence while delivering transformational services, with the former supporting the latter.
The survey found increasing operational efficiency (46%) and transforming/automating business processes (41%) at the top of business imperatives driving the IT agenda this year. Those technology investments enable them to redeploy their scarce–and increasingly more costly–workers to higher-value tasks. Efficiency directives are fueling a shift in IT spending toward foundational business requirements to position organizations for an uncertain future.
Start Now, Think Big, Go Fast
As baseball legend, Yogi Berra observed, “the future ain’t what it used to be.” We live and work in an increasingly volatile, uncertain, complex, and ambiguous world. The post-Cold War U.S. military planners were correct, and the VUCA world is creating chaos with operations and supply chains today.
If you want to learn more about how intelligent automation helps deliver operational excellence and its value to the enterprise, be sure to check out this recent white paper on process-led, value-based, data-driven automation and transformation.
Have any questions or need more information? Contact our team