What is Robotic Process Automation (RPA)?

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:

• send automatic notifications,
• make schedule entries,
• transfer data between systems,
• create documents,
• as well as for reporting, controlling or ensuring data compliance.

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 and 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)?”.

What is supply chain management (SCM) in retail?

The main differentiator for SCM in retail is the volume of product movement and the fast-moving nature of the products. Because of this, the retail supply chain has to be monitored very closely, and each optimization can bring savings and increase sales. Retailers and their partners have been using automation in the supply chain for decades, but it was traditionally associated with creating “smarter” and more efficient warehouses.

With the evolution of Robotic Process Automation, retailers, led by enterprises such as Walmart, Amazon, and Tesco noticed its potential to streamline business processes and improve supply chain management.

How to use RPA in the supply chain management for the retail industry?

Automation of multiple routine processes identified within the supply chain can radically improve efficiency and bring down operation costs. Opportunities that Robotic Process Automation brings will be beneficial for retail companies worldwide.

Multiple processes can be automated within supply chain management, such as:

• vendor selection,
• suppliers’ onboarding,
• supply and demand planning,
• purchase order management,
• contract management,
• invoice management,
• work orders management,
• returns processing.

With vast amounts of data gathered, stored, and analyzed, each improvement achieved through the implementation of RPA in that field can bring fast ROI and strengthen the company's market position.

Benefits of Robotic Process Automation (RPA) in retail

With a lack of programming integration, quick implementation potential, and ability to work 24/7/365, RPA software has a vast potential to support retailers in dealing with the main challenges that the industry is facing when it comes to supply chain management.

The main benefits of RPA use in the retail industry are:

• improving product availability,
• reducing errors in business operations,
• freeing up employees time to focus on customer experience,
• providing real-time analytics,
• speeding up the order and return processing,
• easy collection and compilation of data for auditing,
• optimizing operational efficiency and costs,

Let’s dive deeper into the use cases of RPA in retail supply chain management and discover its opportunities.

Vendor selection with RPA in the retail industry

Proper supplier selection becomes a significant concern for retail stores, as it impacts profitability and business efficiency. Choosing suitable suppliers might be challenging when comparing multiple factors such as the value for money, quality, and reliability.

Leading enterprises are not looking for the cheapest supplier but rather focusing on a sustainable supplier selection, which can be difficult. An excellent example of the scale of problems when it comes to vendor selection can be Walmart, which in Supply Chain Policy stated that: “Walmart’s supply chain reaches more than 100,000 suppliers globally and many of those suppliers also have their own supply chain. Walmart expects that the products we purchase and sell are made in the right way by suppliers who act ethically and respect the dignity of workers. Walmart’s stakeholders - including its customers - have the same expectations. In addition, companies like Walmart need to be part of the solution to environmental challenges such as climate change and depletion of natural capital in order to maintain our license to operate, uphold supply and create value for business and society through regenerative initiatives that draw on our unique corporate capabilities.”

Each enterprise might have its list of sustainability factors that are taken into account when a new vendor is selected, but most frequently, they can be divided into 3 main groups:

• social factors focused on the working place and employee’ progresses. They include influence on the local community, respecting employees’ rights, social responsibility, and customer service.
• environmental factors - factors that are related to the impact on the environment, such as pollution control, waste management, and general environmental competencies of the vendor,
• economic factors - most frequently considered ones are cost, advanced technology, on-time delivery, reliability, quality, and product availability.

For those enterprises that do not want to spend money on another specialized software responsible for data collection, management, and compiling to analyze when they are looking for new vendors, RPA is a good solution.

Robots can go through vast amounts of data concerning sustainability factors and present them in a format that would be most suitable for employees selecting new vendors.

The main benefits of such an approach to vendor selection are:

• human error is eliminated from the processes,
• with AI capabilities implemented, RPA can respond to requests for proposals, quotes, and questions,
• RPA can capture, use, and exchange data from various systems, including legacy systems, without the need for programming integration,
• robots can work 24/7, 365 days a year, assuring that all data will be captured and passed in real-time.

With the ability to faster identify promising vendors from a pool of suppliers, leading enterprises can streamline the selection process and, as a result, lower costs while delivering better quality in the products offered by the stores.

How to automate suppliers’ onboarding process?

With the suitable suppliers identified, retailers need to make sure that cooperation with them will be most effective, and for that, proper onboarding is a crucial practice.

In many cases, completing the vendor or supplier onboarding process is time-consuming and requires many manual actions, which can be automated using RPA.

Example use cases of RPA software for supplier onboarding may include:

• sending supplier questionnaires and collecting received data,
• gathering data for due diligence,
• saving supplier information such as contact details and necessary documentation, updating records, and distributing information to all employees or other partners that may need them,
• integrating data sources to keep the information up to date and avoid duplication.

Such tasks can take hours or days to finish by human employees and can be automated with RPA, to reduce errors and speed up completion time.

Supply and demand planning with RPA

Without the best possible understanding of future demand, retailers cannot make accurate decisions in areas such as store and distribution center replenishment, capacity planning, and resource planning. That requires the ability to analyze the impact of a range of variables, from historical demand, through internal business decisions to sometimes even external factors.

RPA software potential in data collection, even from legacy systems or paper documents with the use of Optical Character Recognition (OCR) can be really valuable in process of demand and supply planning.

RPA software can be used to gather data from multiple sources, including:

• CRM system,
• ERP system,
• Historical sales data storage,
• CSV/XLS files,
• Printed documents with the use of OCR software,
• E-commerce platforms (if a retailer sells online).

All information then can be displayed in a unified way and used by sales&demand planning teams.

But the use of RPA opens more opportunities for automation, as this software combined with AI and Machine Learning can make a huge difference in retail.

One of the inspiring examples of retailers fully embracing the potential of automation can be Tesco, where the supply chain analytics team, staffed mainly by science and engineering graduates, creates an advanced prognosis of demand and customer behaviors. The amount of data that has to be gathered and compiled is enormous - for example, to create a statistical model that predicts the impact of the weather on customer buying behavior, Tesco needed to accumulate historical weather data and sales records from its 3,000 plus stores, which would be extremely difficult and time-consuming without automation. With those data, Tesco was able to create a model used now to adjust its stock levels based on the weather forecast.

Benefits of automating purchase order management

Retailers buying teams create Purchase Orders (PO) to place and manage orders with chosen suppliers. Those documents are not only used as sources of financial commitment information but can also provide visibility over the status of particular orders.

In the case of enterprises that are not using dedicated software to manage Purchase Orders, with proper implementation and integration, employees can benefit from RPA tools in multiple ways, including:

• creation of new Purchase Orders based on determined parameters,
• notifications about important moments in the PO process, such as approvals or rejections,
• gathering data about placed orders in one place without a need of human intervention,
• streamlined communication, as Purchase Orders are centralized and accessible for anyone who needs them,
• RPA can also monitor the budget assigned to a particular product or supplier and initiate alerts when there will be a risk of overspending.

With 100% accuracy, RPA software can drastically optimize the entire process and allow companies to better track their orders.

It is also considered to be a good practice to keep all Purchase Orders for future audit, and by automating now only creation, but also the archiving process, enterprises can be sure that they would be able to bring up necessary information at any time and get the complete story.

Contract management in retail with RPA

Many retail enterprises still rely on manual management of contracts, where numerous applications are required to arrange them efficiently. Supplier contracts require extensive monitoring and control since mismanagement frequently results in financial losses.

Here are some examples of how RPA software can be used in contract management:

• bots, combined with AI and OCR can be used to understand the type of contract and automatically store it according to proper categorization, for example, by separating supplier contracts from commercial contracts,
• also, with the use of OCR, companies can use bots to capture data from old, paper versions of contracts, to use them in the future for analytics purposes,
• with proper implementation, RPA software can be used to make sure that all contract deadlines are met, assuring a high level of monitoring over the contract lifecycle,
• when a company uses standardized contract forms, RPA software can be used to verify that all clauses are compliant with the company template and have not been altered, freeing humans from reading documents line by line to determine that,
• RPA speeds up contract turnaround time, as it can be used to send and read messages, monitor the status of replies, and alert when there are delays or acceptance missing.

Potential gains resulting from proper contract management are huge - according to research conducted by the International Association for Contract&Commercial Management, “companies could earn 9.2 percent more revenue each year if they were more diligent in managing their contracts”.

Effective invoice management with RPA in retail

Inefficient accounts payable processes are problematic for retailers of all sizes. One of the more frequently mentioned examples is engine maker Rolls-Royce, which was suspended in 2019 from the Prompt Payment Code in the UK because it was unable to pay at least 95% of its supplier invoices within 60 days.

What is symptomatic is that retailers failing to pay invoices in time do not usually have cash-flow problems. Delays are caused because they struggle to accurately track, analyze, and record data from hundreds or thousands of suppliers and can’t keep their payment schedules efficient.

How can RPA solve this problem? Robots are able, for example to:

• log into any vendors system or online portal to download invoices,
• scan and read (with use of OCR) paper invoices,
• identify e-mails with invoices and gather data from enclosed files,
• compare invoice data with Purchase Orders and internal company records to validate documents,
• monitor payment deadlines,
• streamline acceptance process and, if needed, also proceed with payment (automatically, based on certain conditions, or after employee approval),

With the mix of Robotic Process Automation (RPA), Optical Character Recognition (OCR), and Artificial Intelligence (AI), the bots will scan, digitize, and validate key data from invoices. By automating the invoices, management process retailers can avoid financial penalties for late and incomplete payments.

Maintenance-related work orders management with RPA

In simple terms, a work order is essentially a task, action, or job for an employee that is planned within an enterprise or is initiated upon the request, frequently related to audits or inspections. When it comes to specific cases in retail, work orders are associated with maintenance jobs that have to be planned and conducted in stores to keep equipment working properly.

We can see the scale of the problem when we consider that the average large store might have up to 1000 pieces of equipment to maintain, from refrigerators to shopping carts and cash registers. It’s estimated that in the case of megastores, this number rises up to 3000 and more.

To maintain the high quality of service to their customers, retail stores usually rely on in-house maintenance teams to take care of their basic equipment and leave the maintenance of more complex equipment to the external service providers. But even in the case of outsourcing, it’s crucial to keep track of maintenance deadlines to make sure that equipment is working properly.

RPA can support retailers in work orders management through:

• monitoring spare parts levels and sending notifications when a new order is necessary,
• keeping track of maintenance terms and other important deadlines,
• streamlining information exchange between departments to assure that all malfunctions are reported, and appropriate actions are taken,
• helping with scheduling and keeping track of work hours related to maintenance,
• storing data about maintenance in a centralized database, integrating them from multiple sources, including paper documents scanned and read with OCR,
• providing easy access to data about the total cost of ownership for each type of equipment and repair costs for internal audits.

With easy access to all the data, retailers can faster locate problems with certain equipment, keep track of repair history and assure that their maintenance teams are working as effectively as possible.

Fast returns processing with RPA

Retailers are facing a really large problem related to the number of returned items. Of course, it varies between merchandise types, but for the industry as a whole, the scale is really impactful. For example, as reported by National Retail Federation, American consumers returned $428 billion of goods in 2020, at a return rate of 10.6 percent (with e-commerce returns accounting for nearly a quarter of returns volume):

Source: Consumer Returns in the Retail Industry 2020 Report, ApprissRetail.com

Returns are most of all a lost sale, reducing cash, profits, and margin percentages, but they also result in increased labor costs (due to inspection and re-stocking time).

With potential out-of-stocks and increased logistics expenses, options to optimize the return process in retail with RPA cannot be ignored.

Robotic Process Automation software has the potential to:

• streamline reverse logistics operations processes,
• allow easier data collection from multiple sources to support analysis of markdown liability, return rates and causes by product category, and estimate expected level of returns for a given product line,
• The support communication process with the customer and all involved departments, to assure that item will be returned quickly, checked to prevent fraudulent return, and money will be returned to the customer,
• capture data and alert employees when potential abuse of return policy is identified,
• keep track of return deadlines and send appropriate notifications.

When proper process mapping was used and RPA is correctly implemented, it can not only support supply chain related activities resulting from the return process, but also support the accounting department with gathering and issuing necessary documents related to refunds, or proceeding with the transaction itself.

Future of RPA software in retail supply chain management

With the increasing advancement of RPA software, robots are better prepared to handle the skill-based, non-standardized interactions of complex supply chains. With the incorporation of cognitive and knowledge-based capabilities, RPA software can work like human employees in many cases, thanks to cognitive process automation, intelligent computer vision, and intelligent OCR (Optical Character Recognition).

With the use of AI and Machine Learning, robots can gain knowledge-based capabilities to make judgments based on observed data patterns.

With proper expertise and implementation, automation potential with RPA software in supply chain management is something that cannot be ignored. As an example of Tesco already proved, cognitive automation basing on complex algorithms and pattern recognition to make predictions and support decision making has a huge impact on business efficiency.

How can we help retailers in Robotic Process Automation?

With our experience from working on complex projects, as RPA consultants we are able to guide a 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 retail enterprises in starting digital transformation with RPA through:

• defining strategy,
• analyzing, understanding, and documenting business processes,
• setting up operating models,
• identifying technical infrastructure requirements to deploy automation solutions,
• educating employees and helping to create an “RPA-friendly” environment, where each team member looks for more automation opportunities to support company transformation,
• creating and documenting test scenarios and procedures to ensure optimal configuration,
• training team members in the building, operating, and maintaining automation solutions,
• helping to solve issues that arise in day-to-day operations with RPA software,
• further support of the implementation of any type of automation technologies by the company,
• helping to plan and set up Centers of Excellence or Process Mining Hubs, to boost up automation efforts.

If you wonder how to start or improve the implementation of automation and digitization of processes and document flow in your company, contact us for your 30 minutes free consultation.

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. Thanks to this, you will assess which technologies will bring you the greatest benefits in the area of automation and standardization of processes.