Robotic Process Automation: The Key To A Cost Effective Supply Chain Management

A research report by Deloitte says about 64% companies have embarked on the journey to implement Robotic Process Automation (RPA) in order to automate support tasks. The same report outlined a critical fact that not jobs, but tasks are being automated, allowing employees to focus on high-value activities, freeing them of monotonous pieces of work across a myriad of industries.

Over the decades, enterprises have invested time, money and multiple other resources in building their supply chain infrastructures and processes. Even though the majority of stakeholders ranging from manufacturers, retailers to logistics providers have adopted some type of supply chain management system, the key challenge of end to end data integration along with process automation remains.

Users still, to this day, continue to copy/paste data manually between disparate systems in order to maintain communication and data exchange on a day to day basis. The ongoing dependence on spreadsheets, workflows and archaic processes that tend to involve a ton a “swivel chair” work like jumping from one app to another, copy pasting data and more clearly shows how much room there is for further improvement.

These manual, mundane and repetitive tasks are not only inefficient but play a major role in slowing your operations and tying down resources that can focus on more mission-critical tasks and contribute in a far more creative manner. Robotic Process Automation in the supply chain has the potential to bring a drastic impact in terms of productivity, efficiency, and accuracy on the business processes industry.

Robotic Process Automation in supply chain serves to automate processes that are carried on manually, leaving little room for errors and anomalies. RPA tools are basically software solutions residing on virtual servers that can be executed and shut down at the desired hour.

Automation through robots will allow organisations to recruit and train employees for problem-solving and brainstorming work, instead of repetitive robotic tasks.

It is not shocking when the study highlights that robotic process automation has resulted in a 43% time reduction for tasks such as credit, collections, billing, etc. These are tremendous gains for any enterprise, but would massively benefit organisations looking to effectively manage their complex supply chains.

The implementation of RPA for the sake of supply chain has been slow, but looking at the gains at stake, organisations are now turning to automation to streamline the flow of products and gain a competitive edge with customers.

But, how exactly can this leading technology effect change in that way supply chains have traditionally operated? What are the ground-level modifications enterprises need to make before they can dive head-first into implementing RPA in the supply chain?

RPA in Supply Chain Management – Use Cases

Robotic Process Automation is still in its infancy in supply chain operations, however, organizations have accelerated towards including automation in their supply chains to make them lean and efficient. Companies across industries such as healthcare, retail, and manufacturing have traditionally relied on technologies such as RFID (Radio Frequency Identification), ERP (Enterprise Resource Planning), CRM (Customer Relationship Management), etc.

In the beginning phases of RPA, software robots were not flexible enough to handle the complex scenarios that sometimes sprung up as they were unintelligent and could only automate parts of the supply chain that were straightforward and followed a set pattern.

For anything else, manual intervention was critical. Fast forward to today, the inclusion of intelligent bots with machine learning capabilities and cognitive abilities has led us to make RPA systems resemble humans to an extent. With these technologies in view, we are moving towards automating tasks that are defined by business rules and pave instructions for processing inputs.

At the higher level, RPA can be used to predict outcomes and support complex decision making, thereby, helping employees with more than just robotic tasks. Here are a few areas in the supply chain domain that are ready to change with RPA –

Order Processing And Payments

The order placement and processing part of a supply chain essentially consists of three phases-

• Product selection
• Payment processing
• Order placement confirmation

There are still businesses within a set of industries today that rely on old manual paperwork to process transactions which can be entirely digitized. Order processing and payments can be automated such that information can be directly ingested into the company database, payment gateways can process the desired amount, and a software solution can send out email and text message confirmations for the placement of order.

As on today, with the advent on AI and RPA, multiple insurance companies rely on bots to automate claims processing as well and by automating this back-office work, organizations can ensure their employees focus on quality tasks that require human intelligence.

To optimize productivity and create a smooth supply chain, organizations will need to ensure these tasks are tightly integrated and make sure there are no glitches from order placement to delivery.

Email Automation

Well-maintained supply chains take care of one aspect dearly. Communication. A large part of any supply chain is maintaining proper communication with suppliers, manufacturers, transportation service agencies, and customers. Even though concise and effective communication is such a critical part of supply chains, it is often the one that has major need for improvement, too.

To ensure proper collaboration between staff in different departments, email communication needs to be set up with RPA. It is critical to lay down processes of communication when shipments have been successfully delivered, when they are stuck midway or delayed, and when they need to be canceled. Effective communication between all parties involved needs to be ensured such that the customer gets a smooth experience.

RPA can be used to automate this communication process by triggering emails and text messages when a specific event occurs.

Inventory Management Automation

At the core of supply chain lies inventory management. Suppliers and manufacturers always need to be aware of their inventory levels and ensure they have enough products and spares to meet demands. RPA can make inventory management easier by keeping a tab on inventory levels, notifying managers when product stock levels are low, and automatically reordering products that go below a certain threshold level.

Additionally, an RPA system can help predict the optimal inventory levels by taking into account the historical data and sketching out patterns in demand. It would make the inventory management process efficient and always updated to accommodate spikes in demand.

Enhanced insights can lead to better decision making when it comes to restocking of inventory, thus resulting in cost optimization at all times reducing spares. As employees are freed of the monotonous task of maintaining records of inventory levels, they can focus on other mission-critical areas of the supply chain.

Vendor Selection

Vendor selection is usually an entirely manual process and RPA aims to change that. At the ground level, a vendor selection process consists of several steps such as –

• Preparing a request for quotation
• Communications and discussions with vendors
• Analyzing vendor documents
• Evaluating the vendor and cross-checking their credits
• Finalizing the vendor

With the right RPA implementation strategy, all of these tasks can be made more efficient, productive, and automatic. Human intervention, then, is only required to carry out the initial phases of specifying the project, generating a list of vendors, and engaging in face-to-face negotiations. Apart from these instances, humans will not need to intervene in the vendor selection process once RPA implementation is completed for an enterprise.

Shipment Status Communication

Most businesses regularly receive shipment status inquiries from customers. The manual process looks like this- an employee would personally open each email, address the query by making a note of the shipment and then looking it up in the ERP software to reply back to the customer with the exact shipment status.

However, with the introduction of RPA in this case, the complete process right from- opening the email, making sense of what the customer needs, logging into the ERP system, to communicating the exact status to the customer- can be automated. In such a case, human intervention would only be necessary for some exceptional circumstances that are beyond the handling potential of a robot.

Supply And Demand Planning

Before automation, supply and demand planning wasn’t exactly a cakewalk for the employees in any organization. They had to seek and gather the required data, combine the data and manage it in presentable formats, analyze exceptions to the data, and then communicate the plan.

RPA, with the help of Machine Learning and Artificial Intelligence, can enable organizations to predict demands and be prepared to cater to the unexpected spikes in demand. By automating a majority of tasks in the supply chain, organizations can now eliminate the possibility of manual errors and make operations efficient, self-driven, and smart.

To put things into perspective, it is wishful to think Robotic Process Automation can automate an entire supply chain at this stage. Because supply chain operations also include the front-desk operations, building and maintaining client relationships, and so on which goes on to show that human intervention is still needed to some extent in a supply chain.

Challenges In RPA Implementation For Supply Chains

According to a report published by Deloitte, there are still quite many challenges organizations face when they begin to strategise RPA or go at it for the first time.

Here are the top 5 challenges the report highlights –

Process Standardisation – Complex processes lead to complexity in the robot. At all stages of the RPA journey, organizations face process standardization as a critical challenge. Complexity in processes hike the costs of implementing RPA while increasing operating costs and business disruption. Organizations, unfortunately, realize that where proper documentation exists, even in those places, the processes are not always well understood.

IT Support – The support and consultancy of an IT organization are vital while strategizing RPA in supply chain. It is essential and advisable to include an IT organization throughout the RPA implementation process.

The Flexibility of Solution – RPA, at the outset, used to be considered a stagnant automation process. It carried a notion that robots will only learn once and that they need to be taught perfect lessons for them to perform later. Thanks to Artificial Intelligence and Machine Learning, solution flexibility can now be added to all stages of automation, though agility is perceived as a challenge.

Stakeholder Expectations – Stakeholders have now started warming up to RPA, but it is a significant challenge to it up the priority ladder, and make sure it does not amount to complete disruption.

Employee Engagement – Organisations that have succeeded in scaling RPA had first engaged their employees and built buy-in to change processes org-wide. Though things vary across organizations, there is a need for enterprises to take steps so that employees accept RPA with minimal resistance.

Final Remarks

For a successful implementation of RPA in Supply Chain, four elements need to be addressed –

• Bots for product movement through the facility
• Sensors to collect data about product quality
• Cognitive learning software systems
• Artificial Intelligence implementation to make the process lucid and flexible

Putting these pieces together is an understandable challenge but strategizing and planning each part of the implementation process & integrating a transformation mindset into everyone in the organization would help to set the tone for change.

If looking to partner with a digital transformation company, enterprises need to take an end-to-end approach with RPA in supply chain implementation to achieve full benefits and realize the anticipated ROI.

Moreover, one-size-fits-all is no model for digital. What organisations need is an IT partner who can tailor RPA implementation services for their needs, keeping into account the present state of affairs and the end goals. Robotic Process Automation in comparison to traditional automation, not only substitutes labor but revamps everything an organization was built upon.

New issues may arise in the service delivery process, and entire operations may get a rework, all for better productivity and efficiency at the end of the day.

Over the years, as RPA has gained significant momentum and has been implemented across a smorgasbord of industries, the questions around its hype, hidden risks and more have been well and truly answered. The results have been very successful and Robotic Process Automation happens to be a rare instance of a technology delivering on its hype.

Early adopters are already gaining remarkable competitive advantage, albeit RPA adoption being at an early stage. If you’re thinking of getting your feet wet, the best time to jump right in is NOW!