Driving Transformation in Logistics: Robotic Process Automation Is the Ticket
Logistics leaders face fierce competition, driving prices down and squeezing already razor-thin margins. Better service is critical to winning new customers and retaining top accounts. Yet, outdated systems and manual processes create challenges, slowing operations and hindering the ability to grow revenue. For years, logistics firms have been trapped under the weight of extensive manual processes — intensified by high personnel costs and lack of time and resources to invest in new products and services.
Today, this long-established and complex landscape is starting to evolve, with technologies such as robotic process automation (RPA) making real progress. As performance improvements create impact in one part of the business and invite potential in other areas of operations, RPA is picking up speed.
Transportation and third-party logistics (3PLs) providers represent a large web of information moving from and to suppliers and customers. These firms typically employ a corps of back-office staff and customer service representatives (CSRs) to manually enter and re-key data for primary business activities. Quoting, scheduling and tracking shipments, securing proof of delivery, generating and collecting invoices, closing out loads, and more have all been handled by teams of people executing repetitive yet finely-detailed operations. Because these tasks are manual, they create time and labor demands that are inefficient and stifle productivity industrywide. These kinds of tasks sap job satisfaction and employee morale, creating a challenging cycle of performance even for the best companies.
Automation is making a crucial difference, and for some logistics innovators, creating a competitive advantage. RPA’s intelligent software robots create a digital workforce that works side-by-side with employees to streamline operations and expedite key business activities. Boring and time-consuming activities are handed off to bots — including manual copying and pasting of information between virtually any application or data source, from websites and portals to desktop applications and enterprise systems.
This evolution is creating a remarkable jump from the industry’s earliest efforts to modernize the movement of data. Traditional integration methods, such as electronic data interchange (EDI), have been used to automate the exchange of information between customers and partners. It’s an inflexible platform that requires both the logistics operator and its business partners to work in exactly the same way with standardized formats for data exchange. It’s also too costly and time-consuming for margins that are already too tight, preventing 3PLs and other logistics providers from being able to make the full investment that EDI requires.
RPA in action: Scaling premium service by reducing manual tasks
The industry as a whole uses B2B portals, which are web portals set up as a cost-effective means of centralizing, submitting and tracking business transactions. Such a system is ideal when an operator has only a handful of partners and customers, but that is no longer the case in today’s global logistics environment.
Most operators have hundreds of partners, providers and customers — all of whom want to use their portal, each with its own login, password, navigation, reports and transactions. It’s a recipe for built-in data entry errors, no matter how well your employees perform. Updating customer systems with real-time status information becomes even more time-intensive, as CSRs often must re-key data from internal transportation management systems and supplier and customer portals to separate scheduling and tracking operations. It’s common for systems not to talk to each other.
This sets the stage for a case study in automation. PITT OHIO, a 3PL provider, offers a premium service to one of its customers — the ability to request a shipment pick-up by email. This level of excellence in customer service required significant re-keying of data and the updating of multiple systems to keep data synchronized. The process could take up to one full-time equivalent (FTE) role per premium customer. Maintaining manual processes would prevent this high-value service from scaling and limit its profit potential.
PITT instead opted to deploy an RPA platform in the CSR role. The smart software robot can extract shipment details from an incoming email request for a pick-up, log in and schedule the job. When the scheduling system has processed the request and provides a pick-up time, the robot accesses the customer and carrier portals to advise them of the schedule. RPA also extracts relevant information such as the bill of lading, carrier invoice and other pertinent documents. This all happens within seconds, rather than hours, and the customer is kept automatically updated on the progress of the job, including the location of GPS-enabled vehicles. This eliminates the need to manually identify appointment times, schedule shipments or check the shipping status from multiple carriers’ portals.
“We’re seeing a 95 percent reduction in manual effort from our customer service representatives. Our RPA platform handles what our users were doing, automatically, more consistently and more accurately,” said Darren Klaum, director of business systems, PITT OHIO.
RPA in action: Automatic appointment scheduling and tracking improves efficiency
Crete Carrier provides another example. One of America’s leading trucking companies, providing service to Walmart, Lowe’s, ConAgra Foods, and Kimberly-Clark, Crete’s operations span three divisions, dozens of facilities, and tens of thousands of vehicles.
Matt Schnake, website integration administrator at Crete Carrier Corporation, said, “Our customers count on us to deliver their freight safely and on time. And appointment scheduling plays a crucial role in helping us to achieve this. When a customer tenders a load, our teams need to take into account a host of factors in order to ensure we can deliver the order on time and in the most cost-efficient way. Our representatives need to consider how many miles of transit there are from the pickup point to the destination, which vehicles and drivers we have available at a certain time at each facility, and whether the customer is available to receive a shipment during the hours we can deliver. It’s a very labor-intensive process, and we found that as business grew, it was becoming increasingly difficult for teams to keep up with the sheer amount of work that went into scheduling deliveries.”
Schnake added, “We’ve been using RPA for almost four years now and have deployed more than 400 unique robots running more than 1 million robot executions yearly with a runtime of more than 16,000 robot hours. Twenty-four additional robots are currently in our design queue. We have just three people looking after our RPA platform — the robots are very easy to configure, and once put into production, they pretty much manage themselves.”
For appointment scheduling, Crete’s software robots are enabled to collect a range of information, including pickup and drop-off points, shipment distance and desired delivery timeframe. When the company receives a new tender, its robots use these parameters to pick an appropriate delivery slot. If the solution is unable to secure an appointment on its first run, it will extract all the information it has received and send it to a human operator, who can establish a new set of parameters and instruct the robot to reattempt delivery scheduling.
Crete also harnesses RPA to ensure smarter shipment tracking, using software robots to enhance visibility into freight as it moves across the country. In stark contrast to earlier days — where drivers might have had to physically go to a facility to determine the availability of a vehicle — RPA automatically confirms the location and load status of individual vehicles. The firm estimates that its RPA platform schedules 40–50 percent of appointments in a completely automated way, with no need for human intervention. This adds value to customers as well as to Crete’s internal operations: because their dedicated web portals are updated constantly with excellent information, customer service calls to verify data have all but been eliminated. In terms of driving company growth, Crete’s improved ability to proactively communicate order status at every stage of delivery has increased business with customers who deliver directly to their end-customers — a much more sensitive and time-critical service than standard business-to-business shipping.
Inspired by new RPA-enabled efficiencies, Crete has introduced the solution to its road services, billing and recruiting operations. PITT OHIO’s experience is similar; the firm is extending its RPA success with a plan to streamline and automate web-based processes companywide. PITT’s software robots will extend into credit and collections, handle more complex customs forms required during trans-border shipments, simplify credit card processing, and even support the company’s mobile apps.
Transformation is a new competitive imperative. Analysis by the World Economic Forum and Accenture states that there is $1.5 trillion of value at stake for logistics players, and a further $2.4 trillion worth of societal benefits, as a result of widespread digital transformation in the transportation industry. As an emerging, cost-effective technology, RPA is playing a significant role in this transformation. A recent Transparency Market Research report estimates that the global IT robotic process automation market will reach $4.98 billion by 2020.
Core manual process challenges that have long plagued the enterprise world, including the logistics industry, can now be identified, automated, and resolved through the power of RPA. Customer service reps are no longer tied to manually re-keying, cutting and pasting track and trace data, or gathering and inputting freight bill payment information. With RPA, these tasks can be completely automated — from the initial shipment request to securing proof of delivery, to generating and paying invoices, and capturing and researching new loads. CSRs will be freed up to focus on activities that require a human touch, such as true customer service and support. RPA streamlines operations, improves cash flow, and optimizes the collections process. It delivers an immediate cost savings of 25–50 percent by automating tasks at a fraction of the human time equivalent.
It’s a time of great change in logistics, and it’s really only beginning. RPA is at the heart of this shift, helping 3PL providers manage the myriad carrier, billing processer, and supplier and customer relationships that make up the ecosystem of a strong, forward-thinking business.