Transport companies use modern technologies such as artificial intelligence, the Internet of Things (IoT), 5G to optimize the supply chain. Despite some anxieties about the use of AI in warehouses, plants and the fact that autonomous means pose a risk to truck drivers, technology creates several prospects and opportunities for supply chain companies. If we think in terms of economic processes, modern technologies, including robotic machines, will not be ready to completely replace human labor in the industry, but they will significantly simplify it.
According to the McKinsey consulting company, leading manufacturers of warehouse automation equipment have increased their annual revenues by 15-20% since 2014.
Analysts believe that in the short and longer-term, companies will choose interesting solutions and integrate them into their projects using a robotic process automation (RPA) system.
What is RPA?
Today, many people at work do predominantly automatic chores that do not require much mental effort but which take a lot of time.
For example: filling out forms, questionnaires, data reconciliation, updating the same data in different systems, complex calculations, manual tasks associated with a high risk of making a mistake, and much more.
There is a program that is a new step in the automation of business processes, including the global supply chain and logistics industry – Robotic Process Automation (RPA).
Robotic Process Automation (RPA) is the use of artificial intelligence (AI) software with machine learning capabilities to handle repetitive, high-volume tasks that were previously performed by humans.
This technology will allow replacing people with robots, with the subsequent redistribution of human resources to perform more complex tasks.
The main processes in supply chain management
The supply chain consists of four main functions, linked together: supplier, manufacturer, distributor, and consumer. Within the supply chain, value is created that is perceived by the consumer. For the society or the economy as a whole, the goal is to maximize the meaning of the value created without spending too many resources on it.
To create maximum customer value within the chain, each of its participants must effectively perform their function. Also, all participants in the chain must communicate effectively with each other.
However, the coronavirus pandemic in 2020 has seriously changed supply chain processes. The business faced a new reality: on the one hand, there was a sharp increase in online commerce, delivery, consumer patterns changed, and on the other hand, stable logistic ties between contractors were disrupted. Many companies were painfully aware of the consequences of the cash gap and saw the complexity of manual data processing due to the low level of automation.
The pandemic highlighted several key challenges faced by companies:
- forecasting demand,
- lack of diversification of suppliers,
- increased burden on logistics,
- outdated formats of interaction with counterparties,
- manual data processing.
Let’s look at it in order.
Manufacturers, distributors, and retailers were not ready for a sharp increase in demand for some categories of goods and a drop in demand for others – supply chains and sales plans were formed without taking into account the pandemic. This simultaneously led to supply disruptions, unclaimed stocks, and the need to rebuild logistics processes. Predicting demand in such conditions proved to be difficult.
Lack of supplier diversification
Supply chains have not had time to adapt to change. Companies whose supply strategy depended on direct suppliers were forced to reallocate resources. Apple became such an example, being dependent on supplies from Chinese manufacturers.
Logistics and delivery
The growth in demand for certain product groups has increased the burden on logistics. Companies were faced with the need to reallocate resources and look for additional carriers. The demand for online delivery has shown problems with route optimization and long delivery times. For example, retailers noted how, due to missing items, the order collection time increased by 1.5-2 times, the delivery time also increased.
Obsolete interaction formats and manual data processing
The pre-crisis methods of working with counterparties have shown their ineffectiveness in conditions of isolation. Information systems could provide transparent processes both between employees and between contractors, but the low level of procurement automation does not allow companies to analyze consumer demand, the availability of goods and predict further actions.
DHL experts have analyzed the challenges faced by various industries and see the following picture for the near future:
- Logistics professionals will be driven by the sustainability of supply, not cost. Keeping the chains intact will be critical.
- Changes in consumer behavior will require the adaptation of traffic flows and warehouse networks to new realities. Robotization will affect those processes in cargo transportation that have not previously been reached.
- The need for effective management of the life cycle of contracts with suppliers will create the need for robotization and automation of this area.
- Information systems will have to support the option of remote work of employees with documents and data.
Leaders in the supply chain rankings, according to Gartner, are among the first to adopt RPA supply chain management technologies, and some of them continue to develop supply chains even in difficult economic conditions because they see it as an opportunity for planning and flexible response in real-time to overcome fluctuations in demand.
Robotic process automation in supply chain management
#1 – Email Automation
For any supply chain, maintaining a meaningful relationship between customers, suppliers, shipping agencies, and manufacturers is critical. The organization always has open communication during critical situations, such as delays in delivery or difficulties in fulfilling an order, to build trust and credibility. At the moment, most of this task is done manually. But with RPA supply chain management, companies can easily automate this entire communication process.
RPA also helps automate email responses when an order has been requested, shipped, halfway completed, delayed, or received. This ensures that everyone in the supply chain can receive real-time notifications. Also, bots can read emails, recognize the meaning of the content, and perform the necessary actions. This not only frees up human resources but also eliminates human error.
#2 – Planning supply and demand
Before the advent of RPA, supply and demand planning was not a cakewalk for any organization. Employees need to gather the information they need from a variety of sources, such as suppliers, customers, market information, and sales, and then present that data in a standardized format.
With RPA technology, organizations can automate supply and demand planning. It also helps in collecting and formatting the information you need from various sources, analyzing data exceptions, performing data cleansing, and converting data to a plan. Once automated, the human role is limited to handling robot exceptions, running simulations, and holding supply and demand meetings to reach a consensus on a plan.
#3 – Supplier selection and procurement
Organizations must follow a laborious manual process when selecting and purchasing suppliers. This included preparing an RFQ (Request for Quotation), communicating with suppliers, performing a preliminary review of supplier documents, evaluating a supplier’s credit check, and completing supplier selection.
By implementing RPA for the supply chain, a company can automate sourcing and procurement processes. Human intervention is restricted to the initial phase of work, such as defining a project, creating lists of potential suppliers, and participating in site visits and negotiations. Once automated, supply chain enterprises can reduce cycle times by 25-50% and processing times by 15-45%.
#4 – Order processing and payments
Order processing in any business consists of three stages, which include:
- Selecting a specific product/service,
- Initiating a payment,
- Confirming an order.
In this era of automation, there are still businesses that prefer paperwork to process these transactions, but this leads to erroneous and wasted time. With RPA, order processing and payments can be automated. This is performed in such a way that the transaction data can be directly updated in the company database, payment gateways can handle the withholding of the amount, and the software solution can send a confirmation notification to the user.
#5 – Message about the status of sending
Logistics service centers regularly receive thousands of inquiries from customers about the status of the parcel with their order. The manual process goes like this:
- A customer service representative has to open every email,
- Open the ERP system to find the shipment record,
- Then record the shipment,
- Finally, they send customers updated shipping status information.
However, once RPA is implemented, the entire process from opening email, processing customer requests, logging into the ERP system, and communicating the exact delivery status to the customer can be automated.
#6 – Robotization of document processing
While industry leaders are adopting RPA, there are still companies who have not switched from paper to electronic workflow, which leads to long order processing, lack of transparency in the supply chain, and suboptimal decision making.
The robotization of document processing removes the routine from a person and allows you to establish transparent communication with counterparties. This can be reconciliations, creating invoices, and collecting statistics on inventory balances and sales.
As a result, automation:
- Reduces personnel costs and labor costs
- Provides unattended shipments
- Reduces logistics errors and optimizes the supply chain
- Allows you to efficiently manage your warehouse and predict shipments.
First of all, these are back office and supply chain operations—automation of order processing and payments. Order processing is accompanied by transactions such as manually entering customer information into the company database, processing payments, issuing confirmations by email, and order updates. Many companies still rely on manual labor and paperwork to complete these steps.
It can be used for purchasing, automating order and payment processing, controlling inventory levels, and tracking deliveries.
Inventory management is the core of the logistics supply chain. Manufacturers and suppliers must keep track of inventory levels to ensure they have enough products to meet customer needs.
Benefits of RPA in the supply chain:
- RPA reduces the need for manual work, which gives time to interact with customers in the front office.
- RPA is used to automate communication by automatically sending an email when an order is processed and agreed or delayed otherwise.
- Software robots monitor inventory levels, provide real-time reports to determine optimal inventory requirements based on past and future trends.
Between 2017 and 2022, the global RPA market could grow by 30.14% per year. Robotic process automation makes it possible to transform the supply chain and disrupt the way goods are produced, sold, bought, and consumed.
We see RPA as a great opportunity to improve efficiency and reduce costs in the huge logistics industry and supply chain.
What technologies can be used in supply chain management
In a recent report by Deloitte, RPA technology was identified as the best solution for delivering high enterprise productivity at every stage of the supply chain, as well as one of the ways to implement Industry 4.0 technologies throughout the entire life cycle of the company.
IoT, 5G, and big data
With the appearance of 5G and the increasing availability of the Internet of Things, companies have begun collecting data about their goods at every stage of the supply chain. If this info is not organized and sorted for different types of AI platforms in real-time, it will be useless for the company. RPA assists in data flow management in the logistics industry and ensures that there is no human failure in processing data collected by IoT sensors.
Data collected through IoT + 5G and sorted through RPA is processed at the edge or sent to the cloud. To identify the types of data, especially those that can help the company to manage, it is recommended to store information in the cloud. But often, a problem arises: the platform that collects and stores data cannot integrate with the chosen cloud service. In this situation, the integration is done at the expense of RPA. Using RPA, logistics professionals can connect cloud services to on-premises data platforms and collect and analyze information.
Working with AI
With 5G and the IoT that facilitate data collection and storage, companies are leveraging AI to organize information and deliver it to customers in a usable way. Companies use RPA to build chatbots that answer customer questions about a product, delivery schedule, and more. In this case, RPA is an intelligent intermediary and link between various platforms and modern technologies.
Pros and cons of implementing RPA to supply chain management
RPA supply chain management pros
- Robots do not need to rest. They will do their job 24 hours a day;
- Robots are not wrong. Once correctly configured, the robot will perform its tasks without errors that can periodically occur in humans;
- When the scope of work changes and new tasks appear, it is enough for the robot to change the rules of the workflow (modify the script), and employees in this situation must additionally learn;
- Robots keep a 100% record of their actions, which can be retrieved if necessary;
- Depending on the type of robotic process, 1 robot replaces 3 to 8 people in performance;
- The robot is very compact because it does not take up space;
- Ensuring prompt customer service;
- Ensuring business operations and processes are following rules and standards;
- Speeds up the execution of automatic processes;
- Ensuring increased efficiency by digitizing and auditing process data;
- Providing freed employees to solve more interesting problems.
RPA supply chain management cons
One of the drawbacks is the impact of robotization on company workers. This is the fear of losing your job and the bewilderment that funds are being invested in technology and not in employees.
However, the practical experience gained over the years and the current socio-economic environment have shown that overcoming the vigilance that arises with RPA is much easier than one might think.
The reasons for this are the impending shortage in the labor market and the overload of employees with routine operations.
RPA supply chain use cases
“In most cases, RPA is used in conjunction with other digital levers such as the Internet of Things, intelligent document processing, chatbots, mobile apps, and even blockchain to reimagine workflows to eliminate bottlenecks and other serious business challenges,” said Shirley Hung, vice president of the Everest Group, a Dallas-based consulting and research firm.
Here are five ways companies are incorporating RPA into their logistics and supply chain workflows.
Automation of data entry
Lack of integration is a crucial issue for almost every shipping business, and RPA software can help close some of these gaps.
Take the external logistics provider AM Transport, for example.
According to Jason Doris, CTO of AM Transport, the company has built two infrastructures:
- one based on Boomi, a division of Dell Technologies, to connect EDI integration between its customers,
- and one back-end application infrastructure on Salesforce, Google, and AWS.
The direct API integration can handle many workflows, he said, but some gaps required manual data entry on an ongoing basis.
Doris’s team implemented an RPA service Boomi Flow to eliminate repetitive data entry and EDI tasks and extend the workflow to other areas.
“If one chain of events happens, we can automatically contact customers, notify accounting and provide [bills of lading],” Doris said. “I used to have to do all of these tasks separately and manually.“
Equipment maintenance is an important aspect of supply chain management, and RPA – working with other technologies – can help by facilitating preventive maintenance efforts.
For instance, in an oil and gas plant, IoT-based preventative maintenance can detect corrosion and damage to pipelines. These IoT apps then use sensors installed in the pipeline to obtain data on hydrogen potential and gaseous composition. Apps pull sensor data in real-time and transfer it to the cloud for assessment, analysis, and prediction.
RPA bots act on this information automating the service scheduling process, notifying affected customers, and updating financial plans. This eliminates the delays that are typically associated with manual labor, shortens response times, reduces employee effort, and improves operational efficiency.
RPA can improve the efficiency of the delivery phase in the supply chain.
In these cases, RPA bots track orders and update order transfer details across all relevant systems. They can also work in connection with AI-based intelligent routing systems that coordinate the activities of multiple logistics partners such as road transport, cargo ships, and air transport. Bots can automatically assign a shipping partner based on the location of the goods.
RPA bots can also generate notifications for customers in the event of a delay improving customer experience through practice and real-time order updates. Essentially, this technology improves error handling.
RPA is especially useful in the management of cross-border traffic, which may require various additional customs, storage, and inspection processes that need to be coordinated.
What happens after the sale is becoming more and more important, and RPA can work with several other technologies to improve this aspect of supply chain management.
For example, when a customer submits a service request using a mobile app, an intelligent virtual assistant or chatbot can interact with the customers and then post the requests to the system. Intelligent document processing apps can read data from a variety of service request document formats and then coordinate with RPA robots to collect and process service ticket data.
If a customer needs to return an item, a mobile app for third-party service and reverse logistics partners can improve the visibility of location, arrival time, and turnaround time in the event of a repair. RPA bots can follow orders in real-time and automatically send confirmation emails to customers.
Digitally-assisted processes reduce employee effort and time spent on internal processes, freeing up time to interact with dissatisfied customers.
Creating purchase orders
An organization’s supply chain departments can use an RPA bot to check inventory levels and initiate a purchase order when the supply falls below a specified threshold. Most firms have a purchase order template or online ordering process customized with their suppliers, and the structured nature of the purchase order information lends itself to automation.
“By automating the process with RPA, the team can ensure consistency and reduce the likelihood of delays or failures in the process,” said Kapil Kalohe, senior director of business consulting services at Saggezza, a global IT consulting company based in Chicago.
Maintaining an efficient supply chain process reduces the risk of lost sales due to material or inventory shortages, ensuring that organizations can manage optimal inventory levels. Companies need to be able to control their supply during peak and trough times.
Manufacturing enterprises generate reports on the level of stocks of raw materials, work in progress, and finished goods. IT pros can set up an RPA bot to sync with a company’s CRM system. Based on the data in the report, the RPA bot can contact the relevant supplier via email or through the ordering portal to place an order. The purchasing manager will only have to track the notifications and approve the request. In multi-vendor and high-volume production organizations, this process can occur hundreds of times a day.
“There will be significant time savings by enabling RPA,” Kalohe said.
However, using RPA does not mean that human oversight is unnecessary.
It is also essential to create an additional approval process for an anomalous activity to avoid too many orders or misinterpreting rare cases, he said.
Find out additional 40 Real World Use Cases of Robotic Process Automation Across Industries.
RPA supply chain management future
The RPA system is used by a large number of trade and manufacturing companies for logistic purposes, namely in warehouses. Companies such as Amazon, Ocado, Alibaba, and others are actively using robotics in their distribution centers.
RPA, generally speaking, acquires a physical shell and clearly shows its purpose in the actions of a robot, which will perform the same automatic work as in the form of a graphical interface.
Business processes in the global logistics and supply chain industry rely heavily on back-office operations such as updating customer information on web portals with current load status and ETA (Estimated Time of Arrival), scheduling delivery, or picking up a trailer.
Robotic Process Automation (RPA) makes core business processes less tedious and repetitive. This ensures process and operational efficiency, thereby improving economies of scale.
Transport and logistics companies are increasingly under pressure from service companies and freight forwarders demanding higher prices for their services. Therefore, the only way for these companies to increase profits is to automate existing processes.
Unlike expensive and resource-intensive implementations of IT systems, the implementation of RPA pays off in 6-9 months depending on the volume of operations performed by “virtual robots”.
RPA improves the efficiency of supply chains by:
- Excluding manual data entry from internal systems to corporate portals;
- Collection of structured and unstructured data from various sources and subsequent processing;
- Increasing employee satisfaction with their work, free from repetitive operations of the same type. Promotes professional growth and leads to a decrease in staff turnover;
- Using software robots to read emails.
Robotic process automation contributes to analytics and artificial intelligence by gathering information about business models and internal workings to identify potential disruptions and weaknesses.
These ideas can be used to improve and optimize all areas of logistics. The RPA is like an outsourcing company in the field of boring, routine, but obligatory activities.
You only need to pay for the installation, and then the program will work for you. The reach of RPA is so wide that scenes from movies about the uprising of machines may inevitably come to mind, but in this situation for AI, the limit of possibilities is to facilitate and reduce the amount of work.
What sets RPA apart from traditional IT automation is the ability of RPA software to take into account and adapt to changing circumstances, exceptions, and new situations.
This will allow avoiding arising errors in calculations in transport, warehouse, and other areas of logistics.
The freed staff will be able to concentrate on more serious tasks, which will undoubtedly lead to discoveries and progress in the field of supply chain management.
Soon, we should expect the transition of not only large but also medium-sized supply chain management companies from pilot implementations to full-scale projects designed to transfer routine operations to the conduct of hardware robots.
By transforming supply chain processes, we improve efficiency and meet customer expectations.
In this matter, one-size-fits-all is no model for digital technology. Organizations need an IT partner who can tailor RPA implementation services to their needs based on the current state of affairs and ultimate goals.
Robotic process automation, compared to traditional automation, replaces not only the workforce but also changes everything on which the organization was founded. New challenges can arise in the service delivery process, and entire operations can be reworked to improve productivity and efficiency at the end of the day.
Want to take advantage of this technology? Get in touch with Flobotics. We’ll make everything possible to meet your needs. Be sure to work with real specialists matched with your project and industry!