RPA in Supply Chain Management: Pros, Cons and The Best Use Examples

Transport companies use modern technologies such as artificial intelligence, the Internet of Things (IoT), and 5G to optimize the supply chain. Despite some anxieties about using 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 about 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 companies will choose interesting solutions and integrate them into their projects using a robotic process automation (RPA) system in the short and longer term.

Today, many people at work do predominantly automatic chores that do not require much mental effort but take a lot of time.

For example, I was 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.

A program 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) uses artificial intelligence (AI) software with machine learning capabilities to handle repetitive, high-volume tasks that humans previously performed.

This technology will allow replacing people with robots, with the subsequent redistribution of human resources to perform more complex tasks.

The supply chain consists of four main functions: supplier, manufacturer, distributor, and consumer. Within the supply chain, value is created that the consumer perceives. For 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.

Each participant must effectively perform their function to create maximum customer value within the chain. 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 and 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 considering 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.

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.

The growth in demand for certain product groups has increased the burden on logistics. Companies faced the need to reallocate resources and look for additional carriers. The market 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, and the delivery time also increased.

The pre-crisis methods of working with counterparties have shown their ineffectiveness in conditions of isolation. Information systems could provide transparent processes between employees and contractors. Still, the low level of procurement automation does not allow companies to analyze consumer demand and 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.
• Consumer behavior changes will require adapting 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 in 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