Industry 4.0

How Robotics Technology Is Modernizing Third-Party Logistics

June 4, 2018
Improved logistics processes can have a positive impact on scheduling, collections and inventory management.

Automation is making an impact in logistics as third-party logistics providers (3PLs) tap into technology for greater efficiency across the organization. By eliminating manual tasks, boosting productivity and improving customer satisfaction, technologies such as robotic process automation (RPA) are addressing the pressure to stay competitive and grow revenue. These compelling bottom-line benefits not only reduce costs but also position providers to offer higher value services, creating a tangible competitive advantage.

Call it competitive inspiration, driving operators to explore how RPA can transform operations and the overall way 3PLs work. Essential business activities, such as scheduling and order and inventory tracking, demonstrate the value of automation in action. The World Economic Forum and Accenture state 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. RPA plays a key role, and a recent Transparency Market Research report estimates that the global IT robotic process automation market will reach $4.98 billion by 2020.

In the following article, we’ll look at a few examples of how automation is changing the logistics landscape.

Schedule Shipments by E-mail as a Premium Service

The ability to request a shipment pick-up by e-mail is a premium service offered by Pitt Ohio, a 3PL provider. It’s a process that could require up to one full-time equivalent (FTE) role per premium customer, based on the need for significant re-keying of data and updating of multiple systems as a means to keep data synchronized.

To offer this capability as a scalable service, Pitt Ohio deploys an RPA platform in the role of customer service representative (CSR). A smart software robot extracts shipment details from incoming e-mail requests, uses the information to schedule jobs, and then advises both customers and carriers of pick-up details by accessing their individual portals. Other business processes are streamlined as well, as the RPA tool also extracts relevant information such as bills of lading and carrier invoices. These operations are completed within seconds, rather than hours, and incorporate efficient and automated customer communications.

Customers are kept updated regarding their job’s progress, including the location of GPS-enabled vehicles. This RPA-led process eliminates manual handling of appointment times, scheduling shipments, and verifying shipping status from any number of carriers’ portals. The result is the creation of a high-value service offering for Pitt Ohio’s clients, driving greater profitability.

“We’re seeing a 95% reduction in manual effort from our customer service representatives. Our RPA platform handles what our users were doing, automatically, more consistently and more accurately,” says Darren Klaum, director of business systems with Pitt Ohio.

Increase Efficiency of Scheduling, Routing and Tracking

Crete Carrier Corp. provides trucking service to major companies such as Walmart, Lowe’s, ConAgra Foods and Kimberly-Clark. Matt Schnake, Crete’s website integration administrator, says, “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, Schnake explains, Crete’s teams need to take into account a host of factors in order to ensure they 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,” he says.

Crete has been using RPA for almost four years. They 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. Today, 24 additional robots are currently in the 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,” Schnake explains.

Crete’s software robots handle appointment scheduling by collecting a range of information, including pickup and drop-off points, shipment distance, and desired timeframe for delivery. With every new tender, software robots use these parameters to choose an appropriate delivery slot. Only conflicts are handled by human staff, who establish new parameters and instruct the robot to re-attempt delivery scheduling if an appointment was not found on the first pass.

Crete also uses its RPA platform to enhance visibility into freight in transit. Location and load status of individual vehicles are automatically confirmed by software robots, contrasting remarkably with historical operations where drivers physically trekked to a facility to determine a vehicle’s location and status. Crete estimates that its RPA platform schedules 40% to 50% of appointments without human intervention. Crete’s improved ability to proactively communicate order status at every stage of delivery has increased business with customers who deliver direct to their end-customers—a much more sensitive and time-critical service than standard business-to-business shipping.

Update Orders and Stock Tracking in Real-Time

Davies Turner is a UK-based multimodal freight forwarding and logistics company, and has deployed nearly 100 RPA robots. “We always managed to stay on top of customer queries and meet our service-level agreements [SLAs], but we knew that we could do better,” says Darren Gurney, logistics systems manager with Davies Turner. “We wanted to be more proactive, and provide all customers with up-to-the-minute insight into their orders instead of waiting until they came to us with a query.”

Today the system automatically captures each order’s reference and tracking number as it enters the company’s warehouse management system (WMS), and updates delivery status and proof of delivery through regular queries to carrier tracking systems. As orders are filled, clients receive e-mail notification with order details and a link for tracking the order in real-time. If a customer prefers to communicate directly with staff instead, the operations team accesses the order record in the WMS; there is no need to visit a website or contact a carrier.

Davies Turner’s RPA platform also enables inventory tracking, regularly checking stock levels and automatically notifying customers via e-mail about pending out-of-stock issues. Customers can act quickly to replenish inventory levels, avoiding the impact of costly out-of-stock situations.

Moving Ahead with Automation

Expansion of RPA will build on early efficiencies achieved through automation. For example, Crete has now introduced the solution to its operations in road services, billing and recruiting. Pitt Ohio software robots will be deployed in credit and collections, and used to handle more complex customs forms common in trans-border shipments, help simplify credit card processing, and eventually support its custom mobile apps.

Logistics operators are becoming better equipped with a clearer picture of what RPA is really good at—handling repetitive, structured processes that drain workers’ productivity. Creating process efficiencies can help logistics businesses alleviate tight margins, improve customer service, and give employees the time they need to develop new products and services for growth. And, as 3PLs work to eliminate manual processes for integrating data from multiple websites to find the best possible price, automation of load and intermodal pricing will become a top priority.

Logistics leaders are recognizing the urgency in bridging the gaps—internally between systems, silos, processes and people, and externally between their customers and their suppliers. By focusing on solving problems—such as reducing manual tasks and streamlining data input—3PLs are resolving long-standing industry issues and improving their competitive position in the process.

Russ Gould is vice president, global product marketing, with Kofax, a provider of robotic process automation software.

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