Technology and Supply Chain Management

Technology and Supply Chain Management

One of the biggest leaps for Supply Chain Management (SCM) before the term Supply Chain was even invented started in 1913 when Henry Ford installed the first moving assembly line for the mass production of the automobile Ford Model T. This invention reduced the time it took to build an automobile from 12 hours to approximately two hours and 30 minutes. In 1914, he added a mechanized belt that chugged along at a speed of six feet per minute later called the conveyer belt according to History.com (2009). The conveyer belt was also then applied to various other industries to meet the demand to an ever-growing consumer base. Fast –forward about 80 years, companies wanted to save money on personnel that worked the assembly lines in these various industries as well as revamp the conveyer process by introducing Logistic Robots. These robots do not require health benefits, sick days, insurance, and their margin of error is extremely low. It only took a short amount of time for Supply Chain operations to change. Robotics and various other technological advances can be attributed to faster production, requisitions, and quality control. With these technological advances also comes some draw backs such as space required, power consumption, and quality control for example.

In reference to manufacturing, some of the companies’ challenges include information gaps between production and the various manufacturing shops. According to Mika Liukkonen (2012), “Radio frequency identification (RFID) is an automatic object identification and data collection technology based on radio waves. A large part of the current RFID applications in manufacturing have been driven by external mandates, for example from the American multinational retailer corporation Wal-Mart, which first announced plans for an extensive supplier requirement to tag pallets and cases of products with the electronic product code (EPC) form of RFID in 2003. As a result, the most general response to this demand has been simply the attachment of tags to finished goods just before shipment to ensure the trace- ability of products in the supply chain. Later on, it seems that a growing number of companies have begun to use RFID for the so-called in-house applications, as they have realized the potential of the technology that can make individual objects ‘visible’ to the information systems and have therefore begun to use it to trace products, pallets, materials, tools and even employers to control quality, or even to automate process control”. With the invention and application of the RFID, you can better track inventory levels and greater visibility of the Supply Chain however, to apply this technology cost a lot of time and money for Wal-Mart. It would also require more personnel to be trained to implement the technology as well as develop a system that caters to the way Wal-Mart wanted to do business. One can argue that the cost justifies the means and it saved money in the long run by reducing surplus. To put things in perspective, RFID can be used to track raw commodities to the manufactures as well as supply data on quantity, time of delivery, and the location of whatever mode of transportation was used. This technology can also be used to track production times, which part of the assembly process a particular asset is in, and be used to flag an asset that may have failed quality assurance tests. RFID technology is a definite game changer in the sense of cradle to grave logistic management.

To further automate production, companies have looking into robotics to better streamline the process and potential cut down on manpower. Mark Parsons, the Chief Customer Officer of the DHL Supply Chain (2017) says, “There have been a number of technological barriers which have resulted in the slow uptake of automation in the supply chain. Until recently, robots had been stationary, blind, and relatively unintelligent, lacking the complexity and agility that the logistics industry requires. However, next-generation robots are very different – they are lighter, more flexible, easier to program, and more affordable due to swift progress in grip and sensor technologies. Combined with the advent of micro-technology and the ability to create compact and collaborative robots, we are finally starting to see automation becoming a reality in the supply chain. Despite the previously slow uptake, the benefits of robotics and automation technologies are well understood, with their ability to support zero-defect logistics processes and enable new levels of productivity. The new generation of collaborative robots and automated solutions with significantly improved performance and enhanced sensing capabilities, offers a genuine alternative to manual handling”. Many tasks that are important to supply chains are simple and monotonous. Moving assets from one area of a warehouse to another is something an automated robot or mode of transportation can handle. I had the opportunity to visit an Amazon warehouse and saw how they automated a lot of those processes. They bought a company called Kiva systems for about $800 Million and implemented their technology as well as the use of RFID. These robots are capable of moving a lot of property across a warehouse without any direct commands from warehouse personnel. Although the costs to buy the company and implement the technology was high, I think it was cost effective in the sense it replaced 3 8-hour shifts of manpower and all of the benefits and mistakes of human error that came with it.

Supply Chain Management is driven by the demand of the consumer but if the company is not known, how will they have the demand for their product? Utilizing social media to market is an excellent way of driving demand and sales to a company. Flashglobal.com (2017) states, “Social media is a popular technology that has swept the world. With over 288 million Twitter users and 1.23 billion Facebook users, it’s no wonder many businesses are turning to social media to gain visibility for their company. In fact, over 70 percent of all Fortune 500 companies rely on social media as part of their marketing strategy and supply chain management. Through the use of social media, you can create more