The Business Risk of not Automating in the Supply Chain

Everyone understands that automation can improve operational efficiency and benefit an organization. However, not making the decision to automate does yield a non-negligible risk outside of the benefit not reaped.

In this podcast, Yacine Mahdid and Hamad Anwar will dive into these business risks to better illustrate the full context of automation in the supply chain and will discuss the following points:

• The current market sentiment of automation in the supply chain.

• What part of procurement or supply chain should you automate (and which you shouldn’t)?

• How does redundant operational work affect churn in procurement?

• Biggest risks of not automating?

• What function in your supply chain should you automate asap?

• Why is ERP not solving all my automation needs?

• How to find the right technological tool as an individual contributor?

Business Risk and Solutions:

• Everything that is mind-numbing and repetitive should be automated asap. This can have a direct impact on the well-being of your employees. Use technological tools or process change to refactor how that part of the work is done.

• Figure out where errors can happen in your supply chain flow and introduce automation to reduce them. Do some light quantitative analysis on how much each of these errors costs using historical data if possible.

• Data collection when not automated can be a major source of risks as humans will make errors in getting the data into the system.

• Automate the flow of work from your ERP to outside organizations asap. The data is most likely not collected and the follow-ups are hard to do for your people.

• Everything that requires an approval process should be automated.

• Watch out for finding one solution that does it all like an ERP system. They have their use case, but it’s unreasonable to expect you will solve all employee’s problems with one software.

• As an individual contributor, do an inventory of where your time is spent and look at what you are currently not doing. This will help you make a business case about why you should be investing in technological tooling.

• Make sure that you connect your tools to your central systems.

• Ensure you have good analytical and data tooling to quantify the ROI of your automation investments.

Out-of-context quotes:

> I think in supply chain and procurement particularly we will see more and more trends toward automation in the near future.

> When a digital transformation project crumbles, it is usually when people try to do too much at the same time.

> One part that you shouldn’t automate is higher-level order decisions, these should act as a gate in your automation flow.

> I could feel her [purchasing professional] tenseness and stress. She was saying “I’m currently at more than 40h to get this thing [purchasing operations] rolling you know?”.

> No one likes that. No one in existence likes these sorts of redundant tasks. There needs to be some sort of creativity or decision you get to do to have some sort of agency in your work.

> The follow-ups shouldn’t exist. “Don’t get me started about follow-ups”. Like, Facebook solved this already. Whenever you send a message you know if the other person saw it. In procurement, however, you have to constantly ping people to check if they received your email.

> To make good procurement software everyone in the system [manager, procurement professional, and suppliers] needs to find delightfulness in using the software. Because if you have one set of “users” that don’t want to use the software, you don’t have good procurement software.

See you in the next podcast! 👋

Yacine Mahdid