RPA BoTs in Shipping & Logistics: A SWOT Analysis

Tectonic shifts in technology are a major challenge for any organisation. One such technology is Robotic Process Automation, more commonly known as RPA. Automation is an entry point for future cognitive transformation opportunities, handling repetitive and rule based tasks without human intervention.

Shipping and logistics management is one of the core processes for many consumer facing companies today. Operations play a crucial role in delivering products to customers, managing inventory levels and in tracking shipments to ensure on time delivery. They handle all customer related activities, and they depend heavily on back office processes. And, more often, these back office processes are slow, manual processes resulting in time loss. Automation of various operational tasks like handling incoming email requests, sharing shipment details and scheduling jobs, pickup details, bills of lading etc. are completed within seconds, rather than hours.

If you are considering the benefits of RPA in Shipping and Logistics, here is a brief SWOT analysis, which can provide a direction for faster decision making.

Strengths
  • ComplianceBoTs being deployed will ensure that the processes are governed by pre-set rules. Example: There may be a set of two compliance and validation rules for passing the product further down the process line. These rules can be built easily into the BoTs, never allowing the product to pass through the decision point, until the criteria is met.
  • Quality– In almost all cases, the output accuracy after RPA deployment is 100 %, provided the BoT installation is done using exact compliance and governance requirements
  • Productivity– BoTs help eliminate most repetitive and manual work, executing it within seconds as compared to earlier. Hence, from brokerage to fleet management, RPA has it all. Scheduling and appointing personnel will be easy like never before, especially in managing thousands of orders and shipments in a day.
  • Velocity and efficiency– The back office processes can be handled with reduced downtime, thus resulting in improved service level agreements. Tasks which currently require more than 2 days can be managed within hours with a BoT
  • RPA can be used to automate tasks based on structured data i.e. MS Excel, XML markup (macros, screen scraping and business workflow technologies)
    • Enhanced process automation, works largely with unstructured data like email and documents.
    • RPA in cognitive platforms, can easily interpret customer queries and execute tasks that were previously handled by manual labour
    • Shipping formalities takes seconds, along with efficient and automated customer communications
  • Increased productivity with fewer Full Time Equivalents (FTEs) dedicated for completing repetitive tasks
  • The versatility of RPA is one of its major advantages. It can work 24 hours a day, 365 days a year with 100 % accuracy
Weakness
  • It might take a while to get accustomed to technology checks and accept the superior accuracy rate. This can be seen as a learning phase, where manual quality checks might still be in place.
  • Many shipping companies still prefer manual quality check
  • If a BOT can do a process with 100 % efficiency compared to a human, it ultimately delivers a fear that manual work may not be needed at all.
  • Assessing RPA gains and understanding the ROI which is stands to bring, requires a complete process analysis and sustainability understanding.
Opportunities
  • 25%-50% cost saving can be achieved by automating tasks at a fraction of the human equivalent. Source
  • A successful RPA implementation can ultimately draw a road for future upcoming and complex projects.
  • Fully efficient in process standardization, either in short or long run.
  • Enabling NLP (natural language processing), will work for large shipment companies serving many regions across the world.
  • Automation of cognitive processes is expected to have an economic impact of $5-$7 trillion by 2025. Source
  • 32% of logistics companies rely on manual steps in more than 50% of their processes, which can be taken up by BoTs enabling them to track loopholes and deploy effective measures.
Threats
  • Cognitive processes are still considered favourable for human capacity.
  • There has been an estimate that up to one-quarter of workflows across industries will be taken over by RPA in the next 3 years, making it clear that RPA will have a huge effect on the future workforce.
  • According to estimates, running RPA BoTs is 30% cheaper than an off shore employee. Hence, with the rise of RPA there will be changes to of both onshore and off shore jobs.
  • There always needs to be a backup mechanism in place to ensure technology breakdown does not adversely affect the business.

Shipping companies that leverage automation achieve 96% perfection in their orders across the supply chain, compared to 71%-73% for those that don’t. Industry experts are looking at RPA to disrupt the conventional Business Process Outsourcing (BPO) model, where RPA BoTs are less expensive than FTEs, but more accurate and efficient for a large majority of shipping processes.

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Naman Negi

Naman Negi

From Lucknow to Kolkata and then onto Bangalore, I have been exploring India and my career alongside. Market understanding and research pertaining to disruptive technologies like RPA, AI and IoT fascinate me endlessly. Music and long rides take up the rest of the while.