More than 80% of the world’s warehouses claim to have no automation “whatsoever.” Warehouses that fail to take advantage of the benefits of automation could bear the opportunity costs of higher labor costs, slower order fulfillments, and higher risks of manual errors, across most warehouse-related tasks.
In this article, we outline 7 reasons/benefits why warehouses should automate their processes through warehouse automation software that leverage process automation tools, such as RPA, NLP, and OCR. Specifically, we discuss how warehouse automation can lead to quicker order processing, more efficient inventory management, timely financial reporting, and more.
1. Quicker order processing
Integration between the warehouse and the company’s various digital sales channels (i.e., email, website, e-commerce platforms, etc.) could ensure a faster order processing. That is because the customer could place an order online, and thanks to RPA and API, the order’s data could be automatically exchanged with an inventory management or inventory control software that the warehouse uses.
A typical, rule-based steps for an automated order processing, thus, could look as such:
- The software receives an order
- NLP reads and transcribes the content of the order, from various formats, into a machine-readable one
- RPA automatically exchanges that information, through API, with the inventory management software
- Inventory lookup gets underway
- The inventory is established, and a shipping label is printed
- The actual shipment of the goods then becomes only a subject of payment clearance
The benefit of automating order processing is that the sales and the warehouse staff do not need to manually keep exchanging information between one another; the solution does that on their behalf. This frees up their time and enables them to focus on more strategically important tasks.
2. Seamless payment processing
For an order to be processed and the shipment to be initiated, the customer’s payment must first be cleared and the company’s financial books be reconciled.
Accounts receivable automation software streamlines the processing of payments and the issuing of invoices. In addition, the software automatically enters the data into the company’s accounting system. Finally, thanks to RPA, the software can be programmed to send a notification to the warehouse, saying that the customer’s payment has been processed and the item can be shipped.
The automation of payment processing takes all the guess work out of approximating:
- When the receivables for a good can be collected
- How much cash should be allocated to cover the DSO
- Whether an item has been paid for before it’s shipped.
3. More transparent customer communication
- The item ordered is out of stock
- The shipping is delayed
- The customer’s payment has not been received
- Or some other matter that requires a transparent and timely B2C or B2B communication
RPA bots can gather the information relevant to the case at hand. They will then immediately forward it to the customer in the form of a push notification or email.
The benefit is that the customer care representatives do not have to worry about handling such tasks manually, and can focus their attention on more value-driven tasks. Moreover, there will be no misunderstanding between the company and the customer, as the information relayed to the latter comes from the automated data that has been generated on a rule-based basis (i.e., “if payment for X is not cleared, then notify Y”).
4. Accurate scheduling
Scheduling the incoming and outgoing intermediary goods and finished articles can be automated. On the production side, precise scheduling for intermediary goods can result in an uninterrupted and smooth production process.
For instance, Toyota, the giant Japanese automotive company, orders its assembly parts on the “just-in-time” principle: The intermediary goods arrive at the production plant just in time to be assembled onto the cars’ chassis. In other words, Toyota keeps no excess inventory, and the continuity of its production is dependent on timely delivery.
For manufacturing companies that have a high and quick turnover rate of intermediary goods, an accurate scheduling timeline is of the utmost importance when it comes the company upholding its reputation and business continuity framework. Companies can automate the scheduling of the shipment of the intermediary goods and the products. Coupled with inventory management mentioned in point #5, RPA bots can monitor and report on the status of the shipments in pre-determined intervals.
Learn more about bill of materials (BOM) automation.
5. Efficient inventory management
An inventory management solution leverages RPA to take care of the following procedures:
- It automatically double-check that the ordered good is in stock.
- It automatically notices that the ordered good is not in stock. From there on, it sends an automated message to the customer relaying on the information to them, and places an order restock to the original vendor.
- Whenever the inventory threshold for a certain item is low, it can automatically, and preemptively, place a restock order, thus avoiding the scenario in point #2 entirely (i.e., “if stock count for X is below Y, send restock order to vendor Z for W amount.”)
- Lastly, by being integrated into the shipping schedules of the incoming orders from vendors, it can provide the business and the customers alike an accurate estimated time of delivery for the goods.
Learn more about inventory management.
6. Preemptive predictive maintenance
IoT sensors and RPA can be integrated holistically to undertake predictive maintenance of the pieces of equipment in the warehouse. For instance, the IoT sensors would note that the temperature of a pallet stacker has risen above the usual amount. It would then send a signal to the main IoT software, and thanks to the leveraging of RPA, the issue would then be relayed to the appropriate personnel, such as the foreman. Then the machinery would be tended to before its issue got worse and led to its decommissioning.
7. Timely reporting
We’ve previously discussed in length the use cases of RPA in reporting. In warehouses, RPA can be leveraged to create automated reports of the happenings within. Whether it’s the average time it took for an order to be processed, the customer complaints the company received, or any other matter that could be turned into action-driven insight, automated reporting can help analytics by automatically creating the appropriate reports.
The benefit of automating the reporting is that the reporting software will take care of the collecting and presenting information, and allows your employees to spend their time making sense of, and analyzing the data.
For more on RPA
We have curated a list of RPA use cases across other industries:
- 4 Pharma Processes to Automate via RPA
- Top 7 RPA Use Cases in Telecom
- Top 13 Use Cases of RPA in Education
To get a comprehensive overview of RPA, download our whitepaper below:
And if you believe your business would benefit from adopting RPA, head over to our RPA software hub, where you will find data-driven list of vendors.
We will help you choose the right RPA tool for your business:
Cem has been the principal analyst at AIMultiple since 2017. AIMultiple informs hundreds of thousands of businesses (as per similarWeb) including 60% of Fortune 500 every month.
Cem's work has been cited by leading global publications including Business Insider, Forbes, Washington Post, global firms like Deloitte, HPE, NGOs like World Economic Forum and supranational organizations like European Commission. You can see more reputable companies and media that referenced AIMultiple.
Throughout his career, Cem served as a tech consultant, tech buyer and tech entrepreneur. He advised businesses on their enterprise software, automation, cloud, AI / ML and other technology related decisions at McKinsey & Company and Altman Solon for more than a decade. He also published a McKinsey report on digitalization.
He led technology strategy and procurement of a telco while reporting to the CEO. He has also led commercial growth of deep tech company Hypatos that reached a 7 digit annual recurring revenue and a 9 digit valuation from 0 within 2 years. Cem's work in Hypatos was covered by leading technology publications like TechCrunch and Business Insider.
Cem regularly speaks at international technology conferences. He graduated from Bogazici University as a computer engineer and holds an MBA from Columbia Business School.
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