Logistics and Supply Chain Challenges in Industrial Automation Industries

Romain Fayolle
Posted on
April 20, 2022

With everything going on in the world, it’s unsurprising that the industrial automation industry is dealing with significant logistics and supply chain challenges. There are five prevalent logistics and supply chain issues facing the industrial automation industry:

1. Labour shortages
2. High shipping costs
3. The Russian-Ukrainian War
4. Human Processes
5. Sustainability

The Challenges

Let’s explore the issues currently facing the industrial automation industry.

Labour Shortages

One of the primary causes of supply chain delays in the industrial automation industry is the shortage of available labour, as many enterprises struggle to stay fully staffed. It’s not just one link in the supply chain either—it’s warehouse employees, long-haul truckers, and last-mile delivery providers. According to Scurri, nearly one-third of warehouse managers are dealing with staffing issues. 

Quit rates are higher at transportation and warehousing companies compared to other enterprises. In the US, the phenomenon has been labelled the “Great Resignation,” as many workers are leaving their current jobs to find positions that pay more, offer better benefits, or simply make the employee happy.

The challenge for companies is to find ways to offer competitive pay and benefits as well as a company culture that promotes employee retention. But keep in mind that even if you offer the complete package to prospective hires, there still may not be enough people applying to fill those spots. Then the challenge becomes finding a way to maximise output with a limited number of staff members.

High Shipping Costs

Especially with Brexit custom checks going into effect at the beginning of 2022, shipping costs have spiked and remained high. Air freight rates from China to Northern Europe alone increased by 4% in a single week, making the rates 39% higher than they were at the end of February.

Higher international shipping costs have led many to call for an accelerated shift from global to regional sourcing. When coupled with other disruptions like the pandemic, international conflicts, and labour shortages, it makes more sense for enterprises to have the ability to get everything ready for distribution within a smaller radius. 

The Russian-Ukrainian War

Further complicating shipping costs is the Russian-Ukrainian War. However, the war has led to multiple supply chain disruptions, which is why it deserves its own section.

The war conflict has caused oil prices to skyrocket and grounded most of the Ukrainian Antonov freighter fleet, leading to shipping delays. In fact, the fighting resulted in the destruction of the world’s largest freight aircraft

But even more disruptive is the ban of air carriers from travelling in specific spaces (i.e., Russian aircraft can’t cross over the European Union or the US and vice versa). Without direct routes available, enterprises are forced to chart longer, more expensive alternate routes to transport goods. Some companies have gone as far as to implement war risk surcharges to make up for the extra costs.

Other enterprises have tried to avoid the conflict areas altogether. Swiss engineering and automation group ABB announced on March 2, 2022, that they would temporarily halt the intake of orders from Russia, Ukraine, and Belarus. In their statement, the company claimed that they would monitor the situation and comply with export control and sanction laws when they go into effect. 

Human Processes

Humans are the source of innovation for any company, but there are limits to what humans can do independently. For example, in non-automated facilities, nearly a third of an employee’s time can be spent travelling back and forth within the warehouse to complete tasks. 

For industries like industrial automation where a high level of logistics velocity is necessary, taking measures to optimise the human workforce is crucial. Enterprises that have adopted automation have experienced an 80-100% increase in employee productivity. 

Improving human efficiency goes beyond helping workers get from Point A to Point B. It includes finding new ways to collect and store data, improve accuracy, and streamline development and deployment. The idea isn’t to replace humans with robots but rather to use technology to complement human activity.

Additionally, encouraging transparent communication among your human staff and asking them what would make it easier for them to complete tasks will help you consider all perspectives and options for growth.

Sustainability

Sustainability has become a buzzword in almost every industry, and industrial automation is no exception. Consumers have called for better global practices across all sectors. Schneider Electric is one of the companies leading the charge on the push for a more sustainable supply chain in the industrial automation industry. 

According to Adrian Thomas of Schneider Electric, “In terms of supply chain, not only is it about bringing on additional suppliers, we have something we call the Zero-Carbon project… where Schneider Electric is working with their top thousand suppliers to reduce their carbon footprint by 50% by 2025.”

Finding a Solution

Mitigating logistics and supply chain challenges becomes easy with the right tools in your arsenal. As they say, modern problems require modern solutions. Just as consumer demands have evolved, so has our ability to meet their needs with the help of powerful technology. 

Platforms that harness artificial intelligence (AI) enable industrial automation brands such as Beumer Group to increase efficiency in global logistics and resilience in supply chains. Advanced analytics give you unparalleled intelligence at your fingertips by combining shipping data and trade lane instructions that affect your brand’s products and transport routes. 

An intelligent system can automatically perform checks on shipping documents to improve accuracy and keep your brand in good standing. Some platforms will even let you set your own rules and regulations. Additionally, the right technology will enhance your team’s abilities to help your organisation be more productive. 

The best platforms can work independently or when integrated with ERP and Transport Management Systems to increase efficiency and accuracy. Once your system is set up, you should have access to precise analytics to reduce revenue leaks and plan for the future.

With the EU’s GDPR laws being the strictest data privacy regulations in the world, any technology you adopt must be GDPR compliant. 

Holocene is the next-gen AI application for global trade within the industrial automation industries. Our system offers error-free shipping across the globe, a single trade lane knowledge repository, and transparent analytics. In turn, you benefit by saving order processing time and delay costs, streamlining your operations, and mitigating risks. 

Want to become a customer like Beumer Group?
Contact us today and schedule your demo

Romain Fayolle

Co Founder & Managing Director

Strong with 8 years of experience in different international industries, Romain wants to connect Logistics & Supply Chain leaders and professionals with the game-changing technology