Managing inventory in retail is challenging, as it requires gathering and working with data from multiple sources, not only internal but also from suppliers and other business partners. With growing demand and disturbance across supply chains, retailers are struggling to keep track of the amount, location, and pricing of products available for their customers. In this article, we will show examples of how can Robotic Process Automation (RPA) be used to streamline inventory management in the retail industry.
RPA, or Robotic Process Automation, is the name given to software that can perform tasks at the user interface (UI) level. Robots can do anything that employees do and free them from tedious, mundane, and time-consuming tasks. Because RPA is great for repetitive tasks that have to follow a specific set of rules, there are multiple areas of business where these robots thrive. As increasing use is being made of AI, companies utilize robots to automate both front-office and back-office tasks.
Enterprises in multiple industries are benefiting from RPA by accelerating back-end processes. According to Office Worker Survey, conducted by UiPath, 67% of global office workers feel crushed by doing repetitive tasks. They would like to automate many of them, including e-mails, data input, creating datasets, scheduling calls and meetings.
Robots help fill out records and documents and can be used to:
The implementation of RPA requires preparation. Before replacing human workers with bots, it is essential to analyze the development model and the areas where RPA will optimize costs and working time to deliver the desired business results.
If you want to know more about RPA and its implementation, read our article “What is robotic process automation (RPA)?”.
Through inventory management retailers ensure that they will have enough products to sell, without risk of running out of stock or carrying excess supply. Effective inventory management allows to keep costs low and understand sales patterns better, effectively supporting also supply forecasting.
Retailers are trying to gather and analyze information related to storing and ordering products, such as:
Without inventory management, it’s impossible to assure that shop will be most profitable. As a manual gathering of data is ineffective, retailers need to use dedicated software to speed up the process. But in many cases buying such additional software is expensive and requires additional programming works to integrate it with systems that the company is already using.
Robotic Process Automation software can be a solution for companies that want to automate inventory management, but struggle to find a tool that would be a perfect fit for their needs.
By implementing RPA software, retailers can benefit not only through accurate inventory level tracing but also in demand and supply forecasting, as well as by streamlining communication, related to inventory management, between all departments and suppliers.
With proper process discovery, mapping, and thoughtful implementation of RPA software, it can be really valuable to any retail company. The uses of RPA robots are not limited only to monitoring inventory, generating notifications, or transferring data between systems. It can be also supported by AI and Machine Learning capabilities, to track patterns and help to avoid problems with an inventory shortage.
Some specific use cases of Robotic Process Automation (RPA) software in retail inventory management include:
Deadstock, known also as a dead inventory is a name given to items that retailers have failed to sell and has little likelihood of selling in the future. Those products, if not properly tracked and pushed out of inventory, can pile up and take up space on the shelves or in the warehouse.
Deadstock is a common problem for retailers, its main causes are:
An example of good use of Robotic Process Automation software in retail to track deadstock can be Walmart. This enterprise has deployed up to date over 500 bots that are used, among others, to track the inventory flow, to identify slow-moving items and deadstock.
RPA can be used to limit deadstock by:
If a retailer has a problem with the same items frequently becoming a deadstock, RPA can be used also to push out such products out of inventory, by automating more processes. Robots can be used not only to notify about the problem but also in the sales process to help with discounting problematic items or bundling them, so retailers can get rid of them faster. As automation with RPA is extremely flexible, developers can set up robots to trigger certain actions when specific conditions are met, and help to get rid of deadstock automatically.
Stockouts called also out-of-stock (OOS) are problematic for retailers as they mean lost sales until the next batch of products arrives. This has a huge impact on customer satisfaction, and while in case of convenient shop location they might return to it in the future, they will most likely not wait for the product to be restocked and will buy it from the competition.
According to Harvard Business School research between 21-43% of customers will buy desired items in another store:
RPA can help to limit stockouts in retail through:
It all comes down to being able to capture data on time to use them for supply planning - through the use of RPA, combined with OCR (to digitalize historical, paper documents about sales) and AI for forecasting, retailers are able to determine re-order points and use automation software to proceed with ordering the right merchandise when necessary.
Lead time in retail is also called a sum of the supply delay - a certain amount of time between ordering merchandise and its arrival in the warehouse. Depending on the complexity of the supply chain lead time can have a major impact on business effectiveness.
For a retailer it would be perfect to be able to rely on local suppliers, allowing them to resupply fast. Unfortunately, most products are not manufactured locally and retailers that work with hundreds or thousands of suppliers across the world have to deal with ordering processes that are far from perfect.
Robotic Process Automation software can help retailers with reducing lead times, and because it does not require any programming to be implemented it can be used quickly and effectively.
RPA use cases may include:
With a properly implemented Robotic Process Automation software entire process, from the first automatic alert about low stock level, to place a new order, accepting it on the other end, and fulfillment can be done without a need of human interaction.
Retailers that are able to track orders throughout the supply chain, from the manufacturer to the distribution center and finally to the store can avoid inventory shortages and bottlenecks and display accurate information about availability.
As for now, many retailers struggle to get a clear picture of their supply chains. According to a study conducted by logistics operator GEODIS and Accenture Interactive, 40% of European brands say that their analytical capabilities related to supply chain visibility are too rudimentary, generating data in a fragmented way, often manually and without clear governance.
RPA can help in solving the most frequently mentioned challenges in supply chain visibility, through:
Robotic Process Automation (RPA) software can help in faster, easier and precise communication between companies. Because data about shipment status can be obtained from partners in real-time, retailers can have a better overview of when and which items will be delivered, so they can coordinate their activities accordingly.
An inventory discrepancy is a common problem for retailers, and there are various reasons why actual on-hand inventory stock differs from quantities reported by the inventory system. If they are not properly monitored and become undetected, inventory discrepancies result in overstocking and loss in sales.
RPA software can limit discrepancies through:
Scale of discrepancy problem for retailers was best summed up by “Inventory Inaccuracy in Retailing” research, conducted by the ECR Community Shrinkage & On-shelf Availability Group, which reported that “about 60% of the inventory records are likely to be wrong at any point in time, and when they are corrected, a sales growth of 4-8% was noted”.
With our experience from working on complex projects, as RPA consultants we are able to guide your company through the entire process of RPA implementation, from creating a strategy, discovering processes, designing optimal configuration, testing, up to full-scale use, and effectiveness monitoring.
GSS IT Consulting experts can support retailers in starting or scaling up digital transformation with RPA through:
If you are wondering how to improve customer service quality in your e-commerce business with RPA, get in touch with one of our consultants. You can book a free 30 minutes consultation with us and we will help you identify your needs and pick the right technology to match your challenges.
After completing the form, we will arrange a call at a time convenient for you. During the call, our consultant will suggest how to approach the Robotic Process Automation initiative in your Company.
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You can read more about RPA software and its applications for retailers on our blog: