Automation & AI: Driving Future Supply Chains

Overview

This white paper traces the evolution of automation from the Industrial Revolution to the present day, highlighting its transformative impact on the supply chain and logistics industry. It explores how advanced technologies such as AI and autonomous mobile robots (AMRs) are revolutionizing traditional supply chain processes, leading to greater flexibility, efficiency, and business growth.

It examines the critical shift from fixed infrastructure automation to agile, interconnected systems, and how that shift is helping businesses adapt to changing market demands. By investing in intelligent automation, companies can unlock new opportunities for innovation, better customer experiences, and long-term success.

Discover how leading organizations are using these advancements to stay ahead of the curve and drive future supply chains.

Download The White Paper

Supply Chain and Logistics: Change Your Technology Investment Strategy

The concept of automation has an interesting history:

1. Industrial Revolution: Manufacturers begin to mechanize workflows and processes, which continues through the late 19th and early 20th centuries.
2. Early 1980s: The concept of supply chain is born, incorporating decades-old automation practices into a formalized discipline.
3. Late 1980s to early 1990s: The rise of the personal computer (PC) coincides with the proliferation of supply chain software and hardware solutions, including planning, warehouse management systems (WMS), and transportation management systems (TMS).
4. Today: The previous era’s large, fixed infrastructure automation of conveyor, sortation, and pick-to-light systems, which require heavy capital commitments, is giving way to more agile and nimble hardware, like autonomous mobile robots (AMRs).

Since its inception, automation’s primary aim has always been to eliminate manual work and improve operational efficiency. But only within the last decade has the supply chain industry been able to invest in advanced technologies that allow more automation, both physically and process-wise.

Previous investments were long-term bets on a single, efficient, productive way to run a business for a decade. Businesses can no longer count on that. Instead, the supply chain industry needs to invest in an idea: change and flexibility.

Traditional automation infrastructure and investment make less sense when businesses must change how they work. The industry is experiencing a confluence of advanced hardware and software, artificial intelligence (AI), and interoperability, meaning more connected, less siloed systems.

How can this create value? Imagine automation powered by AI that orchestrates additional automation. Businesses reap the rewards of creativity, flexibility, and efficiency today, and can also adjust for tomorrow’s needs.

“If there’s anything we’ve learned as an industry, it’s that change is what we can count on. If that’s what we know is coming, then what we have to invest in is this idea of flexibility, more so than pure efficiency of a particular process for the next five or 10 years.”

Josh Owen, CEO & Co-founder, Cycle Labs

Invest in Automation as a Time-Saver, and Change Supply Chains for the Better

Everything individuals and businesses do boils down to saving time, the most valuable resource. Automation is a byproduct of that action.

Automation offers predictability and comfort, which matter even more in a rapidly changing world. It lets people shift their focus to what they feel is more important and gives them different freedoms and more time: to innovate, build businesses, or even just leave work on time. And it’s getting smarter and more flexible.

This automation wave is about industry leaders embracing the supply chain as an asset for business growth. To do that, they need to know what to invest in to support growth objectives, which is where automation really comes alive. Efficiency in automation lets businesses grow and produce more with less.

Once seen as a necessary evil, supply chains are no longer just a necessity but also an opportunity. Better customer experiences translate into increased market share. And the supply chain industry is one driven by the need to leave an indelible mark on the world.

The Goal Is Not Efficiency or Productivity

There are four key domains the supply chain industry always wants to make more efficient:

1. Inventory: the correct amount based on forecasted demand
2. Space: storage, warehousing, and where to store items based on what criteria
3. Labor: task and resource prioritization
4. Transportation assets: trucks and containers

AI can help with all four through precise predictions, algorithms, and optimization.

The Means Are Not the Ends: Know the Real Goal

1. Efficiency is measured by how well companies use their resources to complete tasks.
2. Productivity is the amount of work companies get done in a given length of time.

When a company says it’s striving for efficiency and productivity, it means it wants to do more, cheaper and quicker. But these are not the goals. They’re means to the outcomes businesses actually want to achieve. Instead of treating efficiency and productivity as the goals, businesses should use them to achieve the outcomes they really want.

A Dynamic New Paradigm: Automation Plus Intelligence

Efficiency and productivity used to be firmly proximity-based. A WMS and people could assign tasks to machines and humans that were physically close to them.

When intelligence enters the picture, so do opportunities to increase business value. Take two tasks: one that’s close, and one that’s a further walk. A traditional WMS would assign the close task on the basis of efficiency, at face value, because of proximity. But what if the task that’s a further walk away provides a better business outcome?

Companies can overlay traditional efficiency and productivity strategies with intelligence and strive for real outcomes over placeholder goals like “more efficiency and productivity.”

Sometimes, striving for more accurate forecasts with what you already have matters more than outright replacing hardware or software in the name of efficiency or productivity. While the gains may not show up immediately, efficiency gains can be much higher when companies apply intelligence within automation frameworks.

The current wave of physical and software-based automation driving this paradigm shift wasn’t possible with the fixed infrastructure automation of old. But companies can now use flexible automation to pursue the outcomes they really want, and even change those outcomes for the better.

Workforce Impacts: Firefighting Versus Fixing the Future

Automation affects workforces worldwide, and it’s not always obvious whether the impacts are positive or negative.

While traditional automation still has its place in many businesses around the globe, it’s not enough. Companies that don’t want to fall behind need to up their game.

Right now, there are two broad schools of thought on automation in the workplace:

1. Traditional: Robotic process automation (RPA), data extraction and validation, automated report publication, generating replenishments, and securing approvals. These processes and workflows are predictable and repeatable, the low-hanging fruit of automation. Businesses are, and should always be, working to remove inefficiencies and direct their most capable knowledge workers toward complex problems that automation can solve.
2. Dynamic: Focus on quadrant two, meaning non-urgent but important tasks and business objectives. The supply chain industry is usually full of firefighters who have no time to plan long term, but time-saving automation gives workers the space to realize critical business goals, usually sidelined for when there’s “more time,” a placeholder that time- and resource-stretched companies know never really arrives.

Imagine being able to direct knowledge workers, or take skilled workers off the floor and out of tactical firefighting mode, toward quadrant two objectives:

1. Every company wants to get to these critical tasks but has no time.
2. Leveraging intelligence and automation lets businesses move forward and achieve more high-value objectives.
3. Rather than reacting to perpetual quadrant one crises, workforces empowered by automation can deliver their best.
4. When people are given the space to think creatively, they’re also more productive and efficient.

It all goes back to the idea of time. Successful businesses create predictability with automation, giving time back to customers, who can in turn move their own businesses forward. Everybody wins.

Customers: The Great Supply Chain Challenge

Beyond workforce challenges and opportunities, there’s another people-centric focus businesses need in order to reach and improve their outcomes. Customer expectations are clearly rising throughout the supply chain in both B2B and B2C spaces. How can companies stay ahead of demand?

The mystery of supply chains uncovered

As late as 10 years ago, most people didn’t know supply chains existed. They still mainly shopped at brick-and-mortar stores. Supply chain professionals aside, the industry workflow was like black magic for customers ordering goods and services online. A few days later, never at a specific time and date, orders spontaneously showed up at their houses. The process was opaque and mysterious.

Supply chains are different today. When someone orders something online, which is more common than shopping “offline,” they often know:

1. When companies pick orders within warehouses
2. When they generate shipping labels
3. When carriers pick up orders
4. Exactly where their order is at each stage of the process
5. Within a few-hour timeframe, when their order will arrive at the chosen delivery location

What’s changed? Supply chains are now much more customer-facing.

The treadmill of consumer expectations

There’s a home truth about humans: if given an inch, they’ll take a mile. If companies give consumers something, consumers typically want more. Take Wi-Fi on airplanes: enchanting when first introduced, but a broken spell just a week later, as passengers grew frustrated that it wasn’t working perfectly. Humans always want more, and always want better.

Businesses can finally increase the quality of their supply chains with the current automation wave and paradigm shift. But how will they bring this new power to bear?

It’s tempting to celebrate the power of reverse logistics when customers want to return goods, say a pair of pants that isn’t the right size or fit, or simply isn’t on trend. Businesses selling online typically ship free return labels with goods to make returns as convenient as possible for customers. But what if the business could:

1. Analyze trends and timelines in depth?
2. Predict customer behavior before they purchase?
3. Advise customers on what they should purchase?

However intrusive this practice might seem, the method is clearly powerful. If there are insights companies can give their customers in advance, it may be good business practice to share them. And how long before what we see as invasive becomes something customers ultimately crave?

The Future of Supply Chain Technology

There’s another reality about humans in markets: the last thing we want is to feel like we’re interacting with robots. Even when it is a robot, as with a chatbot, businesses want to make conversations feel as natural and human as possible.

Thanks to the development of large language models (LLMs) and application programming interfaces (APIs), the future of the supply chain industry is ripe with possibility:

1. General LLMs like ChatGPT are already competent at a range of tasks.
2. LLMs and APIs built for specific purposes help businesses envision a world where AI is like a coworker.

In light of such developments, how will HR departments and recruiters begin to build AI-driven teams?

The new technological investment wave in the supply chain industry won’t be about how exciting a new technology is, but about how businesses can reimagine and reinvent themselves through the lens of digitalization and generative AI.

Forty percent of supply chain organizations are already investing in generative AI, whether for image or text production in reports or for knowledge management applications. Traditional rules-based systems and optimization engines built on static algorithms are giving way to flexibility. Now is the time for businesses to focus on achieving outcomes.

There’s no way to know what the world will look like in a few decades. The best thing businesses can do is embrace the change and opportunities technology provides, and keep learning, growing, and succeeding.

Efficiency isn’t the goal. It just helps you get there. Embrace change-focused automation with Cycle Labs.

Contact: cyclelabs.io | +1 (866) 305-3151 | info@cyclelabs.io