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Build a Resilient Supply Chain with Autonomy
As seen with the pandemic, supply chain disruptions can be unpredictable. In this article, we explore the three ways that autonomous technology can increase efficiency, help organizations remain competitive, and protect against current and future supply chain pressures.
The COVID-19 pandemic has led to a shift in the supply chain as companies were forced to face the unpredictable nature of our world. Consumer behaviors, workflow processes, and even the ability to socially interact, changed. With this, the production of goods and services drastically slowed as a result of clogged ports, labor shortages, spikes in demand, material shortages, and much more. In the second quarter of 2020 alone, US manufacturing production reduced by 20.2%. These disruptions accelerated the need for businesses to innovate and build a more resilient supply chain.
However, the urgency to strengthen access to mission-critical resources goes beyond the effects of the pandemic. In fact, supply chain disruptions are a common part of doing business. According to McKinsey & Company, companies can now expect that supply chain disruptions lasting more than a month will happen every 3.7 years. Additionally, a single prolonged shock to production can cause a drastic hit to a company’s profitability, lowering profits by 30 to 50%.
Today, not only do pandemic disruptions remain, but also businesses are operating in a time where supply chain shocks are common occurrences due to frequent changes in the environment and our global economy.
Phoenix Logistics, a supplier of engineering, IT, manufacturing, and logistics services, accurately summarizes the solution to resiliency in one word: more. This includes more technology, more flexibility, more agility, more visibility and insight, and more communication.
Among the many innovations that add supply chain resiliency, autonomous vehicle technology is one of those that make it easier for organizations to get way more. Implementing AMRs will help companies create more efficient operations. By fostering greater efficiency, your organization can better manage the unpredictable supply chain complexities of our modern world. Let’s explore how.
More Flexibility & Agility
Automated Guided Vehicles (AGVs) have traditionally been used as an automation solution to help businesses maintain a strong supply chain. AGVs help increase production by handling repetitive tasks and expanding supply chain capacity.
But in warehouses whose layouts keep changing to respond to demand fluctuations, AGVs lack adaptability. Simply put, it’s not easy to reroute an AGV. They do, after all, run in a fixed loop like a train, and changing that route can be capital intensive.
For instance, if a warehouse wanted to alter an AGV delivery task that used magnetic wire navigation, they would need to rip out and re-route the wires on the floor. These changes to its routes are capital intensive and disruptive, negatively affecting an organization’s operational efficiency.
READ MORE: WHAT ARE THE DIFFERENCE BETWEEN AGVs, AS/RS, and AMRs?
By contrast, autonomous vehicles can intelligently navigate or re-route to respond to both permanent and temporary changes to the operational design domains in which they operate.
Autonomous industrial vehicles offer a more intelligent solution that provides businesses with added flexibility and, in turn, agility. In the previous example, autonomous vehicles do not need to adhere to the fixed infrastructure of magnetic tape but instead, they can dynamically move in their given environment. This means that organizations can easily and quickly make alterations in real-time.
It’s not just shifting layouts or routes that autonomous vehicles can do easily — if a fulfillment workflow needed to add an additional step, for example, AVs can adapt seamlessly. In turn, an organization will receive more value while also spending less money on changes.
This flexibility is particularly powerful when a company faces disruptions in its supply chain. Consider a warehouse that has an efficient system for manufacturing its automobiles where materials flow from stops A-B-C. However, the warehouse experiences a delayed shipment of the inventory required at stop B. Using AGVs, the entire route would have to come to a stop.
In comparison, with autonomous vehicles, the warehouse can easily improve their supply chain responsiveness by re-routing their workflow. Step B could be moved to the end of the A-B-C workflow, essentially saved for when the inventory is finally delivered at a later time. This would allow the warehouse’s operations to continue on without being blocked by a temporary delay in supply.
At Cyngn, we customize autonomous vehicle deployments to the particular needs and specifications of a given business. These may be basic routes that go in a loop or complex routes where employees can send the vehicle to any number of stations.
A component of this technology is our Fleet Management System, where users can specifically plan a saved mission or create a new mission for the vehicles at their work site. This means that if disruptions to the supply chain occur, such as a material delay in the example above, changes to the vehicle’s mission can be easily made and operations can continue to run.
Not only does autonomy foster resilience through greater flexibility, but when paired with analytics, it also results in greater visibility. An Accenture report found that of the top supply chain companies, those with greater visibility were more resilient. As a result, past disruptions had no impact on their profitability.
By deploying autonomous vehicles, businesses will tap into a wealth of data that helps them achieve a deeper, real-time insight into their operations. Organizations can use these analytics to recognize areas of development and make informed decisions when disruptions occur. This is key to optimizing your operations and getting goods to your customers faster.
Autonomous vehicles specifically capture their given environment and use intelligent sensors to detect their surroundings. The data that they take in can be used to monitor picking accuracy, warehouse productivity, throughput, inventory, and more. If an organization uses forklifts to carry goods, then they can optimize their processes by using Cyngn’s analytics to observe any flaws in driving behavior, route patterns, or picking errors.
For instance, a facility may notice that there are unnecessary steps in travel time in their pick-and-pack process that are creating inefficiencies over time. By identifying this, the business can improve their routes to increase throughput and the number of products per hour that are getting to customers.
Here, our analytics suite is called Cyngn Insight. In addition to managing and monitoring your autonomous vehicle fleet, the platform aggregates data to extract business insights and give you information about the system’s status, vehicle telemetry, performance metrics, etc.
Moreover, not only does Cyngn Insight deliver primary data about how often you are delivering the given product or the material that you’re trying to deliver, but it also produces secondary insights. This includes data about the patterns that may be emerging at your facility, which helps you to make operational and efficiency gains. As explained by McKinsey, this visibility enables organizations to “connect the entire value chain with a seamless flow of data”.
By providing the data needed to optimize your operations, autonomous vehicles can also help predict supply chain issues.
To understand this, we can go back to the previous warehouse example where goods moved from A-B-C. Here, the organization can utilize the data collected from their AVs to detect that their workflow has become less efficient at stop B. Upon further investigation, they find that it’s because they are still waiting for the material to arrive at their warehouse.
By recognizing this slow-down, they can detect that their supplies are starting to be delivered at a slower and less regular rate. Even if it hasn’t created a crisis yet, AVs can help an organization see fluctuations in supply early on, allowing them to proactively respond.
In fact, companies with advanced analytics capabilities during the pandemic found it easier to understand the changing operational realities and generate useful insights to plan for short-term and long-term crisis responses. For instance, at the start of the pandemic, Nike used predictive analytics to understand patterns and reduce production early on. This minimized the impact on their operations and they had a smaller drop in sales than other competitors.
Greater visibility within the supply chain will also help companies gain an advantage against their competitors. In fact, MHI’s 2020 Annual Industry Report survey found that 67% of respondents believe that automation has the potential to create a competitive advantage.
In addition, autonomous vehicle technology can help businesses that are Tier 2 suppliers better communicate with their customers about their output using real-time data. Commonly, visibility into a supply chain stops at direct Tier-1 suppliers, and organizations know very little about their entire supply chain. This results in a lack of knowledge about disruptions that may be occurring to the suppliers that supply to your Tier 1. As seen with the pandemic, in order to foster resilience, companies must have optimal supplier collaboration.
For example, a Tier 2 supplier can use Cyngn Insight to collect data that will help them better and automatically communicate with their buyers about their output. If there is a delay in Tier 2 of rubber, for instance, it will be communicated to their buyers down the supply chain. This allows these companies to better predict and plan for their supplies, creating necessary end-to-end supply chain visibility.
“Accurate stock and location data can make the difference between winning and losing a customer”, says GS1 US, an organization facilitating collaboration to improve supply chain visibility. The more information that companies across the supply chain receive, the easier it is for them to recognize demand fluctuations, get their products to customers faster, and avoid any unseen disruptions.
As seen by the impacts of the pandemic, the ability of an organization to adapt is more important than ever. Implementing autonomous solutions allow businesses to build the supply chain resilience required to quickly and effectively react to any change that comes their way.