Robotic process automation—Demystifying its potential in the supply chain
Deploying minor RPA initiatives in the back office can create major positive impacts that translate into business value across the business-to-business supply chain.
Earl van As is vice president of Marketing & Product Management of ecmarket,
cloud solutions developer of the patent-pending Conexiom sales order and
invoice automation for manufacturers and distributors.
When supply chain professionals hear the term robotic process automation (RPA), an image of robots working on the factory or warehouse floor may be one of the first things that come to mind. They may also think this fairly new concept is just a buzzword. In fact, it is neither.
RPA is software technology that replaces manual and routine operational tasks. Using machine learning to imitate users' repetitive actions, this technology can consistently carry out high-volume tasks that were previously completed by humans. As part of this process, RPA has the capacity to "learn" and adapt as it goes by extracting and interpreting immense amounts of operational data, readjusting as required to perform new assigned prescribed tasks. In this way, it automates repetitive tasks without the need for human intervention or explicitly programmed instructions. For this reason, RPA is most suitable for business processes that are clearly defined, repeatable, and rules-based, making it ideal for optimizing repetitive back-office workflow activities.
As an example, responses to quotes can be automated using RPA. The quotation request is immediately interpreted, referenced against a product and pricing directory, and sent back as a formal quotation in the format desired by the customer. There does not need to be any human validation or intervention.
But RPA's overall impact will be much wider than simply automating repetitive administrative tasks. As an integral part of today's ongoing digital transformation, the technology has the power to redefine business operations and minimize inefficiencies across the business-to-business (B2B) supply chain.
RPA in action Suppliers, manufacturers, and distributors with staff members who are performing high-volume and highly transactional functions should consider capitalizing on process automation. For example, sales and customer service teams are inundated with transactional tasks, such as manually keying in data from purchase orders, on a daily basis. With hundreds, and possibly thousands, of documents to process, they are not maximizing their value as revenue-generating sales employees. Automating such redundant and time-consuming operational tasks can not only free them up for other duties but can also boost efficiency and cut costs.
In another example from an order fulfillment perspective, RPA can accelerate the order-to-cash (O2C) cycle because orders are automatically processed with both speed and complete accuracy. The 100-percent accuracy can be achieved because certain document automation solutions do not rely on optical character recognition (OCR) to capture data, which could result in errors. Non-OCR document automation doesn't simply "estimate" the information on the document via image conversion. True document automation processing technology ensures that data is recognized accurately every time through directly translating the data versus making a guess. From a customer service management standpoint, RPA allows staff to step away from administrative duties, and instead focus on strategic work. This includes improving the customer experience by investing time to build relationships with key customers and showcasing deep product knowledge.
Implementing RPA for the back office can be an ideal launching pad for organizations that are seeking a simpler automation initiative before implementing more complex ones. Beyond the sales team, RPA solutions can be applied to many different functions to deliver a spectrum of improvements to back-office workflow. The benefits can then aggregate and transition into opportunities in other areas of the supply chain:
Minimization of costs and manual errors: Mistakes that cause late payments or line rejections can be expensive to amend. Automating routine tasks means costs associated with manual errors and inconsistencies are bypassed. Administrative labor costs can also be reduced.
Enhanced insights: Data collected from RPA can be analyzed to inform better decision making. For example, regular insights into the volume of items that customers order can help decision makers better manage inventory.
Scalability: The "robotic workforce" can be scaled up or down depending on current workload. This eliminates the need for organizations to hire additional staff for busy seasons. Automation can also ensure that even with higher output demands, quality remains consistent.
Higher return on investment (ROI): Since repetitive tasks are taken care of by automation, employees have time to find new avenues for growth or for maximizing profits from existing channels. Ultimately, RPA allows for more opportunities to realize significant business value.
One thing that may cause supply chain management organizations to hold back on implementing RPA is the common assumption that investing in automation technology involves committing significant time and money in order to complete comprehensive system upgrades. With this in mind, many decision makers prioritize automation of large, revenue-generating processes that they perceive will deliver the highest immediate return on investment, like warehousing and logistics.
However, the agility and flexibility of RPA means that it can be applied to back-office processes where implementation is simple and requires little time. And, as discussed above, deploying RPA doesn't have to be a significant undertaking in order to produce a long-term ROI across many areas in the supply chain.
Efficiency without compromising service Before implementing any disruptive technology, it is important to first consider how it could affect (for better or worse) existing operations. Many companies, however, fail to do so. For instance, companies often implement digital transformations such as artificial intelligence (AI) and the Internet of Things (IoT) with the goal of reducing operational costs and increasing efficiency, without understanding the risk that digitizing certain processes may erode customer service quality and thus compromise customer loyalty. Looking into the future, the successful supply chain organization is one that fully understands the impacts of a solution before adoption.
Although many large initiatives exist to boost the bottom line, integrating RPA into back-office workflow can create tangible ROI for supply chain businesses without putting customer service at risk. Ultimately, RPA can dramatically improve many areas of supply chain management, creating more opportunities for businesses to compete in the era of digital transformation.
Organizations are working to make their supply chains more resilient to disruptions and responsive to abrupt market changes, the firm said in its “2024 ISG Provider Lens Supply Chain Services” report for the U.S. In the wake of major geopolitical events that have affected supply chains, including international conflicts and the COVID-19 pandemic, companies are seeking to prevent or quickly bounce back from supply or demand shocks.
U.S. companies in particular have been especially fast to adopt digital supply chains, due to lighter regulation in the country and a higher willingness to take technology risks, ISG says. Many U.S. firms are also undertaking digital transformation as they shift from global to regional or local supply chains to reduce the risk of future disruptions.
A top goal for U.S. enterprises is aiming for more real-time insights and data-driven decision-making, prompting them to clean up and integrate data from throughout their supply chains, including from both internal systems and external suppliers, ISG says. End-to-end visibility and process orchestration could improve supply and demand forecasts, order fulfilment and profitability. Providers are helping clients carry out this major transition, usually in one part of the supply chain at a time.
“Cost is still a concern for supply chains, but capability is gaining importance,” Bob Krohn, partner, manufacturing, for ISG, said in a release. “Service providers are stepping up to help enterprises implement systems that meet their unique requirements.”
Online merchants should consider seven key factors about American consumers in order to optimize their sales and operations this holiday season, according to a report from DHL eCommerce.
First, many of the most powerful sales platforms are marketplaces. With nearly universal appeal, 99% of U.S. shoppers buy from marketplaces, ranked in popularity from Amazon (92%) to Walmart (68%), eBay (47%), Temu (32%), Etsy (28%), and Shein (21%).
Second, they use them often, with 61% of American shoppers buying online at least once a week. Among the most popular items are online clothing and footwear (63%), followed by consumer electronics (33%) and health supplements (30%).
Third, delivery is a crucial aspect of making the sale. Fully 94% of U.S. shoppers say delivery options influence where they shop online, and 45% of consumers abandon their baskets if their preferred delivery option is not offered.
That finding meshes with another report released this week, as a white paper from FedEx Corp. and Morning Consult said that 75% of consumers prioritize free shipping over fast shipping. Over half of those surveyed (57%) prioritize free shipping when making an online purchase, even more than finding the best prices (54%). In fact, 81% of shoppers are willing to increase their spending to meet a retailer’s free shipping threshold, FedEx said.
In additional findings from DHL, the Weston, Florida-based company found:
43% of Americans have an online shopping subscription, with pet food subscriptions being particularly popular (44% compared to 25% globally). Social Media Influence:
61% of shoppers use social media for shopping inspiration, and 26% have made a purchase directly on a social platform.
37% of Americans buy from online retailers in other countries, with 70% doing so at least once a month. Of the 49% of Americans who buy from abroad, most shop from China (64%), followed by the U.K. (29%), France (23%), Canada (15%), and Germany (13%).
While 58% of shoppers say sustainability is important, they are not necessarily willing to pay more for sustainable delivery options.
Gulf Coast businesses in Louisiana and Texas are keeping a watchful eye on the latest storm to emerge from the Gulf Of Mexico this week, as Hurricane Rafael nears Cuba.
The category 2 storm’s edges could also brush Florida as it heads northwest, causing tropical storm force winds in the lower and middle Florida keys. However, the weather agency said it is too soon to forecast Rafael’s impact on the U.S. western Gulf Coast.
In the face of campaign pledges by Donald Trump to boost tariffs on imports, many U.S. business interests are pushing back on that policy plan following Trump’s election yesterday as president-elect.
U.S. firms are already rushing to import goods before the promised tariff increases take effect, to avoid potential cost increases. That’s because tariffs are paid by the domestic companies that order the goods, not by the foreign nation that makes them.
That dynamic would likely increase prices for U.S. consumers as importers pass along the extra cost in the form of price hikes, according to an analysis by the National Retail Federation (NRF). Specifically, Trump’s tariff plan would boost prices in six consumer product categories: apparel, toys, furniture, household appliances, footwear, and travel goods. “Retailers rely heavily on imported products and manufacturing components so that they can offer their customers a variety of products at affordable prices,” NRF Vice President of Supply Chain and Customs Policy Jonathan Gold said in a release. “A tariff is a tax paid by the U.S. importer, not a foreign country or the exporter. This tax ultimately comes out of consumers’ pockets through higher prices.”
The rush to avoid those swollen costs can already be measured in the form of rising rates for transporting ocean freight, as companies start buffering their inventories before the new administration officially announces tariff hikes. Transpacific rates are still $1,000/FEU or more above their April lows, showing increased ocean volumes and climbing rates generated by shippers’ concerns about supply chain disruptions including port strikes and the Trump tariff increases, supply chain visibility provider Freightos said in an analysis. "The Trump win may start shaking up supply chains even before he takes office. Just the anticipation of higher tariffs may lead importers to pull forward shipments, creating a preemptive freight frenzy," Judah Levine, Head of Research at Freightos, said in a release. “Frontloading will cause freight rates to feel the heat as importers race to dodge the extra costs, similar to what took place with Trump’s tariffs on Chinese goods in 2018 and 2019."
Another group sounding a note of caution about international trade developments was the Global Cold Chain Alliance (GCCA), a trade group which represents some 1,500 member companies in more than 90 countries that provide temperature-controlled warehousing, logistics, and transportation. “We congratulate President Trump on his election. We also congratulate all those who have been elected to the U.S. Senate and House of Representatives,” GCCA President and CEO Sara Stickler said in a statement. “We are also committed to promoting the growth of exports from U.S.-based food production and broader manufacturing sectors. We will engage constructively in the policy discussion about future trade policy and continue to make the case for the importance of maintaining balanced and resilient trade routes for food and other temperature-controlled products across the world.”
Businesses in the European Union (EU) were likewise wary of tariff plans, judging by a statement from the VDMA, a trade group representing 3,600 German and European machinery and equipment manufacturing companies. "Donald Trump's second term will be a greater challenge for German and European industry than his first presidency. We must take his tariff announcements seriously, in particular. This will once again put a noticeable strain on transatlantic trade and investment relations," VDMA Executive Director Thilo Brodtmann said in a statement. “The USA is and will remain the most important export market outside the EU for mechanical and plant engineering from Germany. Our companies offer the products required to implement the re-industrialization of the USA that Donald Trump is striving for. The VDMA's overall outlook for the American market therefore remains positive."
In addition to its flagship Clorox bleach product, Oakland, California-based Clorox manages a diverse catalog of brands including Hidden Valley Ranch, Glad, Pine-Sol, Burt’s Bees, Kingsford, Scoop Away, Fresh Step, 409, Brita, Liquid Plumr, and Tilex.
British carbon emissions reduction platform provider M2030 is designed to help suppliers measure, manage and reduce carbon emissions. The new partnership aims to advance decarbonization throughout Clorox's value chain through the collection of emissions data, jointly identified and defined actions for reduction and continuous upskilling.
The program, which will record key figures on energy, will be gradually rolled out to several suppliers of the company's strategic raw materials and packaging, which collectively represents more than half of Clorox's scope 3 emissions.
M2030 enables suppliers to regularly track and share their progress with other customers using the M2030 platform. Suppliers will also be able to export relevant compatible data for submission to the Carbon Disclosure Project (CDP), a global disclosure system to manage environmental data.
"As part of Clorox's efforts to foster a cleaner world, we have a responsibility to ensure our suppliers are equipped with the capabilities necessary for forging their own sustainability journeys," said Niki King, Chief Sustainability Officer at The Clorox Company. "Climate action is a complex endeavor that requires companies to engage all parts of their supply chain in order to meaningfully reduce their environmental impact."