A bigger digital footprint is the path to shrinking supply chain bureaucracy
Moving documentation into the digital realm will lead to big gains as robotic process automation frees workers from repetition and creates standardisation say experts
Building out an organisation’s digital footprint and moving the heavy load of documentation involved in logistics will lead to significant gains, said supply chain executives in a Reuters Events, Supply Chain webinar.
Processes, such as invoicing, handling shipping documents and route planning are all prime candidates said the assembled panel. Instituting automation within them will lead to major gains in productivity for existing workforces, a freeing of labour for more complex tasks, and a reduction in errors, risks and costs.
As more elements in supply chains go paperless, this will the unlock the opportunity to analyse data and put in place Robotic Process Automation (RPA) and machine learning to create further value.
The prime candidates screaming out for digital transformation
Digital transformation and RPA in logistics starts from the bottom up, with a powerful case existing to apply automation first and foremost to the most commonly encountered documents being processed every day.
For sure, invoicing is definitely one of the first issues that basically is screaming for RPA
“For sure, invoicing is definitely one of the first issues that basically is screaming for RPA,” said Adhish Luitel, Industry Analyst with ABI Research, a sentiment that found agreement across the panel.
“The biggest gaps that we see, really, are in claims and invoice processing,” reinforced Jack Gerstner, Vice President, CTM Operations for Coyote Logistics. Within these there is a “massive opportunity to combine technology and people to really reduce the cycle time of both those processes, and free up people's time to work on more value-added tasks.”
Converting all these invoices into a digital footprint can save logistics companies a lot of time and improve real-time tracking as well
“Converting all these invoices into a digital footprint can save logistics companies a lot of time and improve real-time tracking as well,” explained Luitel. By “going paperless, it is possible to automate invoice data capture,” through the use of RPA bots operating “via technologies like data and image recognition.”
Adapting to a paperless world
The element of going paperless took on extra urgency during the pandemic, noted Reginald J. Twigg, Ph.D., who is Director of Product Marketing, Data Capture for digital intelligence company ABBYY. “Clearly, in logistics during the pandemic period, we had to find ways to reduce human-to-human interaction wherever possible, because of the fear of contagion.” This generated a “rush to get things touchless.”
Suddenly, a lot of those ‘send the paper in' processes broke
As shippers changed their processes almost “overnight” to reduce physical contact “It made paper handling in particular a problem for organisations,” ABBYY found.
“When you think about accounting departments and other parts of the organisation that received invoices, as paper, everybody was sent from home. Suddenly, a lot of those ‘send the paper in' processes broke. Even if they adopted email as a way of sending them in, they still process those documents and process those invoices as if they were paper.”
The important thing is that the process actually has to be adapted to handling those more virtual types of documents, such as invoices, claims and other shipping documents
Twigg was “Shocked to learn how many organizations receive electronic forms of invoices, and then print them out and key them into their various systems.”
Therefore, companies cannot just try to do simple workarounds. Instead, Twigg feels “The important thing is that the process actually has to be adapted to handling those more virtual types of documents, such as invoices, claims and other shipping documents…. You actually have to have a process that is adapted to working virtually.”
Automation can relieve the stress
Going from zero to full digitalisation is therefore a significant cultural step for many organisations, but the panel felt that the benefits were clear.
When you think about the fact that about 10% of invoices are double paid in most organisations. Why? Because they come in in multiple places
“Cost saving is clearly the most significant” gain remarked Twigg, especially “when you think about the fact that about 10% of invoices are double paid in most organisations. Why? Because they come in in multiple places. So, the accounting department gets a copy and pastes it, and then the other department gets it and pays it.”
However, “There's also risk, there is regulatory compliance, [and] taxation” issues that can be aided with digitalisation and automation said Twigg, “especially with shifting customs requirements across borders.”
There's been a massive increase in audit regulations and bureaucracy overall … so, we need automation to just relieve the stress in organisations
He noted Brexit is a good example of where agility was helpful in the face of rapid shifts in requirements. “It changed a lot of the inter-border shipping requirements, the customs forms, the customs processes and procedures.” In situations like that “you have to be able to adapt to those pretty quickly.”
“Globally,” pointed out Luitel “there's been a massive increase in audit regulations and bureaucracy overall … so, we need automation to just relieve the stress in organisations, which means less paperwork, less checking the boxes.”
Taking out the human middleman
Cost savings can also be more abstract, as releasing workers from labour-intensive, manual tasks generates greater productivity per worker.
For ABI Research’s Luitel “Greater return on human capital is the first intelligent automation,” benefit he expects.
Organisational capacity can be re-pointed to more complex or high value tasks for employees that require critical thinking
In this new paradigm, “Organisational capacity can be re-pointed to more complex or high value tasks for employees that require critical thinking. For example, an employee manually approving purchase orders can shift their focus to perhaps negotiating better vendor pricing if all the approvals are automated.”
He is also convinced that taking out “These mundane tasks, with humans just merely being the middlemen,” would “no doubt improve employee morale as well.”
The industry is getting smarter and better at reducing empty miles, maximising backhauls and keeping our trucks on the road
Gerstner also felt that there are definite returns from optimising workforce roles via automation, as “The Return on Investment (ROI) in automation is [in] reducing complexity.” He explained that cutting through the noise to where they “know which load our team or people should take action on in a sea of transactions or shipments is incredibly powerful.”
It isn’t just in the back office’s document processing where they see automation benefits either, with “Truck optimisation and network optimisation,” another “obvious” benefit Coyote Logistics is enjoying. Overall Gerstner feels that “the industry is getting smarter and better at reducing empty miles, maximising backhauls and keeping our trucks on the road,” through taking manual planning and analysis and handing that over to machine learning programs.
Luitel lists a further advantage gained by automation is in introducing resilience by using artificial intelligence in the early planning stages. “We could really see this during the start of the lockdowns, where companies can combine RPA software with machine learning and AI, gather data from vendors to run simulations and analyse alternatives.”
Thinking about the end from the beginning
Undertaking such a process does require forethought and planning, however. Companies need to put the quality of data and the end user experience at the heart of process automation and digital transformation.
Data integrity feeds into everything
“Data integrity feeds into everything,” stated Gerstner, as it gives a foundation for future success and helps to keep transformation project overheads and timelines down.
Grace Serrano, Manager, Data Transformation for GlobalTranz echoed this when explaining her approach. “What I really look to understand when I'm doing any type of data integration or process automation with either a customer or carrier, is to make sure that we're passing valid data that makes sense down the line and users who are seeing that data understand what they're seeing, it makes sense to them, they can act upon it and do the critical thinking that is necessary to make sure that the customer experience is correct and user experience is correct.”
The last thing she wants their end user to be doing is to be “Sitting there going, ‘Oh, what am I looking at?’ or ‘What does this mean?’ So, data integrity for all the users” is prioritised for her and sits behind their efforts to standardise data and messaging across any project.
Twigg said that there had been a “Shift … to think about process from the experience of its users, the customers, the employees, the people who rely on that process,” when it comes to automation and that has become a core piece of putting together any digital transformation.
How do they engage with that process specifically? What do their touches look like? And how do we improve them?
He felt that it was important to ask “How do they engage with that process specifically? What do their touches look like? And how do we improve them? How much time, for example, does that does somebody spend reading an invoice to resolve an exception because certain data is missing? That kind of focus on what the touches and the interactions look like has become a lot more important in the way that we discover processes and the way that we attempt to automate them.”
As time goes on, and with the right foundations, “Artificial intelligence can learn context, can learn experience and can learn certain skills,” which will usher in a new age that goes beyond the “strict data extraction and validation approach,” of many current systems said Twigg.