Robotic Process Automation
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With better management of the supply chain, retailers can deliver products to their customers faster and at a lower cost. Globally present enterprises need to consider country-specific politics, trade and tariff law, and international relationships and assure a high level of quality control. The use of Robotic Process Automation (RPA) software is considered to be a good solution for retailers to streamline their processes in supply chain management. In this article, we will analyze specific use cases of RPA that could help retailers.
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 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)?”.
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.
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:
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.
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:
Let’s dive deeper into the use cases of RPA in retail supply chain management and discover its opportunities.
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:
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:
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.
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:
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.
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:
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.
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:
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.
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:
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”.
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:
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.
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:
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.
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:
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.
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.
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:
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.