How RPA Is Changing the Logistics Industry and Supply Chain Management

What do semiconductors, building materials, aluminum, and plastics have in common?

They all power the functioning of a whole gamut of sectors, from tech and construction to manufacturing and the food industry. But more significantly, they all continue to experience a surge in demand, increasing prices.

Shortages are nothing new, and neither are the culprits: COVID-19 and the supply chain crisis (94% of Fortune 1000 companies are affected by supply chain disruptions). The two were a rude awakening for consumers worldwide as prices and shipping times started to soar and inventories—dwindle.

At the same time, the demand for certain products and materials shows no signs of stopping, and the logistics industry has no choice but to adapt, optimizing its processes and cutting costs without cutting corners.

One way to achieve that is by applying Robotic Process Automation (RPA). Let’s see how it can be used in logistics and SCM to minimize disruptions, streamline operations, and decrease inventory costs.

Robotic Process Automation may sound daunting for those unfamiliar with AI-driven technologies. However, technical intricacies aside, its basic concept is easy to grasp.

Regardless of the industry, most businesses involve repetitive processes based on rules, performed periodically, and involve large volumes of data. Due to their monotonous nature, they get time-consuming and tiresome if done by hand, making costly slips more likely.

RPA enables optimizing these tasks by handing them over to pre-programmed algorithms (bots). They can work around the clock, don’t get tired or sick, and process bulk data in large volumes with speed, ease, and without errors.

Since logistics involves many sequences of repeatable processes, it presents many opportunities for RPA optimization. Here are some of the best automation candidates in supply chain management:

• Invoice processing — Invoice-related tasks are as essential as they are tedious. Finding, updating, entering vendor and customer details, attaching scans, requesting documents, processing payments, and submitting invoices can cost your company tons of time and frustration. Fortunately, all these phases of invoice processing can be easily automated, making it one of the best RPA use cases.
• Vendor analysis and evaluation — Choosing vendors is a multi-stage process usually handled manually. RPA systems can assist you at each selection step—preparing quotation requests, scanning documents, and verifying supplier credit—and give you more time to focus on sealing the deal.
• Inventory management — Keeping track of what’s in stock gets increasingly difficult as your company scales up and inventory becomes more diverse. RPA can streamline warehouse management by monitoring specific items’ condition, location, and quantity and notifying you when a product gets damaged, or its stock runs low.
• Supply and demand planning — The ability to precisely predict shifts in supply and demand is one of the most fundamental factors in efficient supply chain management. However, achieving that depends on analyzing large data sets, often making the process overwhelming and prone to mistakes. With RPA, all records are automatically collected, compiled, and then analyzed based on preset rules—quickly and accurately.
• Coordinating and scheduling — Even when shipping, resupplying, billing, maintenance, and other critical tasks are run flawlessly, they still need to be conformed to make the entire supply chain effective. RPA can serve as an intermediary between all your systems and partners, retrieving information from emails, replying to messages, filling in forms, or sending alerts to relevant stakeholders when a delay occurs to guarantee complete transparency.
• Order management — Knowing your inventory is one thing; knowing and resupplying it is another. An RPA system can use the inventory data to initiate purchase orders based on predetermined criteria: the bot compares available vendors and prices, generates order documentation, submits the order for approval, and requests the necessary products—all that to minimize supply chain disruptions and sales lost due to missing goods.
• Freight management — Once the stock is full, the next step is moving your shipments. RPA will help you match loads, handle freight claims and charges, and pick optimal routes. After the delivery is complete, analytics bots can assess the health of your supply chain and find potential improvements.
• Shipment tracking and status updates — With so many moving parts involved in the SCM process, visibility is key. RPA will monitor the cargo at each stage of its journey and upload current data to your warehouse management system.
• ERP integration — An ERP system is an indispensable tool in supply chain management, and RPA can take its capabilities even further. Automating data entry, migration, and validation reduces the risk of error virtually to zero, making the records your ERP relies on much more accurate. In addition, information is uploaded and moved significantly faster, with no manual typing (and typos) involved.
• Customer service — Handling shipment status inquiries alone can be a busy job. With the help of RPA, you can keep your customers in the know thanks to up-to-date delivery statuses and automated troubleshooting. Regarding returns and after-sales services, many tasks that don’t require human intervention (such as ticket processing, data entry, or claim verification) can be relayed to bots, too.

This list is incomplete, but RPA is not just about making single processes more effective but also about bigger-scale business impact. So let’s see why.

If you’re looking for opportunities in logistics as a new industry for your IT consulting firm, find out more about automation for consultancy. We have also materials about RPA in manufacturing, e-commerce, sales, real estate, and insurance.

The word ”chain” in logistics and SCM is used simply because its many processes resemble connected and interdependent links. That means that SCM thrives on economies of scale and that even small efficiency improvements can lead to massive increases in output across the board. So let’s zoom out and look at how optimizing individual SCM-related tasks can affect your business.