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Robotic Process Automation in Supply Chain

Robotic Process Automation (RPA) refers to process automation that combines process steps with decision models or business rules with little to no human oversight. It is typically applied to high-volume transactional processes with limited variation and clearly outlined business rules or decision models.

Today’s article is the fifth part in a series featuring surveys from APQC on supply chain topics including ESG in supply chain, environmental sustainability,  last miledigital transformation. APQC conducts research on supply chain and logistics to help organizations assess the performance of their own processes and functions compared to their peers. In May 2024, APQC gathered insights from supply chain professionals on Robotic Process Automation in supply chain. The report, which comprised 310 respondents, provides a cross-industry snapshot of the current state of RPA in supply chain, including the likelihood of implementation as well as the benefits and obstacles surrounding RPA deployment.

Robotic Process Automation Deployment

According to the APQC data, organizations are exploring Robotic Process Automation across a number of supply chain areas, including supply chain planning, sourcing and procurement, logistics and warehousing, and manufacturing. Like any technology, RPA has different levels of penetration across each of these areas. Compared to RPA implementation in other areas, organizations are more likely to have implemented RPA in Logistics and Warehousing (24 percent). Nearly two-thirds (66 percent) are very or extremely likely to implement RPA in this area. RPA is critical in Logistics and Warehousing as it enables the automation of shipment scheduling and tracking, data management, inventory management, and order fulfillment.

Survey respondents are second most likely to have implemented Robotic Process Automation in sourcing and procurement (20 percent). Additionally, over three-fifths (62 percent) have expressed high interest in RPA implementation in this area. Some use cases of RPA in sourcing and procurement include automating contract management and supplier onboarding. RPA in supply chain planning (17 percent) and manufacturing (15 percent) are less penetrated markets, however, for both areas, nearly 70 percent of respondents very or extremely likely to implement RPA.

Robotic Process Automation: Benefits and Obstacles

There are a number of key benefits and obstacles when it comes to implementing Robotic Process Automation. Quality improvement (61 percent) and saving time on repetitive tasks (56 percent) are the top benefits of widespread deployment of RPA in supply chains. Some respondents also see value in RPA in reducing risk, increasing capacity without increasing headcount, streamlining processes, providing competitive advantage, and improving customer service.

Many technologies are implemented as a source of cost cutting. And while RPA may help to cut costs for an organization, it is not a top benefit for survey respondents (just 35 percent). Reallocating employees to higher value tasks is also not a primary benefit (34 percent) identified by respondents.

On the other end of the benefits spectrum are the major obstacles to a Robotic Process Automation deployment. Considering that cost cutting is at the bottom of the list for benefits, it is not surprising that the majority of the respondents (54 percent) see the cost of implementing RPA as a top barrier to its widespread deployment in supply chains. To tackle the high implementation cost, organizations can prioritize automating processes that yield high return on investment (ROI), such as those that are high in volume, rule-based, and repetitive in nature.

Other top obstacles include technology limitations (43 percent), employee resistance 40 percent), the need to streamline or transform processes before automation (40 percent), processes are already too customized or variable for automation (34 percent), a lack of pre-existing foundation (33 percent), a lack of compelling return on investment (28 percent), and no guiding strategy or business case for automation efforts (26 percent).

Final Thought

Robotic Process Automation deployment in supply chain can bring about many benefits for organizations, with quality improvement (e.g., reduce errors or rework) and saving time on repetitive tasks being the top benefits of deployment. Organizations have prioritized RPA implementations within logistics and warehousing, as it enables the automation of shipment scheduling and tracking, data management, inventory management, and order fulfillment. Supply chain planning, sourcing and procurement, and manufacturing all have a lot of interest for future deployment.

The post Robotic Process Automation in Supply Chain appeared first on Logistics Viewpoints.

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