Manufacturing industry is one of the early adopters of automation process. Since several decades, manufacturing industry has used machines and even robotics to assemble, test, and package their products. However, now manufacturing companies are trying to implement Robotic Process Automation (RPA) in their back-office processes to stay ahead of competition.
Before we go into the details on how RPA is revolutionizing the manufacturing industry, it is important to understand the difference between using robotics and RPA.
Robotics involves designing, building, and programming robotic machines that help in automating physical tasks in manufacturing processes. RPA, on the other hand, is a software integrated with the business processes to automate certain activities, reduce human errors, and increase productivity.
How is RPA helping the manufacturing industry?
When we speak about manufacturing industry, we do not talk just about the floor or the plant alone; we also speak about other processes such as inventory management, waste management, regulatory management, and much more. RPA has been helping companies to make these processes simpler and faster to complete. Some of the areas where RPA is used are:
1. Account Receivable
With accounts receivable process streamlined, companies are now able to reduce manual work, errors, and decrease day sales outstanding (DSO). With simple changes in process such as automating the manual process of matching the remittance advice information with invoices and by reconciling them in SAP has helped companies safeguard their reputation. They are now able to provide customers good service and are able to improve customer satisfaction.
2. Account payable
The accounts payable team faces major issues as it receives non-standard invoices in different formats, which have to be checked manually to determine if it is from an approved vendor if the PO matches with the ERP system, and so on. The team has to then transfer the data manually from various invoices into a standard company format.
The entire process is so repetitive that it becomes prone to human errors, which eventually becomes an inefficient and complicated process. It is at this stage that RPA becomes extremely crucial. From capturing invoice details using Optical Character Recognition (OCR) technology to approving, the invoice based on set rules and pre-approved workflow, RPA will make the work cycle of the AP team faster and efficient.
3. Generation of Bill of Material
Manufacturing companies have to create a list that comprises list of components such as raw material, sub-components, and other material required to manufacture a product. It is referred to by all the employees in the company to know what to purchase, how to purchase, where to purchase, and for detailed instructions such as how to assemble a product and pack it.
The document is so critical to the manufacturing companies that even a single miss or an error could lead to issues such as inferior material planning, inaccurate product cost, elevated production cost, and even delay in shipment. Considering the significance that BOM has in the manufacturing industry, it becomes even more important to use RPA to ensure its accuracy.
4. Invoice processing, and purchase order management
When you think of manufacturing, invoices from the vendors are the first thing that comes into our minds. Invoice processing is a time-consuming and excruciating process. You have to go through each of the invoice, crosscheck them, send them for approval, and so on.
The entire process not just takes your time, but it also prone to errors due to multiple scrutiny and change of hands. RPA helps in scanning, reading and checking the invoices against the Purchase order, automatically send the invoice for approval to the concerned department to fix the discrepancies, enter the invoice into the accounting system once it is fixed, and finally mark the purchase order as completed.
Similarly, the manual processing of purchase order and the non-conformity in order information led to delay of 25-30 minutes in processing the order. RPA helps in verifying the orders, pulling the data from several systems, checking the billing, and verifying to ensure that there are no duplicate orders placed. This systematic approach helps manufacturing companies in reducing the order-to-fulfilment time and increasing the number of orders fulfilled per month.
5. Customer service
Customer service has always been a subject of concern for manufacturing industry. With so many options available for the customers, it is essential for the companies to keep their customers satisfied and resolve their issues in a less turnaround time.
Earlier, working on customer service queries involved answering all types of queries, which led to delay in answering the ones that were urgent and needed immediate attention. RPA in customer service involves incorporating elements such as chatbots that can answer the basic queries of the customer, freeing up the work hours of the team to answer questions that require subject matter expertise or require complex problem-solving skills.
RPA can be a huge advantage for the back processing units of the manufacturing industry, which has been on sidelines for a long time. RPA is easy to deploy and does not require large-scale tech integration or changes in legacy system. While the cost of implementation might seem high, reports suggest that the ROI on implementation is high.
The challenge lies in convincing the management about implementing RPA. They need to be shown tangible results to prove that the RPA implementation has helped the business grow. While it could take time to see the results, the decision to automate the backend processing tasks will prove to be a good decision for the businesses.