Big companies count on technology for supply chain future
Coca Cola Amatil believes continuing levels of automation in its supply chain will provide future benefits. Photo: Bloomberg
Two of Australia's largest enterprises have nominated big data and automation as the emerging technologies and the biggest opportunities for their future supply chains.
Rio Tinto's global head of procurement, Ramsay Chu, has 850 staff managing over US$19 billion in contestable spend in a supply chain that extends across 200 global locations and 40,000 suppliers.
He said the company was "in a situation where we're receiving and managing data from so many points and systems" and thus was looking to managing big data and improved analytics.
Big data is essentially the harvesting of an ever-growing volume of information from a wide range of systems and sources to generate insights.
"How we manage and synthesise all that data to give us up-to-date and real time information will help us to be more proactive in how we provide value to the organisation."
Over the last two years Rio Tinto has, among other projects, embedded cloud based solutions to support sourcing, supplier management and tendering. The company has also embraced internal social networking platforms and seen greater use of barcoding and scanning technology.
"Due to the nature of our business, dealing with industrial material we would consider using RFID and Near Field technologies on a targeted basis," Chu said.
Rio Tinto is also looking to capitalise on its current automation architecture to be able to "embrace new technologies like electronic data interchange (EDI), paperless processing and electronic invoice presentment and payment".
"These technologies will streamline the process and eliminate paper-based solutions," Chu said. "The automation of workflow and manual processing will allow for greater output and less errors; allowing our people to improve processes and focus on providing great customer service.
"Moving forward we will also investigate more mobile applications. The challenge associated with that concept is that we operate in certain environments where not everyone has equal access to the technology we sometimes take for granted. But everybody has a cell phone. Imagine enabling purchases, delivery receipts and even payments by cell phone."
The nature of Rio Tinto's business is that it operates in developed and emerging economies and often acquires businesses of different technological maturity. In a perfect world Chu says they would rip and replace everything for one transformative solution to completely replace the legacy infrastructure.
"But there are challenges; rarely is anyone afforded the luxury of starting from scratch," Chu said. "We need to rationalise, integrate and optimise. We need to think boldly to solve this challenge and embrace new technologies and paradigms to transact and collaborate."
The same mind set of embracing new technologies has been adopted at Coca-Cola Amatil (CCA). The company claims it has a domestic supply chain second in scale only to Australia Post. In peak season CCA in Australia delivers more than one million cases of product every day.
Over the last five years as part of a $620 million transformative program called "Project Zero", CCA has rolled out an order-to-cash technology platform ($65 million) called One Amatil Information Systems (OAIsys).
It has vertically integrated its manufacturing operations to enable PET bottle self-manufacture and manufacture of PET pre-forms and caps. It has also invested in a series of automated warehouses, processes, and guided vehicles in Sydney, Melbourne and Auckland.
"The largest piece of Project Zero, and the largest capital project ever undertaken at CCA, is the $450 million rollout of PET bottle self-manufacture, or blow-fill, across all major manufacturing operations across the group which is due to complete in 2015," said CCA supply chain director, Bruce Herbert.
This investment has meant a reduction in PET resin in the environment, the equivalent of 50,000 trucks off the road and also truck loading being reduced from 25 minutes to seven minutes whilst increasing stock accuracy from 80% to 98% and allowing for an increase of SKUs from 194 to 1100.
The company now believes continuing levels of automation in its supply chain - including the use of advanced robotics, automated guided vehicles, smart technology and artificial intelligence which is optimising planning sequences - will provide future benefits.
"Improvements and investments in CCA's supply chain have been instrumental in turning the Coca-Cola Amatil of the 90s - which could be characterised at the time as a low-touch and very low-tech organisation - into what is now a much more profitable and customer-centric fast-moving-consumer-goods business," Herbert said.