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Hackernoon logoHow RPA is Helping Supply Chain Management by@anand-mahajan

How RPA is Helping Supply Chain Management

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@anand-mahajanAnand Mahajan

Anand is the Founder of Sphinx Solutions having experience more than a decade.

Logistics and Supply Chain is one of the fastest-growing and the most competitive sectors in the world. Over the years, businesses have invested billions of dollars in scaling up their process and infrastructure to lower the price and look for opportunities to increase efficiency. 

This industry heavily relies on back-office operations to undertake challenging jobs such as scheduling shipments & deliveries, cross-docking, monitoring changes, handling exceptions, and, most important, keeping customers happy. Most manufacturers, retailers, and logistics providers have integrated supply chain management systems, but data integration and process automation remain a challenge for them.

Industries have divided opinions on emerging technologies, but to sustain in such a competitive field, enterprises need to be courageous and adopt new technologies with open arms. Everyone is in search of a solution that minimizes workforce costs and maximizes ROI. That is where RPA comes into the picture. It is not just a buzzword but RPA is projecting to become a trend in businesses to envision how business process automation is managed and delivered effectively. 

What is RPA?

Robotic process automation (RPA) is a software that is programmed to do basic tasks, the same as a human workforce does. The software robot works on an algorithm, business logic, and structured inputs aimed at automating business processes. It takes receive-forms, sends a receipt message, checks the completeness of the form, fills the form, and updates a spreadsheet with the name of the form, the date filed, and other details. RPA tools are designed to reduce the burden of repetitive, simple tasks on employees.

Facts and Stats about RPA

Global Robotic Process Automation software industry has come a long way. In 2016 RPA software purchase amounted to $73 million. It was increased to $113 million in 2017. In the following two years, this amount was $153 million and $192 million. 

HFS research estimates that in 2020 this figure will rise to $232 million and by 2021 to $272 million. These projections indicate that there is a strong demand for RPA tools in the global market. RPA services also became popular among enterprises, and it generated $198 million in 2016. A report predicts that By 2021, this figure is expecting to rise to $952 million.

Researchers at Hadoop predict that the potential savings that companies will experience with RPA by 2025 are between $5 trillion to $7 trillion. Statista believes that the RPA industry will generate business worth $3.1 billion by 2019 and $4.9 billion by 2020. 

According to ISG reports, 70% of businesses implement RPA by 2022 to support their business process activities. Adaptation of RPA has a drastic impact on the supply chain in terms of productivity, efficiency, and accuracy in the Supply Chain and Logistics industry. Among the various benefits that RPA brings to the industry, the prominent ones are real-time inventory visibility and warehouse management. 

Benefits of Implementing RPA

1) Decreased Cost:

Businesses could save approximately 30% when an RPA software replaces a business process performed by a full-time employee.

2) Reduce Operational Risk:

RPA eliminates human errors such as tiredness or lack of knowledge; thus, it helps in reducing the rate of operational risk.

3) Improve Customer Experience and Better Employee Engagement: 

Customer experience and employee engagement are the two crucial aspects of any business. Implementing RPA can allow you to achieve both. On one hand, you allocate your high value and expensive resources on the front line to ensure customer satisfaction. And on the other, RPA does repetitive tasks so that employees can concentrate on more productive tasks that increase engagement amongst them.

4) Improve Scope of Data Collection and Quality: 

RPA helps in reducing manual errors that lead to higher quality data and enables analytics teams to access more data, which leads to more accurate analysis.

5) Easy Integration with Existing IT Infrastructure:  

One of the most significant advantages of RPA is it uses the same systems as your full-time employee uses. Previous business process management solutions and workflow management tools need to integrate with each application they interacted with. RPA uses your existing IT infrastructure.

How RPA is solving problems within the supply chain

1)Email Automation

For any supply chain business, the most crucial task is to maintain constructive communication between customers, suppliers, transport agencies, and manufacturers. An organization always has open communication during critical situations such as shipping delay or difficulty in order fulfillment to build up trust and credibility. For now, most of this task is handled manually. But with RPA, businesses can easily automate this entire communication process. 

RPA also helps in automating email replies when an order has been requested, dispatched, struck midway, delayed, or received. It ensures that all stakeholders of the supply chain can get real-time notifications. Moreover, bots can also read emails, recognize the meaning of the content, and perform necessary actions. It frees not only human resources but also eliminates human errors.

2)Supply and Demand Planning

Before RPA, supply and demand planning wasn’t exactly a cakewalk for any organization. Employees need to collate necessary information from different sources such as from vendors, customers, market intelligence, and sales teams and then represent this data into a standardized format.

With RPA, organizations can automate supply and demand planning. It also helps in gathering and formatting necessary information from various sources, analyzing data exceptions, running data cleansing, as well as transforming data into a plan. After automation, the human role is restricted to handling robot exceptions, running simulations, and running supply and demand meetings to seek plan consensus. 

3) Vendor Selection and Procurement

In selecting and procuring vendors, organizations need to engage in a time consuming manual process. That involved preparing an RFQ (request for quotation) document, communicating with vendors, performing a preliminary analysis of vendor documents, evaluating the vendor credit check, as well as finalizing the vendor selection. With the implementation of RPA, the company can automate vendor selection and procurement processes. Human intervention is limited to the initial phase of work involved, such as specifying the project, generating potential vendor lists, and engaging in site visits and negotiations. Post-automation, supply chain businesses can improve cycle time by 25-50% and processing time by 15-45%.

4) Order Processing and Payments

Order processing in any business consists of three stages that include particular product/service selection, initiate payment, and confirmation of the order. 

In this automation era, there are still some businesses that prefer paperwork to process these transactions but, it leads to erroneous and excessive time consumption. With the help of RPA order processing and payments can be automated. This is done in such a way that transaction data can directly be updated into the company database, payment gateways can process the amount deduction, and a software solution can send out confirmation notification to the user. 

5) Shipment Status Communication

Logistic service centers regularly receive thousands of inquiries from customers about the status of their order parcel. The manual process follows like this- customer service representative has to open each email, open the ERP system to find out shipment record, and then to make a note of the shipment. Finally, they send a shipment status update to customers. 

However, after the introduction of RPA, the complete process right from- opening the email, addressing customer requests, logging into the ERP system, and communicating the exact status of shipment to the customer can be automated. 

Summary

RPA global market could see a 30.14% annual growth rate between 2017 and 2022.  RPA automation has changed the way the Supply Chain industry operated in the past and has improved the capability of the Supply Chain and Logistics sector to innovate. 

Robotic process automation comes with the ability to transform the supply chain and disrupt the way goods are produced, marketed, purchased, and consumed. This investment can provide long-term benefits and improve relations with vendors, clients, and employees. Even the integration of RPA with ERP systems can help supply chain providers to automate most of their work processes. 

In the future, we can see the ocean of opportunities within RPA, which helps to improve ROI and reduce costs for the vast supply chain and logistics industry.





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