Accurate forecasting, or at least as near to accurate as you can get, creates efficiency and cost savings. By having accurate demand forecasts, you can plan inventory with a minimum of overstock, production, and shipping with short lead times along with the ability to respond to variability more quickly.
Unfortunately, some will equate the word ‘automation’ with ‘people replacement’ and shun some changes that are seen as replacing tasks that humans currently do, in the interest of job security. The reality is that humans are the crux of any system, and the automated processes serve to improve their efficiency, not replace their abilities!
All of us at DemandCaster subscribe to the belief that people provide the insight, understanding, comprehension and discernment that are critical to an effective planning process.
Why are automated processes effective?
In supply chain planning, automated processes help employees to cut through the noise. There is a lot of data that comes with automated system integration, data that might not have been visible in the past from a spreadsheet-based system, but is now front and center! In order to cut through to what is relevant at any given time in the supply chain process, users need to know when there is a trend or a change that is of note and that requires action. By automating processes, when they are running smoothly, they will proceed; only the exceptions should be notable for the user.
This saves time and effort working through processes that don’t need intervention and keeping the user’s time for exceptions that do require their attention, to say nothing of innovation and ongoing increases in efficiency.
There is also the fact that non-automated but repetitive processes leave themselves open to error. Every error is, ultimately, costly whether in time wasted, orders badly produced or unhappy customers. By automating routine processes, less errors are likely, which will contribute to the overall efficiency of any supply chain.
Overall inventory management is improved over manual management when processes are automated, at the supply of resources end of the chain, right through to production and inventory that is ready to ship. When production resources are low, and demand forecasts are showing an increase, the process of obtaining refreshed supply inventory can be automated so as to be more timely. This avoids problems like excess ordering and the concomitant ordering and storage costs that go with it.
“Data will provide predictive analysis as to when inventory will be needed of final products, even going so far as using historical data to analyze seasonal changes.” (Source)
With centralized access to cloud-based data, users can get a status in real time but they avoid the onerous process of manually inputting information into spreadsheets. Instead, they can leverage the data, from the inventory manager who needs to forecast supplies for the next quarter to the CFO who needs to plan for growth capacity in the next three quarters. The automation of processes allows all users to redirect their attention to minimizing exceptions and growth opportunities, rather than living with the status quo.
