Automation Strategy

We’ll dive deep into organizational structure, supply chain facilities and functions, technology footprints, Operational KPIs and business performance from recent years.

Site visits provide critical first hand views of operational strengths and weaknesses.  Getting into representative facilities, walking the floor with subject matter experts from executives to floor supervisors and associates allows us to attain a robust view of the operational needs and opportunities.

For our executive interviews, we’ll provide a set of question for review in advance and hold a conversation with each stakeholder identified as critical to success, probing for perspective on how they influence overall company success, current state challenges, divisional initiatives, longer term strategic objectives, etc.

Individual interviews provide a platform for feedback as we aggregate perspectives and read back overall findings with a focus on establishing consensus on organizational objectives and priorities.  This provides clarity on potential or expected changes to the current state and ensures we are planning for the future with agility in mind.

SCT’s managing partners are embedded in the ecosystem of technology firms and innovators, as well as services providers.   Our technology briefings cover everything cross-functional leadership teams need to know about trends and disruptions in the supply chain technology space – from automation solutions like traditional conveyors and sortation to magnetic levitation systems for material transport, AGVs to intelligent AMR offerings like goods to person and person to goods, and from traditional crane based solutions for automated storage and retrieval to modern high density storage and picking solutions and order sequencing shuttles.  We’ll also cover systems capabilities from WMS to WES to WCS, providing critical perspective on the ability to throttle work to the floor without disrupting the efficiencies with unintended consequences related to product availability in the source locations or capacity available on the docks or spurs, as well as avoiding congestion throughout the material and order processing flow that can disrupt expedited orders and trailer dispatch times.

Prior to zeroing in on automation technology, SCT collects findings from initial site visits and early analysis to identify operational inefficiencies that can be addressed to streamline or improve operations, potentially including updated layout recommendations, product flow improvements, process re-design, and lightweight technology adoption.  This provides a clearer view of optimized operations onto which to overlay automated solutions for maximum impact.

Aggregating data across disparate technologies and footprints can be challenging, but is critical to attaining a common understanding across the facilities in preparation of more advanced modeling activities.  Analysis will include the following:

• Product Classification Based On Order Profiles, UOMs,  Dimensions, Velocities
• Facility Design Options Based on Storage & Selection Requirements
• Equipment & Process Options Based on Fulfillment Objectives

SCT will work with client leadership to translate growth projections into a forward-looking network strategy. Leveraging projected sales volumes and considering order profiles and service-level expectations by channel, we will simulate those projections and develop a scalable model simulating demand shift impacts on facility capacity, inventory placement, and transportation flows over time.  The result will be a revised site segmentation model that we can then identify value-add options for the introduction of automation, respective of the constraints for any retrofit opportunities, but also considering opportunities for building expansions or greenfield development.

Notably, these models can be purpose-built as an aide to the automation assessment, or they can be developed with the objective of extending their use for network optimization strategy – an ongoing tool that allows the continuous evaluation of inventory levels, product flows across the network and their associated transportation costs, and service levels.  The application of these toolsets facilitate:

• The optimization of inventory levels and replenishment strategies to customers, including for VMI programs.
• The evaluation of Transportation needs and procurement strategies.
• The impacts of future network changes or automation adoption impacts on material and order processing costs and speed.
• The evaluation of synergies that can be achieved through combined operations following M&A (or impacts of divestitures).

For more information on network optimization, see Network Optimization.

SCT Advisory specializes in conducting comprehensive end-to-end supply chain assessments that uncover hidden inefficiencies, bottlenecks, and untapped opportunities across supply chain planning, order management, logistics and warehousing.  We go beyond surface-level diagnostics to evaluate how well your processes, technologies, and organization align with your strategic goals and customer expectations.

In this exercise, we’ll evaluate opportunities to streamline operations to better feed, manage, or maintain automated operations from a cross-functional perspective, and pair that perspective with specific and pragmatic options for the introduction of automation into the network segments that have been identified, considering speed, complexity, and cost.  Finally, we’ll consider organizational capabilities and sourcing strategies (in house vs outsourced) across IT services, monitoring, and maintenance that reinforces potential challenges in the long term viability of automation investments, setting the stage for deeper strategic development of the relationships and skills needed for an optimal automation strategy.

An evaluation of current state operations KPIs, analytics, and benchmarking strategies and tools allows SCT to evaluate opportunities for improving collaboration across facilities and the strength of centralized management and continuous improvement processes.  Automation investments require some level of centralized strategy to leverage the investments, and this evaluation will feed later into the organization impact assessment which is intended to describe needed investments to drive consistency and communication across operations.

For the official readout of findings, SCT will facilitate a workshop that outlines business priorities, considers areas of investment critical to discussion amongst the team, and invoke participation to ensure individual priorities are understood across the team in the context of overall strategy.  This consensus building exercise delivers a shared commitment to success across the leadership team.  Finally, we’ll consider organizational capabilities and sourcing strategies (in house vs outsourced) across IT services, monitoring, and maintenance that reinforces potential challenges in the long term viability of automation investments, setting the stage for deeper strategic development of the relationships and skills needed for an optimal automation strategy.

The end result is a cost / benefit assessment and prioritized list of automation opportunities to be pursued, with an outline of strategic and tactical follow ups to prepare for the roadmap development and justification of those initiatives, and the areas needing deeper analysis for scoping, staffing, and budgeting to ultimately align the budgets, vendor proposals, and organizational actions needed for success.

Based on feedback from the executive summary in the first phase, SCT will develop the structure of activities needed to further refine the roadmap plans and justification.  Considerations will include:

• Automation concepts and vendors to be validated through an initial ROI for high level budgetary and capability verification.
• Automation concepts and vendors to be vetted through an RFI process and short-listed for subsequent phase RFP and selection processes.
• System architecture recommendations and gap analysis – potentially including RFIs for value add solutions.

RFIs will be developed and issued in alignment with client procurement standards and will include critical questions to confirm capabilities and estimate purchase and installation costs, scope, and timelines.

SCT will prepare a high level architecture assessment focused on warehousing and automation.  Scaling up automation investments warrants an intense focus on repeatability and reliability, and the architecture assessment will consider everything in the ecosystem that assures these can be delivered cost-effectively, including:

• Connectivity, data mapping tools, and integration monitoring tools.
• Task generation and orchestration of priority tasks in efficient assignments across manual and automated functions (including considerations for inventory availability and capacity constraints that could result in congestion on warehouse floors or conveyance).
• Equipment and automation status monitoring, alerting, and insights into root cause analysis and prevention.
• Maintenance management systems that plan spare parts inventories and work order scheduling.
• Instrumentation for monitoring equipment wear and tear, and the tools available for leveraging data for prescriptive maintenance recommendations.

A critical consideration that can save millions of dollars annually, maintenance planning is often deferred until vendors are selected and their recommendations become the de facto answer – but these recommendations streamline purchasing to the OEM (at a premium), and the OEMs have little incentive to right-size the purchasing and maintenance plans – outages may well result in additional buying suggestions, but true calibration of maintenance needs is seldom part of their strategy.  Insourcing responsibilities for monitoring the performance of maintenance practices ensures someone internally is looking out to prevent downtimes and manage costs, but also come with their own set of complexities (locally vs centrally) in an area where skilled labor often requires advanced training.  Third party distributors can be leveraged, and services providers including the OEMs can supplement in house capabilities.

SCT develops a set of recommendations to be leveraged during conversations with suppliers to ensure strategies are leveraged, and balanced plans are put in place to ensure the ongoing care and feeding of the maintenance strategy is implemented and supported, optimizing the investment in automation well into the future.

Received RFIs will be collected by SCT and evaluated.  Follow up clarifications will be pursued as needed.  Further evaluations by client staff and SCT will be facilitated in the form of Q&A sessions and vendor presentations on their solutions, approach and differentiation.  The intent is to confirm justification for inclusion in scope and to force-rank potential providers of higher cost and complexity solutions.

In alignment to the future state vision and roadmap priorities, staffing requirements associated with implementation, ongoing monitoring, spare parts management, and maintenance operations will be evaluated to develop recommended roles and responsibilities for the roadmap execution, which will also be considered during budgeting requirements.

Aggregating inputs across workstreams, we’ll sequence initiatives with associated schedule requirements and costs, prepare contingency, and overlay implementation and steady state staffing and maintenance costs to provide a comprehensive view of initiatives and their interdependencies on staff, as well as timelines.

With recommended sequences of activities in place, the final phase of program planning is ready – to consolidate budgets and justify the automation strategy at a program level.  Combining purchasing and installation estimates with incremental costs for program oversight (internal and external) of the required supporting infrastructure (such as enterprise IT costs), maintenance program, center of excellence, etc.

The collective justification will aggregate savings with a time-phased view to give incremental and holistic ROI projections for final review and approvals from the board.

With clarity on roadmap priorities and tools, strategic relationship objectives can be solidified, allowing the broader ecosystem requirements to take shape. Governance processes in support of strategic relationships will be joined by sourcing and vendor strategies for adjacent investments and support areas. These may include direct engagements with preferred partners, RFIs to be leveraged as educational processes for areas that may require deeper design understanding, or RFPs to streamline and accelerate urgent initiatives, or where the provider landscape is more mature and requirements understood.

Based on results of the phased activities, we will deliver an executive readout of findings and recommendations, including:

• Overall scope options and roadmap recommendations.
• An internally focused organizational impact assessment, identifying leadership and supporting roles that will be needed (net new) or impacted by the recommended roadmap.  Supporting roles and responsibilities across the program will also be identified with recommendations on in-house or external support where appropriate.
• Consolidated, program level budgetary estimates and ROI expectations.
• Roadmap Implementation Plan and Proposal – Lays out the next phase(s) of the program to pursue.

Designing an agile, cost-effective distribution facility requires deep knowledge of software, hardware, and automation vendors—especially in a market crowded with “turnkey” providers that may not fully meet your unique business needs.

At SCT Advisory, our approach begins with evaluating your distribution strategy, followed by detailed assessments of order profiles, business processes, and throughput requirements. We develop scalable, flexible facility designs that leverage the latest automation technologies. From design through implementation and ramp-up, SCT provides end-to-end oversight to ensure your facility operates at peak performance.

For more information, see Facility Design & Engineering under our Services page.

Partnering closely with Procurement, SCT identifies critical success factors for vendor selection, documents requirements, evaluates proposals, and helps select providers capable of delivering best-in-class solutions tailored to your facility. 

SCT provides program planning and oversight—ensuring timely delivery and installation of equipment and systems, quality standards are met, associates are trained, and inventory levels support a smooth ramp-up to meet customer demand.

As SCT is embedded throughout the requirements definition and evaluation, the investment will continued to be leverage as we apply management and executive oversight to both facilities and systems preparations and vetting processes.

Our facilities leads will help prepare for the receipt, installation, quality assurance (through multiple test cycles) and full production ramp-up of the delivered automation equipment.

Our systems leads will help throughout the detailed design, configuration, testing, training, and post-implementation support to achieve full production capabilities for the equipment and supporting systems.

Change management is perhaps the most critical element assuring the success of an implementation. Preparing the business for the impacts of process and technology changes, while championing the positive impacts it will have on the personnel and the business can go miles towards driving the correct outcomes. SCT works with client leadership to build awareness of pending change and communicate effectively across stakeholder groups while preparing them for a successful transition.

Ensuring stakeholders maintain a clear line of sight to both project success and program objectives is critical.  Opportunity often lies beyond your typical cadence of status reporting and milestone presentations.  With ongoing and frequent dialogue beyond the mechanics, our advisors will cultivate a dialogue with project stakeholders deliberating project risks related to people, process, and technology, adding rigor to change management and calibrating scoping decisions to balance results with objectives around schedule and costs.

Formal, objective reviews of program success prove useful to calibrating program investment.  Our advisors, extracted from the day to day challenges of operations and project management, provide a useful rudder to steer your program to achieve its longer term vision, and serve as a reality check when responding to trends and anticipating potential disruptions.