Editor’s note: This is the fourth in a series of 10 articles about advanced technologies and what they mean to procurement. Articles run on the second and fourth Tuesdays of the month in Inside Supply Management® Weekly, Institute for Supply Management®’s (ISM®) e-newsletter.
* * *
Supply management is a complex ecosystem that involves numerous repetitive and time-consuming tasks, ranging from order processing to inventory tracking.
Robotic process automation (RPA) has emerged as a powerful software technology for streamlining supply management’s numerous repetitive and time-consuming tasks by using software to automate rule-based processes.
An area that can benefit from RPA is order processing, which typically has involved manual data entry and multiple system interactions. RPA can streamline this process by automating data extraction, validation and entry across various systems. Software bots can (1) retrieve customer orders from different channels, (2) validate customer information, (3) verify product availability, (4) update inventory records and (5) generate order confirmations. Automating this process reduces errors, improves order accuracy and accelerates order fulfillment, thus enhancing customer satisfaction.
RPA also can be used to automate invoicing, including tasks like invoice matching with POs and receipts; pricing, quantity and discount verification; and discrepancy reconciliation. It extracts relevant data from invoices, cross-referencing it with POs and receipts, and performs validation checks.
Software bots flag inconsistencies and errors for human review, ensuring accurate and efficient invoice processing. By implementing RPA in invoice validation, organizations can reduce processing time, minimize errors, streamline payment cycles and enhance vendor relationships.
Accurate inventory tracking is crucial for efficient supply management, and RPA makes sense here, too. By integrating with various systems, such as ERP and warehouse management systems (WMS), it can retrieve real-time data on stock levels, monitor inventory movement, generate alerts for low stock or stockouts, and update inventory records. This enables organizations to improve inventory accuracy and optimize replenishment processes as well as reduce carrying costs and enhance demand planning.
RPA also can improve process efficiency and scalability. Software bots can perform tasks 24/7 without human intervention; this reduces processing time and eliminates delays. They can handle high volumes of transactions with speed and accuracy, allowing organizations to scale their operations without the need for additional human resources. RPA also ensures process standardization and compliance by following predefined rules and procedures, minimizing errors and deviations.
Before implementing RPA, conduct a careful analysis of existing processes to identify suitable automation opportunities. Additionally, it’s essential to ensure data security and privacy when integrating RPA with existing systems. Organizations must also provide adequate training and support to employees who will work alongside software bots to ensure a smooth transition as well as foster collaboration.
RPA has emerged as a game-changing technology, streamlining repetitive tasks, improving operational efficiency and enabling supply management practitioners to focus on strategic initiatives and relationship building with vendors and customers. By automating processes such as order processing, invoice validation, and inventory tracking, organizations can reduce errors, enhance productivity, and drive cost savings.
As RPA technology continues to evolve, its integration into supply management will continue to bring transformative benefits to organizations seeking to optimize their supply chain operations.