Logistics industry has always been the backbone for many industries like retail, consumer goods, food production etc. With the rise of e-commerce, the demand for logistics has increased and competition intensified. The pressure has been relentless on coping with higher demands, higher elasticity to cope with fast demand changes, reducing operational costs to have higher flexibility in pricing and enhancing margins. In addition, the threats of emerging disrupters that could change the industry’s core are lurking around for opportunities.
In such a volatile environment, there is an increasing need for logistics providers to leverage on technology to increase productivity, lower cost, improve competitiveness and maintain agility. However, many logistics providers are often saddled with outdated systems that are difficult to change and manual processes. Most of the time, we see human workforce working longer hours to bridge the gap to fulfill higher than capacity demands. Due to the complexities of the legacy systems, an overhaul would not be a quick win but a medium to long term strategy. Meanwhile, what can Logistics providers do to quickly overcome these problems to improve competitiveness? The answer could be Robotic Process Automation (RPA).
RPA is a software robot that could be configured to “learn” your processes and perform them on a desktop. The rule-based algorithm could be implemented as short as 3 months yielding an excellent ROI of less than 1 year. Most Logistics providers would see an average of 60% cost savings with the use of RPA. The savings are higher than offshoring/outsourcing and give a higher level of control on processes, compliance and quality. RPA can also help in geographic business expansions with minimal new investments as the new businesses can often leverage on the existing RPA processes to fulfill its demands.
The areas where RPA can be applied in the Logistics industry are plentiful. Labor intensive and repetitive tasks like processing shipment bookings, rates quotations to customers, shipment tracing, permit declaration etc. Traditionally, Logistics providers have use Electronic Data Interchange (EDI) to help transmit information between customers and partners to avoid data entry work. However, EDI can be rigid (both parties need to work on a standardized format) and expensive to develop. RPA offers a quick-win with fast implementation and flexibility to adapt to your business processes. Changes is also easier and more manageable than an EDI change. There are ample room for application for RPA throughout the Logistics business areas for freight & transport, warehouse & distribution, parcel & e-commerce, customized logistics solutions and back-office support functions in finance, human resources, procurement and administration. The scale of RPA digital workforce can go into 10,000 robots.
With the wide application areas, RPA is set to transform the industry competition landscape with a significant fast reduction in operational costs. The lower operational costs would enabler early adopters of RPA to have a higher flexibility in pricing to gain new market shares and acquire new key accounts. RPA is often the first step towards building an Artificial Intelligence (A.I.) roadmap in an organization. Early adopters also get ahead of competition in building A.I. on their RPA processes by harnessing the power of Machine Learning, Natural Language Processing, Chatbots to further enhance their competitive edge.
Logistics industry in Singapore has seen a good level of RPA interest and adoption from 2017. Logistics providers like DB Schenker, Bolloré Logistics have embarked on enterprise RPA journey. We expect the RPA adoption to increase significantly in 2018 and the years ahead.
BioQuest Advisory specializes in Robotic Process Automation consulting and implementation for the Logistics industry. Please do contact us at firstname.lastname@example.org or 6841 0270.