MHI Solutions Improving Supply Chain Performance
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When companies introduce new automation and digital technology into their supply chains, they anticipate it will provide benefits like lower costs and increased production. But they’re also concerned about the potential for business disruption during transition. Will they be able to get their products out the door on time? Can key staff members support both new tech implementation and current operations? What happens to their supply chain if the tech deployment is delayed?
“After a project has been funded and a software or hardware technology has been selected to be implemented into operations, everyone is on the same page that this is going to make things better. But the problem is knowing that when you pull the trigger, it is going to hurt. Whether it hurts your efficiency levels or direct sales and revenues, it is going to constrain your network and your operations in some way. So mitigating these obstacles is the challenge at hand,” said Brock Oswald of Deloitte Consulting.
“Companies who are new to automation sometimes struggle with the impact that it is going to have on their organization, so being ready for that impact is crucially important,” added Colman Roche, VP of e-commerce/retail at MHI member Swisslog.
Create a master plan
Extensive, early planning is the best way for a company to ensure it will be able to continue its usual operations as it incorporates new technology. Long before a contract is signed, the planning team should consider how every aspect of the business will be affected, then develop a budget and a schedule that takes those impacts into account.
“Putting automation in a building is like throwing a rock in a pond; there are ripple effects, from your receiving process out to your shipping process,” said Bryan Jensen, chairperson and executive vice president of MHI member St. Onge Company.
A new automated system that increases picking from 100 to 300 lines per hour, for example, could overwhelm the packing system and disrupt those operations if the company hasn’t determined how to handle that larger volume.
Identify key people
To maintain continuity in customer service during tech transitions, companies should identify key people in their organization who have both the capability and the availability to take on the project. Roche noted that the most capable people are often in high demand, and adding another project to their schedule could lead to burnout.
Implementation teams need members with both strategic and tactical knowledge. One of the biggest mistakes that companies make is not involving the people who will be most affected by the technology change. Jensen has seen cases where a company decides at the top levels that it is going to introduce some technology that will impact distribution centers but never involves any managers or employees who work in the division in the planning.
Engineering, IT and operations personnel should be involved from the very start of the project, even before supplier selection, advised Will Mansard, director of systems sales at MHI member Bastian Solutions.
When companies bring those people in after the contract signing, they quickly discover operational requirements that were not considered in the initial planning. That can result in extended schedules, added costs and unanticipated disruptions to business flow.
For large projects, companies could consider bringing in a technology consultant or creating a new internal IT/operations/engineering team whose only job is to focus on system design and implementation.
Be watchful of the bleeding edge
Companies that want to minimize business interruptions should be cautious with unproven technology and should attempt to learn from others who have implemented the automation solution being considered
“They should ask the supplier to put them in touch with customers who have implemented a similar type of technology. Talk to them about lessons learned and their ramp up experience. That will give companies a much more realistic picture of not only the technology that is coming in but also of what the changeover itself is going to look like and what problems they might run into as they are making that change,” said Mansard.
Get employees on board
Employees’ attitudes can make a big difference in maintaining operations during a tech transition.
Jensen suggests that companies invite people who work on the floor and who are respected by their peers to assist in the design and implementation of the new process. That helps spread grassroots enthusiasm for the technology.
Even employees who find fault with everything can be helpful. “You may want to talk to them one-on-one to find out if you are missing something, because they will be the biggest critics of what you are doing. That can be useful as part of the thorough vetting of the system,” Jensen. But they should not be included in the planning group, because their negativity could disrupt its dynamics.
Employees who hear about the new technology may have concerns about losing their jobs or its impacts on their day-to-day work. This uncertainty can have a negative impact on their current productivity and on their willingness to learn the new tech. Companies can alleviate their concerns by communicating with them honestly and often about the tech’s impact.
Training is another essential. Mansard said companies need a comprehensive training program that covers everything from working with the new software and interacting with the control system to maintaining it. Working hands-on with the provider’s employees during this training period is very important, perhaps even more important than classroom training.
“If you don’t have good training, you might, for a couple of months after implementation, have worse customer service than you did before, until employees get the hang of the new technology,” said Jensen.