"The first step in making rabbit stew is catching the rabbit." (I. Asimov).
Automation could be the key to re-shaping the supply chain operating models of the future—enabling growth by allowing scarce supply chain talent to focus on adding value instead of executing routines. Although 90 percent of supply chain executives strongly believe that digital technologies will re-shape the way supply chains are managed1, it is not always clear which technologies are ready to generate impact immediately. Or as Isaac Asimov, widely considered the intellectual father of robotics as we know it today, states it—"to catch the rabbits."
In the wake of digitization, myriad new technologies are on the radar of supply chain executives. Many center around robots. Self-reorganizing warehouses, drones and the much-discussed self-driving truck have created a huge buzz around automation capabilities in supply chain and logistics. Yet none of these has yet reached a level of maturity to allow widespread adoption.
These discussions about physical robotics have overshadowed another robotic technology. A technology that based on our client experience has the potential to significantly reduce administrative efforts in supply chain management—for specific processes like transport management, by up to 60 percent. Robotic process automation (RPA) is a concept based on intelligent software robots automatically managing repetitive administrative processes across multiple systems. While receiving less buzz, this technology has achieved a level of maturity where widespread deployment is feasible.
At the same time, the war for talent has reached supply chain and logistics departments. Fifty nine percent of supply chain executives believe that the success of their organization will depend extensively on available talent by 2019 (a significant rise from only 31 percent in 2016).2 However, the same research suggests there will be a talent gap. Demand outstripping the supply of talent (43 percent) was viewed by executives as one of the most critical issues for their supply chain workforce.3
Given the lack of talent on the market, a classic dilemma. However: There is hope!
Up to now a lot of automation potential in supply chain processes has not been tapped due to technical limitations. RPA technology might be the missing puzzle piece to unlock this potential. For shipping organizations, our experience finds that approximately 60-70 percent of efforts in transport management are purely repetitive. Booking a transport, for example, includes the repeating tasks of building a load, identifying a carrier, comparing quotes and finally confirming the load to the carrier. Even if supported by a transport management system—only in place with approximately 35 percent of shippers4—this still involves a significant amount of manual work with mostly rule-based decision making and limited complexity.
Normally, an ideal environment for software-based automation. However, logistics system landscapes are often highly fragmented, with many parties bringing their own legacy systems into the process. Typically, there is no clear standard that allows for seamless transition of data between organizations and systems. So excel lists, offline databases and email are still a big part of the game—and have made automation nearly impossible in a pre-RPA environment. While the long-term ambition has to be the development of excellent supply chain processes and IT standards that allows seamless and automated integration between systems, RPA gives logistics and supply chain players the opportunity to bridge gaps between systems and to reduce manual efforts in the short and mid-term.
Conservative estimates from our client work indicate that more than 20 percent of the tasks in today’s supply chains could be automated by leveraging RPA—closing the talent gap by shifting the focus of scarce resources to more value-adding tasks that include maintaining and improving the RPA applications. These numbers might even increase, once the technology evolves further into intelligent process automation—RPA, enriched by artificial intelligence.
Though not the only approach supply chain executives will need to address the war for talent—reskilling, for example, will be critical—RPA will be a key element in creating needed supply chain capabilities. The technology has reached a level of maturity where adopters no longer need to fear being an experimental pilot client. With supply chain talent in strong demand, the time to consider the application is now.
“It is time to catch the rabbit.”