5 min read

RPA in supply chain: revolutionizing logistics

Logistiscs

Trends

The supply chain serves as an essential link between manufacturers and consumers. In their pursuit of efficiency and smooth workflows, industries are turning to robotic process automation (RPA) as a game-changing element in logistics. RPA, which uses smart bots to handle monotonous tasks, is altering how organizations handle their supply chains.

Supply chain management has historically faced challenges due to manual processes, often resulting in delays, mistakes, and inefficiency. Yet, with the introduction of RPA, there’s a significant shift occurring. This technology is taking over routine activities like data entry, tracking orders, and processing invoices. In this blog post, we explore the profound effects of RPA on supply chain logistics, examining its real benefits and groundbreaking uses that are transforming the journey of products from factories to final users.

RPA in supply chain management: introduction

New technologies naturally attract businesses eager to understand their importance and come up with practical methods for utilizing them. This was certainly the case with RPA.

Robotic process automation is a software technology that harnesses artificial intelligence and machine learning to simplify monotonous and manual tasks such as entering data, generating reports, and managing inventory.

Businesses that implement RPA can automate various aspects of their supply chain operations. This results in increased efficiency and a reduced need for human intervention. As a consequence, the likelihood of mistakes decreases, and the speed of completing tasks increases.

>70%

of professionals find RPA critical for optimizing supply chain operations.

≈30%

in operational expense savings, companies implementing RPA report cost benefits.

≈40%

increase in customer satisfaction thanks to RPA implementation in supply chain management.

Drive success in supply chain with RPA innovation

RPA in supply chain management: use cases

Although RPA is in the early stages of adoption within supply chain operations, businesses are rapidly embracing automation to streamline and enhance the efficiency of their supply chains.

Order processing automation

With RPA in play, handling orders becomes a breeze. Incorporating RPA into the system automates the entire order processing journey – from double-checking customer details to promptly updating inventory levels and swiftly generating shipping labels. The RPA systems minimize the reliance on manual data entry and significantly accelerate the order fulfillment process.

Inventory management

RPA acts like a master controller for inventory. It monitors stock levels and automatically places new orders when they fall below a set threshold. This saves time and reduces human error risks.

Supplier management

RPA is a valuable tool for enhancing supplier relations. It handles complex tasks such as contract negotiations, invoice processing, and supplier performance tracking. This automation improves time management and accuracy in supplier dealings, boosting overall operational efficiency.

Shipment tracking

In supply chain management, RPA assumes the role of a proficient overseer. It systematically automates the process of tracking shipments and furnishing customers with timely updates on their orders. The implementation of RPA into supply chain systems ensures a comprehensive view of your supply chain and helps identify and mitigate any potential challenges.

Invoice processing

Integrating RPA into invoice processing marks a significant leap forward in operational efficiency. By leveraging intelligent automation, organizations streamline the traditionally labor-intensive task of handling invoices. The seamless incorporation of RPA enables organizations to reallocate human resources strategically, fostering a more agile and responsive financial workflow.

Demand forecasting

Precision in demand planning is critical. Through RPA technology implementation, intelligent bots collect and refine essential data from diverse sources such as sales reports, emails, and vendor databases. This aggregation guarantees accurate insights and optimizes forecasting.

Returns processing

RPA transforms retail returns by streamlining operations, analyzing data for efficient processing, enhancing communication with customers, preventing fraud, and ensuring timely refunds. It also identifies policy abuses, tracks deadlines, and supports accounting with automated document handling.

Data analytics and reporting

Data analytics and reporting form the backbone of informed decision-making within organizations. The integration of RPA in data analytics and reporting propels supply chain management towards a more agile and informed future, enabling organizations to adapt swiftly to evolving market dynamics.

Benefits of RPA in supply chain

RPA technology has the potential to transform supply chain management processes and reshape the traditional landscape of operational efficiency.

Enhanced accuracy

Firstly, RPA enhances the precision of supply chain operations. By automating tasks prone to human error, like order management and inventory control, it ensures accurate data handling. This 24/7 operational reliability drastically reduces mistakes, creating a more trustworthy and efficient supply chain environment.

Increased efficiency

When it comes to efficiency, RPA is a game-changer. Supply chain managers typically juggle numerous time-consuming tasks. RPA applications work at a faster rate, cutting down data management time by up to 50%. This significant reduction in workload leads to enhanced overall business efficiency.

Cost reduction

RPA systems effectively perform tasks, thereby minimizing the likelihood of errors and eliminating the necessity for repetitive human actions. Consequently, this accelerates task completion and lowers costs, as there is no requirement to hire additional team members for task execution.

Valuable insights

RPA plays a pivotal role in extracting valuable insights from modern supply chains. With IoT sensors integrated into systems, businesses can access a wealth of data. While automating data collection is straightforward, transforming this data into actionable insights is where RPA becomes indispensable, though it’s not the only tool required.

Streamlined processes

A sudden increase in customer orders may require more production capacity in business. Instead of hiring temporary workers and incurring high costs, consider using scalable RPA systems. They can handle large work volumes efficiently, facilitating processes without substantial financial investments.

Improved customer satisfaction

Last but not least, RPA revolutionizes customer communication by automating updates through SMS or email. This keeps customers well-informed and reduces the workload on customer service teams. As a result, they can focus on more complex tasks, thereby improving the overall service experience.

“RPA serves as a driving force for process improvement and task automation, covering everything from order processing to inventory management. The adoption of RPA software in the supply chain marks a significant shift towards improved visibility, precision, and speed. These elements are essential for attaining excellence in logistics. This integration acts as a vital link, bridging the gap between conventional logistics methods and the growing needs of today’s supply chain landscape.”

Alina Filatova

Head of BA Department at Innowise

Real-life examples of RPA in supply chain management

Automation stands out as a significant game-changer, and Walmart’s use of it is a prime example. The retail giant employs over 500 bots to handle a variety of tasks, from responding to employee questions to reviewing audit documents and monitoring inventory flow. This strategy extends beyond merely identifying slow-selling items and excess stock. Even minor adjustments in their processes have a considerable impact, given Walmart’s scale of handling over 200 million Account Receivables and managing payrolls for more than 2.3 million employees. For Walmart, the shift to RPA was not solely about enhancing efficiency; it also proved to be a major move in cutting costs.

Similarly, UPS Europe demonstrates the power of automation with an Automated Storage and Retrieval System (ASRS) in a Dutch fulfillment center. AutoStore technology boosts storage capacity by 400%, optimizing space and reducing physical strain on employees. Launched in May 2020, this system enhances efficiency, earns UPS recognition for innovation, and exemplifies the success of robotic process automation in supply chain management. Like Walmart, the streamlined order fulfillment process showcases tangible benefits and underscores UPS’s commitment to technological advancement in global logistics.

FedEx Express, the world’s leading express transportation company, has integrated RPA into its supply chain operations in Singapore. Teaming up with bluPort, Parcel Santa, and Park N Parcel, FedEx now offers self-collection services for packages through strategically positioned lockers and collection points. Leveraging the FedEx Delivery Manager International (FDMI) platform and RPA technology, customers can conveniently opt for their preferred collection point, mitigating the environmental impact of last-mile delivery. This initiative aligns with Singapore’s Urban Logistics Initiative, illustrating how the application of RPA in logistics enhances efficiency, diminishes carbon footprint, and elevates the customer experience within the burgeoning e-commerce sector.

Echoing these innovations, Procter & Gamble showcases effective robotic process automation in supply chain optimization. Unlocking $5 billion through strategic finance, P&G achieved a negative working capital like Amazon, with a cash conversion cycle of -29 days. The freed funds drive RPA deployment, reducing non-manufacturing costs. Like FedEx and UPS, P&G uses workforce downsizing and RPA to identify supply chain duplications, yielding savings in manufacturing, inventory, and logistics. CFO Jon Moeller emphasizes competitive advantages, envisioning rapid innovation and enhanced service. P&G’s success, paralleling Walmart’s, prompts competitors like Kimberly Clark to pursue similar strategies, intensifying restructuring for significant savings.

Improve your supply chain productivity with RPA

RPA in supply chain implementation costs

The cost of RPA varies depending on the scale and requirements of the organization. Deloitte suggests that small and medium-sized enterprises might incur expenses ranging from $4,000 to $15,000 for a single bot.

In contrast, large enterprise organizations may invest up to $20 million for a comprehensive RPA solution comprising up to 500 robots. Such a deployment has the potential to replace over 1,000 employees and yield savings exceeding $100 million.

We can provide a more precise cost estimate through direct communication with you, taking into account the following factors:

Project complexity and scope

Team size and composition

Project duration

Tech stack

Future trends in RPA and supply chain

The global pandemic exacerbated shortages in workers and truck drivers, with projections indicating a truck driver deficit exceeding 160,000 by 2030, up from 80,000 in 2021. These challenges, along with rising freight costs and ongoing supply chain disruptions, are pushing businesses to increasingly rely on technology and strategic overhaul to tackle present difficulties and future uncertainties.

Adapting to a post-pandemic world

Industries worldwide are adapting to the aftermath of the pandemic by reevaluating strategies. This shift towards reevaluation focuses on uncovering hidden risks, enhancing flexibility, and reassessing vulnerabilities in supply chains.

Leveraging AI and IoT

As part of this strategic shift, IoT and AI are being utilized to enhance productivity and reduce time and costs. AI automates decision-making processes, connecting seamlessly with the strategic focus by allowing managers to concentrate on higher-level tasks, while IoT aids in the real-time monitoring of resources and shipments.

Embracing digital supply chain twins

In line with the move towards advanced technologies like AI and IoT, real-time data has become crucial in the era of social distancing. Digital supply chain twins, which replicate processes digitally and utilize IoT devices, provide immediate insights, furthering the impact of AI and IoT in various industries beyond supply chain management.

The rise of supply chain as a service (SCaaS)

With the increasing complexity of value chains, and the integration of AI, IoT, and digital twins, managing all processes in-house is becoming impractical. Companies are turning to SCaaS, outsourcing critical processes to specialized providers, which aligns with the overall trend of technological adaptation for better customer service, increased productivity, and cost reduction.

Shift to cloud-based solutions

These evolving supply chain strategies are further supported by the growing popularity of cloud-based solutions, offering functionality and security on par with on-premise options. The market for these solutions is projected to reach nearly $45.2 billion by 2027, reflecting a broader transformation in mindset regarding control and focusing on benefits like speed of implementation and cost savings.

Robots and automation in focus

Complementing the trend towards digital and cloud solutions, autonomous mobile robots (AMRs) are gaining prominence for their remote activation and integration benefits. The global robotics market is expected to reach $91.8 billion by 2026, indicating a shift towards automation that emphasizes workforce upskilling and compatibility with warehouse management systems, rather than merely replacing jobs.

Blockchain for enhanced transparency

Finally, tying into the overarching theme of technological innovation for improved efficiency and transparency, the demand for increased visibility in supply chains is driving the adoption of blockchain technology. It ensures end-to-end transparency, linking back to the goals of enhancing security and reducing paperwork, and is projected to reach $3,272 million globally by 2026.

FAQ

How does RPA improve supply chain accuracy?

RPA enhances supply chain accuracy by automating tasks such as data entry, order processing, and inventory monitoring. Through real-time tracking and proactive alerts, RPA minimizes errors and ensures timely deliveries, while also optimizing inventory levels. Examples, such as a retailer reducing data entry errors by 90% and a logistics provider improving shipment tracking accuracy by 95%, highlight RPA’s tangible impact on efficiency and accuracy in the supply chain.

Can RPA be integrated with existing supply chain systems?

Yes! RPA seamlessly integrates with existing supply chain systems, automating tasks like order processing, inventory management, and customer service. This integration reduces costs, enhances efficiency and accuracy, and provides real-time insights, improving overall visibility and agility in responding to market changes.

What are the cost-saving benefits of implementing RPA in the supply chain?

Implementing RPA in the supply chain brings substantial cost savings by automating repetitive tasks, such as order processing and fulfillment, procurement, inventory management, and customer service. RPA accelerates processes up to 10 times faster than humans, reducing labor and time costs. It streamlines procurement, minimizes errors, and optimizes inventory levels, lowering carrying costs. Automated customer service improves satisfaction and response times. RPA also ensures compliance, enhances logistics efficiency, and provides real-time insights for better decision-making.

Are RPA bots capable of handling complex supply chain processes?

Certainly! The speed, accuracy, and scalability of RPA bots make them versatile for automating various supply chain functions, from procurement to production planning. Major logistics companies like UPS, FedEx, and C.H. Robinson are leveraging RPA to optimize critical processes, showcasing its effectiveness in enhancing overall operational efficiency.

How can RPA contribute to data-driven decision-making in the supply chain?

RPA enhances data-driven decision-making in the supply chain by automating data collection, cleansing, and analysis. It ensures accuracy and real-time updates by aggregating information from diverse sources, cleans datasets for improved analysis, and generates reports for insights into supply chain performance. Additionally, RPA enables predictive analytics, forecasting demand, optimizing inventory, and mitigating risks. Its real-time decision support empowers managers to make informed choices swiftly. By automating tasks like supplier performance monitoring and inventory reporting, RPA streamlines operations, allowing managers to focus on strategic decisions, ultimately improving efficiency and profitability in the supply chain.

Dmitry Nazarevich CTO

Date: Jan 18, 2024

Dmitry Nazarevich CTO

Date: Jan 18, 2024

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