July 2009 | Commentary | Supply Chain Perspectives

Automation Grows, But We Still Need People

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One endless debate in space exploration is whether, and to what degree, humans can contribute. Do we send more robots to Mars or should we concentrate on a manned mission? While the cost of human space exploration is mind-boggling, it is hard to believe that human perception and inquisitiveness is of no use. It is the human proclivity for non-programmed behavior that is missing from algorithm-dominated automation systems.

By extension, is there room for people to contribute to today's supply chain? Or should we continue to automate?

The supply chain has been a target for increased automation over the past few decades. An increase in automation normally means a reduction in human input and output. Supply chain hardware, software, and processing solutions have been heavily automated, and there have been several outstanding developments.

The first and perhaps most important development is the use of automation for supply chain management. Working from a common database that includes a company, its suppliers, its logistics providers, and its customers all in one link is a benefit of automated digital processing.

Second, automation enables inexpensive and digital communication on a global level among suppliers, partners, manufacturers, transportation providers, and customers. The value of that ability is unquestionable. The Internet plays a major role in the automated processing of supply chain business because logisticians want to be able to reach anyone, at any time, and in any place as business requires.

Third, at the heart of an automated supply chain is order management and subsequent inventory control. While bar coding was the traditional method used for inventory management and control, RFID is becoming the core automation technology in the supply chain process. It has also been the critics' whipping boy for the past several years.

PROBLEMS AND SOLUTIONS

RFID's problems focus on compliance, cost, maintenance, and systems compatibility. Every problem with RFID has been met with a raft of solutions and the adoption of a complex process of compliance and pre-compliance testing. People have had to work extremely hard to accomplish further automation of RFID. Securing an accurate signal repeatedly over a distance is not a simple task and has created a whole new industry of solutions and sub-solutions. Let's give thanks for human innovation.

ADVOCATING RFID

Some organizations, namely Walmart and the Defense Advanced Research Projects Agency (DARPA), have pushed RFID automation, despite the technology's marginal success, according to critics. Across the board, Walmart suppliers have not been able, or in some cases willing, to comply with the retailer's RFID mandate.

Large suppliers, such as Procter & Gamble, have complied and in some respects have become Walmart's partners in RFID technology applications. Small suppliers are plagued with cost problems generated by the pre-compliance and compliance requirements of achieving an accurate and reliable RFID process.

Whether its RFID processes are perfect or not, however, Walmart is the world's largest retailer and can turn stock with amazing efficiency by anyone's standards. Part of the retail giant's financial success during this recession is its ability to keep inventory low while having shelves stocked with products customers want when they want them. Walmart is betting on automated technology, even if it is not perfect or complete, and this approach has put the retailer in a command position. You can dislike the company, but don't blame its automated tools.

Neither Walmart nor DARPA can claim their supply chains are fully automated, and given the pace of technology, achieving this goal is a pipe dream, anyway. Just as a system approaches what is perceived as full automation, it is likely to get upgraded, which requires enormous human input.

Upgrading can mean a finer level of detail—higher resolution, faster processing, and/or stricter security. It can also mean extending the process into unknown areas or untried applications. There are always other worlds to conquer, there are always more functions to connect, and there are always more issues of reliability to iron out.

DOING THE DIRTY WORK

As long as people plan, design, and build hardware and software, and manage those processes, the contribution of humans to automation is assured—but always in a condition of change. What we really want to automate is the dirty work, the repetitious work, and the work that can go wrong through the foibles of human memory.

To remember, recall, or physically record all the processes of one Walmart purchase would be a daunting task, even if it was limited to a single store. Extend the need to the central data repository, the warehouse, the transportation provider, and suppliers worldwide, and the task becomes impossible. We need automation to intelligently handle such a load and so many factors, places, and requirements. The battle is striking a balance between the right automation technology and the right blend of people, processes, and machines.

It is hard to discount the contribution that DARPA and Walmart have made in automating the supply chain through an ever-changing, and hopefully improving, RFID-centered process. These organizations are delivering a new message, and it is never wise to shoot the messenger.

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