Inside Supply Management Magazine
As RPA Becomes Smarter, Its Use in Supply Management Grows
The growing robotics process automation (RPA) market offers potential beyond financial and accounting applications, says Craig Le Clair, vice president, principal analyst at Cambridge, Massachusetts-based Forrester Research Inc. For supply management organizations, RPA’s ability to streamline processes and quickly complete repetitive tasks can be translated to such areas as supplier selection, he says.
“The RPA market has been surging,” Le Clair says. “The collective valuation of the top three platform vendors — two of which are private and one public — is about US$11-$12 billion. These are companies (UiPath, Automation Anywhere and Blue Prism) that no one heard of a few years ago.”
Forrester, which predicts that 40 percent of businesses will have automation centers and frameworks this year, projects the RPA market to reach $2.9 billion in 2021, from $250 million in 2016, with linkage to artificial intelligence (AI) components helping to enable the growth.
What Is RPA?
RPA bots aren’t physical robots: They are software scripts that mimic what a human does on a desktop computer. Implementing RPA does not require companies to undergo a big modernization effort, Le Clair says: “You can do it relatively quickly. A lot of companies that have been frustrated with doing broader digital transformation are finding they can get some really quick wins with this.”
The type of tasks RPA does best fall under what Le Clair calls the Rule of 5: A task or process that accesses five or fewer applications, requires five or fewer decisions to be made and demands less than 500 clicks or mouse movements. “If there are a small number of decisions that the human is making and the decisions are modest, it’s something these bots can do,” he says. “If there are fewer than five applications that the bot is manipulating — as the human would — (and) … if the number of clicks or movements is less than 500, then the pattern is probably repeatable and occurring at a relatively high volume. So, it makes sense to build the automation.”
Not only can RPA be implemented quickly, it generates cost savings. “It might cost $10,000 a year to maintain,” Le Clair notes, “but you’re displacing the hours equivalent to two or three humans.”
The efficiency, quality and quickness that can be achieved through RPA is driving the market, he adds. For example, consider a use case like a request from a customer about a shipment status. “The employee has to go into the ERP system or a shipping portal to determine the status and reply to the customer,” he says. “A bot can be built to do that, saving a lot of manual effort. And it gets to the answer more quickly and more accurately.”
Where is RPA Headed?
Rule of 5 processes or tasks make up the bulk of RPA’s use, Le Clair says. The technology is common in finance, accounting, human resources and procurement — 36 percent of all RPA use cases are in finance and accounting while only 6 percent are in procurement, he notes. Companies often target legacy systems like core banking platforms and transportation management or RFID systems that aren’t very agile. “There is a lot of human inefficiency around them, so the bots are perfect for them,” he says.
Currently, bots are interacting with natural-language processing and text analytics to understand incoming forms and documents, he notes: “This is all a path to greater and greater intelligence.” While remaining task-oriented, simple RPA bots will get smarter over time, he says.
Additionally, RPA bots can work well with AI components. “For example, RPA bots will support chat bots that will interact with different aspects of the supply chain. Decision management will become externalized,” he says.
For supply management, RPA opens opportunities beyond financial applications, Le Clair says, calling the top use cases supplier selection, shipment status/communication and supply and demand planning.
To accomplish supply and demand planning, for example, requires gathering “data from other websites, vendors, customers, market intelligence, and production and sales teams,” he says. “Pooling that data is something that bots do really well. They can grab the data and put it in a standardized format. Then, with advancing analytics, soon you’ll be able to do simulations and cleanse the data — RPA does that very well. So, it can help with a lot of communications with partners and customers.”
Supply managers can look to RPA to help with streamlining processes and automating repetitive tasks, knowing that as the RPA market continues to grow, so will its uses and applications.