When you think automation, pallet changers, automatic tool changers, or robotic arms probably come to mind. Automation excels in repetition. Reducing those tasks frees employees to do more mentally demanding work, jobs that require complex, manual skills. Automation is a notable time-saver on the factory floor and has applications in the back office. Yet half of all manufacturing companies still use manual processes for monitoring changes, exceptions, and disruptions to their supply chain. That’s the finding of a whitepaper, “The Automation Imperative for Manufacturers & Distributors” prepared by document automation solutions provider Conexium and global management consulting and strategy advisory firm Zinnov .
“Reliance on manual processes is deeply entrenched across all functions, which adversely impacts the ability to deliver high-quality services and ensure profitability,” the report states. “From data entry to communications, document handling, and employee and customer management – all critical processes are managed by a maze of several interconnected and interdependent manual processes.”
One example – the manual sales order process – is prone to disruptions from customer requirements, manual handoffs, input errors, varying order channels (email, phone, online, etc.), inability to integrate with existing internal systems, and lack of visibility into the process end-to-end. Highlighting the extent of the inefficiencies, the report’s authors found 80% of the surveyed manufacturers’ sales orders were processed manually.
Forcing staff members to retype purchase order (PO) information into a sales database because the data can’t transfer easily to production or accounting software is too common – and such workarounds defeat efficiencies automation brings elsewhere in the enterprise.
Another bottleneck – manually processing invoices – forces accounts payable staff “to engage in a series of intricate steps: data capture, extraction, invoice authorization, data integration and transfer, reconciliation of accounts, invoice matching, and payment processing,” the report notes. The researchers found invoice processing inefficiencies result in 47% of supplier payments running late.
Since sales order and invoicing processes play a significant role in defining customer and supplier relations and experiences, they are top use cases that should be automated, the report’s authors say. Automating the sales-order process – collecting, sorting, verifying, keying in, archiving – can reduce costs 90%, they estimate.
Automation allows a PO to be digitized through templates, categorized by artificial intelligence (AI), and fed into an enterprise resource planning (ERP) program. The only manual step is a manager approving the order; the PO then generates a bill of materials (BOM), schedule, and accounting record, reducing those processing costs up to 80%.
Similarly, AI can classify invoices by predetermined categories (think medical procedure coding) to be processed 70% faster by the ERP at 80% lower cost.
The first and last steps of manufacturing have so far eluded widespread automation. It’s time manufacturers address these inefficiencies and automate the unautomated. – Eric