How RPA is Helping Supply Chain Management?

Logistics and supply chain are one of the fastest growing and most competitive sectors in the world. Over the years, companies have invested billions of dollars in scaling their processes and infrastructure to bring the price down and look for ways to increase efficiency. This industry relies heavily on back office operations to handle challenging tasks like scheduling shipments and deliveries, cross-docking, monitoring change, handling exceptions, and most importantly, customer satisfaction. Most manufacturers, retailers and logistics service providers have integrated supply chain management systems, but data integration and process automation remain a challenge for them.

Industries have different opinions about new technologies, but to survive in such a competitive landscape, companies need to be bold and adopt new technologies with open arms. Everyone is looking for a solution that minimizes labor costs and maximizes ROI. This is where RPA comes in. Not only is it a buzzword, it’s fast becoming a trend in organizations to envision how to effectively manage and deploy business process automation.

What is RPA

Robotic Process Automation (RPA) is software that is programmed for basic tasks, just like a human workforce. The software robot works with an algorithm, business logic and structured inputs to automate business processes. It accepts receipt forms, sends a receipt message, verifies the completeness of the form, fills out the form, and updates a table with the name of the form, the date it was submitted, and other details. RPA tools are designed to reduce the burden on employees of repetitive, simple tasks.

The global software industry for automating robotic processes has come a long way. In 2016, RPA software purchases totaled $ 73 million. It was increased to $ 113 million in 2017. For the next two years, that amount was $ 153 million and $ 192 million. HFS research estimates that number will rise to $ 232 million in 2020 and to $ 272 million by 2021. These projections suggest that there is a strong demand for RPA tools in the global market. RPA services also became popular with businesses, generating $ 198 million in 2016. A report predicts that number is expected to rise to $ 952 million by 2021.

Hadoop researchers predict the potential savings companies will realize with RPA by 2025 will be between $ 5 trillion and $ 7 trillion. Statista predicts the RPA industry will be worth $ 3.1 billion in business by 2019 and $ 4.9 billion by 2020.

According to ISG reports, 70% of companies will implement RPA by 2022 to support their business process activities. Adapting RPA is having a dramatic impact on the supply chain in terms of productivity, efficiency, and accuracy in the supply chain and logistics industry. Among the various benefits RPA brings to the industry, real-time inventory visibility and warehouse management are the most important.

Benefits of Implementing RPA

1) Reduced Costs: Companies could save about 30% if RPA software replaces a business process run by a full-time employee.

2) Reduce operational risk: RPA eliminates human errors such as fatigue or lack of knowledge. This helps to reduce operational risk.

3) Enhance Customer Experience and Improve Employee Engagement:
Customer experience and employee engagement are the two crucial aspects of a business. By implementing RPA, you can achieve both. On the one hand, you put your high quality and expensive resources at the forefront to ensure customer satisfaction. On the other hand, RPA does repetitive tasks so employees can focus on more productive tasks that increase engagement between them.

4) Improving the scope and quality of data collection:
RPA helps reduce manual errors that lead to higher quality data and allows analysis teams to access more data, resulting in more accurate analysis.

5) Easy integration into existing IT infrastructure: One of the most important advantages of RPA is that it uses the same systems that your full-time employee uses. Previous business process management solutions and workflow management tools need to be built into every application with which they have interacted. RPA uses your existing IT infrastructure.

How RPA solves problems in the supply chain

1) Email Automation

For any supply chain business, the most important task is to maintain constructive communication between customers, suppliers, transportation agencies and manufacturers. An organization always has open communication in critical situations such as shipping delays or difficulties with order fulfillment in order to build trust and credibility. Currently, most of this task is done manually. With RPA, companies can easily automate this entire communication process.

RPA also helps automate email responses when an order is requested, shipped, halfway hit, delayed, or received. It ensures that everyone in the supply chain can receive real-time notifications. In addition, bots can also read emails, understand the meaning of the content and take the necessary actions. Not only does it free human resources, but it also eliminates human error.

2) Supply and demand planning

Before RPA, supply and demand planning wasn’t a piece of cake for any company. Employees must collect the required information from various sources such as vendors, customers, market intelligence and sales teams and then present this data in a standardized format.

With RPA, companies can automate supply and demand planning. It also helps in gathering and formatting the necessary information from various sources, parsing data exceptions, performing data cleansing, as well as converting data into a plan. After automation, the human role is limited to handling robot exceptions, running simulations, and holding supply and demand meetings to achieve plan consensus.

3) Supplier selection and procurement

Companies must go through a time-consuming manual process when selecting and sourcing vendors. This included creating an RFQ (Request for Quotation) document, communicating with suppliers, performing a preliminary analysis of supplier documents, evaluating the supplier’s creditworthiness check and completing the supplier selection. With the implementation of RPA, the company can automate supplier selection and procurement processes. Human intervention is limited to the initial work phase, e.g. B. the definition of the project, the creation of potential supplier lists as well as visits and negotiations on site. After automation, supply chain companies can improve cycle time by 25-50% and processing time by 15-45%.

4) Order processing and payments

Order processing in a company consists of three phases, which include the selection of a specific product / service, the initiation of payment and the confirmation of the order.
In this era of automation, there are still some companies that prefer paperwork to process these transactions. However, this leads to erroneous and excessive expenditure of time. With the help of RPA, order processing and payments can be automated. This is done in such a way that transaction data can be updated directly in the company database, payment gateways can process the deduction of the amount and a software solution can send a confirmation notification to the user.

5) Shipping status communication

Logistics service centers regularly receive thousands of inquiries from customers about the status of their order package. The manual process is as follows: the customer service representative needs to open each email, open the ERP system to find out the shipment record, and then make a note of the shipment. Finally, they send a shipment status update to customers.

After the introduction of RPA, the entire process from opening the e-mail to processing customer inquiries to logging into the ERP system and transmitting the exact status of the shipment to the customer can be automated.

The global RPA market could see an annual growth rate of 30.14% between 2017 and 2022. The automation of robotic processes offers the opportunity to transform the supply chain and disrupt the way goods are made, marketed, bought and consumed. We see great opportunities in RPA to improve efficiency and reduce costs for the huge supply chain and logistics industry.

April 3, 2021