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Supply Chain Automation: Full 2024 Guide

Supply Chain Automation: Full 2024 Guide

In the fast-paced world of construction, efficiency and agility are keys to success.

Supply chain automation offers a solution to these traditional management approaches. By leveraging technology to optimize supply chain tasks typically handled manually, supply chain automation can help streamline procurement, optimize inventory management and improve logistics operations.

Below, we’ll uncover what supply chain management is, explore its benefits and show how it can empower businesses to stay ahead in a competitive and constantly evolving landscape.

What Is Supply Chain Automation? 

Supply chain automation uses technology to improve efficiency and reduce the costs of supply chain operations. Supply chain automation can take many forms, such as:

  • Artificial Intelligence in construction to automate physical tasks in the warehouse, like inventory counting, picking and packing, to reduce manual labor and improve accuracy.
  • Internet of Things(IoT) devices to monitor and track inventory levels, equipment usage and environmental conditions in real time, improving decision-making and resource efficiency.
  • Robotic Process Automation (RPA) to automate repetitive tasks like order processing, invoice generation and data entry, freeing up human resources for other tasks.
  • Machine Learning (ML) algorithms to analyze data patterns, predict demand, optimize inventory levels and identify opportunities for process improvement to better utilize resources and save costs.
  • Digital Process Automation (DPA) solutions to streamline end-to-end processes, like order-to-cash or procure-to-pay, by digitizing workflows that can reduce cycle times and improve accuracy.

For example, AI-powered robots can autonomously navigate warehouses, retrieve items and fulfill orders, reducing picking times and minimizing errors in fulfillment operations. IoT sensors can monitor temperature and humidity levels in storage facilities, ensuring optimal conditions for perishable goods. Automated supply chain technologies can work together to create a more agile and responsive supply chain system.

An illustrated iPad accompanies the definition for supply chain automation.

Challenges in Traditional Supply Chains

In a traditional supply chain, manual processes, limited visibility and disjointed workflows abound. These are some of the main culprits that contribute to delays, errors and overall suboptimal utilization of resources and labor. They can impact all parts of the supply chain, including:

  • Inventory Management: Lack of real-time visibility into inventory levels and location can cause inaccurate inventory counts, resulting in stockouts in needed equipment or supplies. Managing inventory across multiple project sites also poses a challenge when manual traffic methods become inefficient or prone to errors.
  • Demand Forecasting: Reliance on outdated forecasting methods is a common issue in traditional supply chains. The inability to properly predict demand fluctuations, stock inventory or get inventory in time hinders project and production schedules. This ultimately stalls business operations and, in turn, profitability.
  • Supplier Management: Limited communication with suppliers can lead to misunderstandings and procurement delays. Difficulties tracking and managing supplier performance can also pose challenges, resulting in repeated issues with timely deliveries and material quality.
  • Documentation of Processes: Manual documentation processes often lead to errors and delays in operations. Without a standardized process, it’s difficult to maintain consistency and accuracy across every project. Accessing critical documents when needed can also be difficult, further stalling productivity.

The construction industry also faces supply chain disruptors like unpredictable weather, fluctuating material costs, and labor shortages, all of which exacerbate the challenges of traditional supply chain management.

6 Supply Chain Technology Examples 

From advanced analytics to emerging technologies like blockchain and IoT, a vast array of automation tools are available to drive value in all parts of the supply chain. Below are some examples of different automation technologies and their applications across supply chain operations in the construction industry.

Six illustrations accompany six examples of types of supply chain automation technology.

1. IoT Sensors

Equipment downtime can significantly impact project timelines and costs, and IoT sensors offer a powerful solution for equipment monitoring. These devices can be placed on cranes, bulldozers and excavators to monitor their performance, usage patterns and maintenance needs in real time.

IoT sensors can also analyze historical data and identify patterns that could indicate expected equipment failures before they occur. This function allows teams to minimize unplanned downtime, extend the lifespan of their equipment and optimize maintenance schedules.

Used For: Equipment monitoring

2. AI-driven Analytics 

Accurate demand forecasting is crucial for planning each phase of construction projects and resource allocation. AI-driven analytics uses machine learning algorithms to analyze large amounts of data and uncover trends that manual forecasting methods alone might miss.

By leveraging historical sales data, market trends, weather patterns and other important factors, AI can quickly generate more accurate demand forecasts. In turn, construction teams can more readily anticipate changes in demand for materials, equipment and labor and pivot when needed.

Used For: Demand forecasting

3. Robotic Process Automation (RPA)

Documentation processing is a traditionally labor-intensive task involving a myriad of paperwork, from contracts and permits to invoices and compliance documents. Robotic process automation (RPA) offers the ability to automate repetitive and rule-based document processing tasks — allowing teams to focus on other parts of the business while also reducing errors.

RPA can automate important project documentation like progress reports, change orders and safety inspection reports. RPA bots can extract data from various sources like project management software, emails and scanned documents, and then populate required information into a single template. Overall, RPA is a powerful automation tool that removes the need for manual data entry and frees up valuable human resources for higher-value tasks.

Used For: Documentation processing

4. Blockchain

In construction, compliance with regulatory requirements is a key part of project success. Blockchain technology can help improve the likelihood of compliance and overall project safety by providing transparent and tamper-proof records for maintaining and verifying compliance data.

For example, in construction project management, blockchain can help create a digital record of regulatory compliance certificates, permits, inspections and audits. Each compliance-related document can be securely stored on the blockchain, along with other relevant data such as timestamps and digital signatures, ensuring data integrity and authenticity.

Used For: Compliance with regulations

5. Radio Frequency Identification (RFID) Technology

While IoT sensors can be attached to equipment to monitor performance and automate maintenance, RFID tags can be attached to materials, equipment and tools to track their location and status throughout the supply chain, from the warehouse to the job site.

For example, RFID tags can be attached to equipment like steel beams, concrete blocks or power tools. RFID readers can remotely scan them, providing real-time tracking of inventory movements and locations.

Used For: Inventory management

6. Autonomous Vehicles

Autonomous vehicles like drones and unmanned forklifts can streamline the equipment rental process in the construction supply chain. For example, a company that rents equipment can take advantage of autonomous vehicles that transport the rented equipment to and from job sites, reducing the need for manual transportation methods.

By moving rented equipment on-demand, autonomous vehicles help ensure each piece gets used to its fullest while minimizing downtime or idle time.

Used For: Equipment rental and logistics

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Top Benefits of an Automated Supply Chain

From increased efficiency and productivity to cost savings, automating the supply chain brings a host of benefits. Here are some of the top benefits of implementing automation tools:

  • Improved Equipment Utilization: Automation makes it easy to schedule and deploy construction equipment on demand, ensuring maximum utilization rates and minimizing downtime that can result in project delays and missed deadlines.
  • Cost Savings: By reducing manual labor and minimizing errors, automation helps save costs in areas such as labor, equipment maintenance and material procurement.
  • Streamlined Inventory Management: Automated inventory tracking and replenishment processes ensure accurate inventory levels, reducing stockouts and overstocking of materials on construction sites.
  • Improved Collaboration: Automation helps facilitate collaboration across project stakeholders, like subcontractors, warehouse teams and suppliers, by providing a centralized platform for communication, project updates and document storage and sharing.

An illustrated construction machine next to an iPad accompanies a list of four benefits of supply chain automation.

Embracing Efficiency Through Automation

Supply chain automation is becoming a transformative force in the construction industry and beyond, offering unique opportunities for efficiency, agility and competitiveness. By embracing automation technologies like AI, IoT and RPA augmented reality, companies can better streamline processes, utilize resources and improve collaboration across the supply chain ecosystem.

As you position your business for success, contact BigRentz for your equipment rental needs.

An illustrated construction truck accompanies a call-to-action to rent equipment from BigRentz.

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