“How Robotic Process Automation (RPA) is transforming Supply chain”

In spite of initial upfront investment required to implement RPA technology, the overall increase in productivity & efficiency along with reduction in human errors lead to immense cost savings and improved finances.

CPO Innovation

Robotic Process Automation, is not just a buzz word being used today but is rapidly becoming a trend with a lot of businesses to envision how business process solutions are managed and delivered effectively. In a scenario where work areas are burdened with time-consuming and repetitive processes, it becomes difficult for most businesses to find

  • Ways to improve delivery,
  • Reduce costs,
  • Ensure consistent quality in their work.

It thus becomes crucial that people with roles that require creativity, judgment based decisions and knowledge application spend their energies and precious time on customer centric business processes instead of being bogged down by repeated tasks. This is where Robotic Process Automation (RPA) can empower such staff to blend these two aspect of their role to come to a more efficient work scenario.

Introducing Robotic Process Automation (RPA) does not mean that some robot looking machines will take over the tasks, but it is about smart and intelligent software doing high volume, repeatable tasks that are usually mundane and boring for human beings, at the same time reducing errors. Manual tasks such as data entry, back office tasks which are typically time consuming, repetitive, high in volume are perfect to be handled by Robotic Process Automation (RPA).

Having said that not all Robotic Process Automation (RPA)s are the same. These technologies range from a simple software that sits on a personal computer to a wide range of technological steps that improve the input, flow, transformation and output of data. A very good example of the advanced form of Robotic Process Automation (RPA) is where it is used to enhance the supply chain management process in an organization.

As with any technology, Robotic Process Automation (RPA) comes with its own set of benefits and drawbacks. Major benefits of Robotic Process Automation (RPA) that aid in delivering Profitable Growth are –

  1. Improved Efficiency: With technology managing ordinary, monotonous mundane everyday tasks, the entire process runs promptly and efficiently.
  2. Greater Productivity: The use of Robotic Process Automation (RPA) results in a significant increased output of task. Staff can be freed to apply their experience and skills to more important tasks and projects that drive growth & innovation.
  3. Precise and Errorless Work: Robotic Process Automation (RPA) technology results greater precision in work by eliminating risks associated by human errors.
  4. Cost Savings and improved finances: In spite of the initial upfront investment required to implement Robotic Process Automation (RPA) technology, the overall increase in productivity & efficiency along with reduction in human errors lead to immense cost savings and improved finances.
  5. Greater employee satisfaction: The handover of repetitive, boring, and mundane tasks to Robotic Process Automation (RPA) along with the ability to participate in more important and high-level projects leads to higher overall satisfaction in employees.

Some points that inhibit the introduction of Robotic Process Automation (RPA) are –

  1. High Financial Implication: The high cost of implementing Robotic Process Automation (RPA) technologies along with internal budgetary restrictions are some of the biggest reasons why businesses (especially small & medium scale enterprises and startups) opt not to implement robot process automation.
  2. Lack of Technical Ability: The misconception that to leverage Robotic Process Automation (RPA), the end user must own significant technical knowledge leads to not realizing all the benefits of Robotic Process Automation (RPA).
  3. Fear of Change: Any new technology implies changes and so is the case with Robotic Process Automation (RPA) with the impact being considerable and sometimes disruptive. But this can be overcome with appropriate tool & techniques.
  4. Redundancy: By far the bigger reason for businesses for not choosing Robotic Process Automation (RPA) is the fear that robots will replace workers. However, what many miss is the main purpose of Robotic Process Automation (RPA) being a support to humans in the workplace.

According to the latest report, the global market of IT robotic automation is expected to see growth at a CAGR of about 60.5% between the year 2017 and 2020.

Within the next two years, 72% of companies are expected to be using robotic process automation (RPA) to minimize costs, reduce transaction times, increase productivity, and improve levels of compliance. At least that’s what is suggested by a 2017 study by global technology research firm Information Services Group (ISG), reported on by the Chartered Institute of Procurement and Supply. Moreover, the ISG study shows that the automation technology is allowing for a 43% reduction in resources needed for order-to-cash processes, 34% for invoicing, and 32% for vendor and talent management.

Those are tremendous gains for any company, but especially for those concerned with effective management of their complex supply chains. The uptake of automation within the supply chain has, until recently, been slow. However, the development of new capabilities for automation technologies means that a growing number of companies globally are relying on RPA to streamline the flow of goods on their supply-side and gain a competitive advantage with customers on the demand-side.

But how, more specifically, is the leading technology trend poised to impact supply chain management? What are potential use cases as well as their logistical benefits? What can be expected of software robots in the future? Let’s look at the potential for automation within the supply chain.

Warming up to RPA :

In optimizing their supply chains, companies across many industries — manufacturing, retail, healthcare, and more — have long relied on a range of technologies: TMS (transportation management system), ERP (enterprise resource planning), CRM (customer relationship management), and RFID (radio frequency identification).

Still, automation technologies like RPA have only gradually been adopted within supply chains… until now, that is.

In the very beginning, RPA software robots were unintelligent and lacked the agility required to handle the skill-based, non-standardized interactions of complex supply chains that depended on human intervention. However, continuing advancements in the evolution of the automation technology show great potential for supply chain management. More and more, the incorporation of cognitive and knowledge-based capabilities with RPA is allowing software robots to act like human employees. In fact, intelligent automation is developing as an overlap between cognitive process automation, intelligent computer vision, and intelligent OCR (optical character recognition) to automate beyond tasks based on well-defined business rules and clear instructions for processing inputs.

As part of this, knowledge-based capabilities allow for judgements based on data patterns. Within supply chain management, for example, this level of automation can involve automated delivery delay escalation, customer service bot interactions, and change requests for transport slots. At an even higher level, cognitive automation relies on complex algorithms and pattern recognition guided by self-learning to make predictions and support decision making. With respect to supply chains, cognitive automation can involve the automation of supply/demand balancing as well as vendor selection.

  • Automated supply chains: a use case

As a result of such cognitive augmentation, RPA is being increasingly adopted within the supply chain to mimic the actions of human employees: capturing, replicating, and processing data, communicating with customers, as well as making judgements and learning from past actions. Take, for example, a leading food producer based in Europe looking to streamline its vendor and customer relationships. With the adoption of RPA, the company was able to automate a range of processes on the supply-side and on the customer-facing side.

Vendor selection & procurement.

In selecting and procuring vendors for seeds, fertilizers, and transport materials, the food producer engaged in a highly manual process that involved employees preparing an RFQ (request for quotation) package, communicating to vendors, performing a preliminary analysis of vendor documents, evaluating the vendor and running a credit check, as well as finalizing the vendor selection. Upon implementation of RPA, the company was able to automate the majority of these steps. Human intervention was only required for the preliminary work involved with specifying the project for sourcing, generating a list of potential vendors, and engaging in face-to-face site visits and negotiations. Post-automation, the food producer was able to improve cycle time by 25-50% and processing time by 15-45%.

Shipment status communication

The food producer in question regularly receives inquiries from customers about the status of their order shipment. Prior to automation, shipment status communication was entirely manual: the employee received and opened the customer email as well as opened the shipment system to find the shipment record in ERP. The employee then gathered the necessary information, sent a status update to the customer, and closed the case in the system. RPA, however, was able to take over opening the email system, recognizing text from the customer, logging into the shipping portal, determining the shipment status, replying to the customer, and moving on to the next customer email — with human intervention only being required for exceptions. Post-automation, the food producer was able to eliminate 40-60% of the manual effort required in answering customer status queries.

Supply & demand planning

Planning is a crucial component of the management of any supply chain, especially with regards to predicting future requirements of supply and demand. Prior to automation, such planning was no easy task: Employees were tasked with seeking out and gathering the necessary data–for example, from vendors, customers, market intelligence, as well as the production and sales teams–, combining the collected data into a tandardized format, running simulations, analyzing data exceptions, and confirming and communicating the plan.

With RPA, the company was able to automate the majority of these responsibilities: gathering and merging the necessary information from various sources, running data cleansing tools, as well as transforming the final data into a plan and providing the necessary communication to partners, customers, transporters, and logistics teams. Post automation, the human role was limited to handling robot exceptions, running simulations, and running supply and demand meetings to seek plan consensus. The food producer attained 20-40% improvements in the data collation and admin effort involved with supply and demand planning.

Supply chain 4.0

With RPA, supply chains attain enhanced cycle time and agility, increased capacity and asset efficiency, improved receivables, as well as high levels of supplier, customer, and employee satisfaction. But in addition to recognizing these benefits, it’s also important to acknowledge the foresight that is needed in order to leverage automation successfully at scale. Companies should set up an RPA governance team and steering committee, put thought into process selection, and foster discussions around the redeployment of employees.

  • Dr. Shakti Singh Chauhan