The ability to flex supply chain operations to manage increased demand is essential in the modern supply chain. As the demand for more e-commerce purchases grows, that volume will inevitably contribute to an increased volume of returns. However, those returns processes represent only a fraction of the full processes that remain redundant and right for automation in logistics. In fact, it is possible to use automation in logistics through the power of robotics process automation (RPA) to process more freight quotes and more proactively manage by exception in anticipation of peak season. As a result, supply chain leaders need to understand a few things about the challenges of dealing with a higher than typical peak season forecast, what RPA really is, and how targeted automation in logistics creates opportunities for continuous improvement and benefits overall profitability.
Using Various Freight Tactics to Reduce Costs & Streamline Management
The Challenges of a Higher Peak Season Forecast
The stage is set for major challenges to materialize in the coming 2020 peak season. While automation in logistics promised for years to help supply chain leaders handle sudden changes in demand, 2020 will be the year when it is truly put to the test, especially in e-commerce. According to DC Velocity, the upcoming peak shopping season is still on despite the pandemic. And approximately 66% of consumers plan to continue shopping through online means this year. While that may not seem like a major shift, it does mark a change in the volume and percentage of people shopping online versus brick-and-mortar stores in recent years. At the same time, most consumers remain uncertain and skeptical of visiting brick-and-mortar stores, especially as mask mandates and government orders regarding closures or capacity limits remain in place. And as a result, more consumers are expected to leverage online shopping. Of course, this comes on the heels of an e-commerce boom that has already pushed e-commerce beyond its typical growth for the year and challenges the traditions of peak season planning.
So, the question becomes, “what are the real challenges of managing a higher than anticipated peak season?”
The answer is wide-ranging. It includes limited ability to source available capacity, problems communicating shipment status in real time to consumers, additional delays resulting from limited capacity and potential rejections after tendering freight, and much more. In turn, customers will hold shippers accountable, which could put profitability at risk. Therefore, the only way to truly create a proactive strategy to overcome the clear obstacles in the coming holiday season lies in automating as many processes as possible and ensuring they function correctly.
What Is RPA and How Does It Work
Believe it or not, RPA is still new and sounds scarier than it is. It is possible to think about the value of RPA while considering the general notion of using automation in logistics. Unlike physical robots that can be used to physically move inventory and package shipments, RPA involves a more software-guided approach and virtual robots. In other words, artificial intelligence and machine learning work behind the scenes within software allowing the virtual processes within a transportation management system (TMS) and other supply chain systems of record to run more efficiently and proactively.
Furthermore, Deloitte better explains the capabilities of using this innovative arena of robotics with how they may interact with other systems beyond minor rulesets in a TMS: “RPA tools are best suited for processes with repeatable, predictable interactions with IT applications. These processes typically lack the scale or value to warrant automation via core systems transformation or if core systems transformation is not due to be implemented soon. RPA tools can improve the efficiency of these processes and the effectiveness of services without changing the underlying systems.
RPA software ‘robots’ perform routine business processes by mimicking the way that people interact with applications through a user interface and following simple rules to make decisions. Entire end-to-end processes can be performed by software robots with very little human interaction, typically to manage exceptions.”
Essentially, TMS users can help to avoid an unexpected shipping capacity crunch by letting automation handle the management, diverting more time to focus on serving customers and less time spent chasing redundancies.
Automation in Logistics Yields Targeted Efficiency and Faster, Accurate Freight Management
The greatest areas of using RPA involve highly repetitive processes and activities which can be run through artificial intelligence and advanced algorithms. Obviously, there will be exceptions that inevitably require human intervention. However, utilizing RPA and automation in logistics allows supply chain parties to better manage the supply chain itself by handling the one-off requests and status inquiries that go through more traditional channels without necessarily flagging those oddities for human intervention.
For example, imagine a customer requesting a quote for shipping freight across a given trade lane in the week leading up to Black Friday and doing so thruogh email.
Typically, this experience would involve an employee at the carrier or logistics service provider entering customer data into the TMS, reviewing available freight options, sending information back to the consumer, and awaiting confirmation. Instead of this lengthy drawn-out process, an advanced TMS can leverage RPA to capture that information, generate the quote, share that information within the consumer’s TMS and book that shipment in the interim. Therefore, it effectively eliminates the middleman and helps companies scale operations to meet changes in demand regardless of what available resources exist.
Leverage Automation in Logistics Management With an Empowered TMS
While the jury is still out on what exactly will happen to e-commerce and peak season 2020, the need to prepare for more demand is evident. Across the board, shippers, retailers, carriers, brokers, forwarders, and other freight management parties need to seriously consider the value proposition of automation in logistics. And that must include a TMS that enables automation, like the Cerasis Rater.