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Robotic Process Automation and the Supply Chain

January 26, 2022

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I suspect robotic process automation (RPA) is not a frequently discussed watercooler topic — and, when it is, the discussion probably involves back office, white collar, swivel chair work. The connection between RPA and supply chain functions may not be clear until you realize just how much paperwork is involved in supply chain transactions. Brian Belcher, Co-founder and Chief Operating Officer of Vector, asks, “When will supply chains finally move on from paper?”[1] Good question. Besides being a pain in the neck, Belcher believes paper is bad for business. “In an industry inundated with paper,” he writes, “it’s a mystery how operations will continue to efficiently expand. … Paper costs the supply-chain industry upwards of $3 billion every year (not counting the additional price tag of paper, ink and printing). In addition, paper results in a lack of visibility, efficiency and sustainability, as well as undermining the safety of drivers. With the cons of paper more than outweighing the pros, it’s time the supply chain underwent an industry-wide transformation.” Of course, the term “paperwork” is a euphemism for recording transactions be they digital or physical. Even digital paperwork can be time-consuming and error-prone. Which is why robotic process automation can play an important supply chain role.

 

What is RPA?

 

Tech writer Elizabeth Quirk writes, “Robotic Process Automation is defined as the application of technology that allows employees in a company to configure computer software or a ‘robot’ to capture and interpret existing applications for processing a transaction, manipulating data, triggering responses and communicating with other digital systems.”[2] In other words, RPA does the busy work so employees can focus on more important tasks. Quirk cites a 2017 study published by the Information Services Group (ISG) that concluded, “This kind of automation technology is allowing for a 43 percent reduction in resources needed for order-to-cash processes, 34 percent for invoicing, and 32 percent for vendor and talent management.” She adds, “These numbers prove to be a huge gain for those concerned with effective management of their supply chains — like manufacturing and distribution companies. The adoption of automation within supply chain management (until recently) has been slow, but with the development of new automation innovations, a growing number of companies are beginning to rely on RPA to streamline the flow of goods on their supply chains and gain a competitive advantage with customers.”

 

Peter Bendor-Samuel (@bendor_samuel), founder and CEO of Everest Group, notes that much of the work that can be handled by RPA processes has, in the past, been outsourced. RPA can bring those processes back in-house. He explains, “Robotic Process Automation is a powerful set of digital tools that is poised to have a dramatic effect on the services industry, particularly the business process industry. RPA tools automate well-understood processes currently being done by hand and that have been outsourced.”[3] He also believes similar in-house work will be automated. He predicts, “Companies will inevitably apply RPA to work that is not currently outsourced. This will radically change the supply chain of services.”

 

Supply Chain Applications

 

Mitul Makadia (@mitulmakadia), founder and CEO of Maruti Techlabs, insists two of the key challenges still confronting many supply chain management systems are end-to-end data integration and process automation.[4] He explains, “[There is an] ongoing dependence on spreadsheets, workflows and archaic processes that tend to involve a ton of ‘swivel chair’ work like jumping from one app to another, copy[ing and] pasting data. … These manual, mundane and repetitive tasks are not only inefficient but play a major role in slowing operations and tying down resources that can focus on more mission-critical tasks and contribute in a far more creative manner.” Makadia notes that supply chain professionals are well aware of these challenges and they are beginning to address them. He cites a research report by Deloitte that concluded, “About 64% of companies have embarked on the journey to implement Robotic Process Automation in order to automate support tasks.” Three specific areas where RPA can improve processes are:

 

• Procurement. Marisa Brown (@MB_APQC), senior principal research lead for supply chain management for APQC, writes, “By taking over the performance of routine and highly manual tasks, RPA frees time for humans to focus on work that truly drives value and innovation in procurement and beyond. There are at least four reasons why RPA is a compelling option to automate procurement processes: (1) RPA is quicker and cheaper to implement than many ERP projects (and requires less IT support). (2) RPA provides an ROI of 30-200% in its first year. (3) Chatbots can handle complex verbal information. And (4) RPA allows organizations to shift focus to more valuable procurement activities while eliminating errors from transactional work.”[5]

 

• Logistics. RPA is often described as a gateway to cognitive technologies (aka artificial intelligence). The staff at GlobalTranz notes, “[In an automated logistics environment, RPA complements] artificial intelligence and machine learning [to] work behind the scenes within software allowing the virtual processes within a transportation management system (TMS) and other supply chain systems of record to run more efficiently and proactively. … Essentially, TMS users can help to avoid an unexpected shipping capacity crunch by letting automation handle the management, diverting more time to focus on serving customers and less time spent chasing redundancies.”[6]

 

• Order Processing and Payments. Naveen Joshi, founder and CEO of Allerin, notes, “A research report from Aberdeen Group states that it takes 4.1 to 16.3 days to process an invoice from receipt to approval. The regular follow-ups until invoice processing is time-intensive and actually quite boring. With RPA, the logistics company can carry out this important function conveniently and accurately.”[7] Makadia adds, “There are still businesses 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 an email and text message confirmations for the placement of order.”

 

Concluding Thoughts

 

Bendor-Samuel concludes, “Although RPA technology is relatively easy and inexpensive to implement, it’s far more than a labor-to-technology substitution. Because digital transformation takes and end-to-end approach in business processes, it opens new issues around how processes should be designed. That leads to new issues in service delivery. In short: RPA adoption could change everything about services supply chains and delivering value.” Besides the specific uses of RPA in the supply chain, Joshi notes there are a few overarching advantages provided by RPA. They include:

 

• High-Level Accuracy. “The rule-based software robots hold tremendous power and potential to perform the given tasks with near-zero probability of error. With humans going out of the picture, there will be no real need for re-work. The assigned work will be executed with a 100 percent accuracy, which means that the quality of work will always be high.

 

• Improved Process Cycle Time. “It is undeniable that automation tools can perform any given task quicker than humans. Likewise, RPA executes the mundane, manual tasks faster, thereby helping organizations to reduce their process cycle time and increase their work efficiency.”

 

• Increased Revenue Generation. “With reduced process cycle time, improved accuracy, and enhanced operational efficiency, employees will be left with more time to take up strategic roles. Organizations will then witness a hike in employee productivity. With work getting done on time, companies will be able to meet customer expectations and increase their satisfaction levels. And as a result, more and more sales will be generated. And an increase in the sales will, naturally, help organizations to gain more revenues and profits.”

 

It’s little wonder supply chain professionals are seriously investigating how RPA can be used to make their operations run more efficiently and effectively. On occasion, organizations will find it helpful to go beyond RPA. Michael Berthold (@MRBerthold), CEO and co-founder at KNIME, notes, “Current trends are indicating that there’s much more that can be done with RPA — especially when combined with data science.”[8] He adds, “In the more advanced cases, RPA programs are invoking machine learning models and adding the resulting predictions to the process automation. Rather than simply help speed up a process, data science can be used inside the process to execute tasks more intelligently.”

 

At Enterra Solutions®, we call AI-enhanced RPA Cognitive Process Automation™ (CPA). Cognitive Process Automation goes beyond the accomplishment of routine tasks. CPA has the potential not only to automate, but to improve processes by dynamically processing and executing subtle decisions as if they were made by the best human expert. We are also advancing Autonomous Decision Science™ (ADS™), which combines mathematical computation with semantic reasoning and symbolic logic. The Enterra ADS™ platform analyzes data, automatically generates insights, makes decisions with the subtlety and judgment of an expert, and executes those decisions at machine speed with machine reliability. Recent supply chain snarls are evidence that processes need to improve and RPA and CPA can help.

 

Footnotes
[1] Brian Belcher, “When Will Supply Chains Finally Move on From Paper?” SupplyChainBrain, 31 March 2021.
[2] Elizabeth Quirk, “Robotic Process Automation: The Secret to Supply Chain Management Success,” Solutions Review, 9 March 2018.
[3] Peter Bendor-Samuel, “Robotic process automation is reworking supply chains,” CIO United States, 1 May 2018.
[4] Mitul Makadia, “RPA – The Key to an Automated, Streamlined and Cost Effective Supply Chain Management,” Business to Community, 15 May 2019.
[5] Marisa Brown, “Robotic Process Automation for Procurement,” Supply & Demand Chain Executive, 8 March 2021.
[6] Staff, “Automation in Logistics: Using RPA to Handle More Freight Quotes in Anticipation of Peak Season,” GlobalTranz Blog, 26 August 2020
[7] Naveen Joshi, “Exploring the Benefits and Potential of Robotic Process Automation in Logistics,” BBN Times, 4 December 2020.
[8] Michael Berthold, “When RPA meets data science,” InfoWorld, 17 August 2021.

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