Robots are not yet widely used in such an area as procurement. However, experience in the implementation of automatic software assistants shows that their use can give not only a tangible, but revolutionary effect.
Purchases “by hand”
Business units responsible for purchasing usually face two categories of purchased goods.
Together with raw materials, tools, equipment – necessary and critical for production – they have to deal with routine tasks. For example, with the purchase of stationery, paper, consumables and many other commodity items that are not priority, do not require tender procedures and are purchased regularly.
Naturally, the purchase of business-critical product groups requires the greatest attention of specialists who deal with them in the first place, postponing the implementation of non-priority applications.
But this forced prioritization forms queues, leads to a violation of delivery times or the regularity of deliveries of non-priority goods and, in the end, leads to serious problems.
How to implement robots
The exemption of employees of the departments responsible for procurement from performing mass routine operations does not require serious competencies and becomes the main driving factor in the automation of procurement activities using robots.
They take care of operations related to the documentation of purchases, the reconciliation of prices, delivery times, data of supplier companies, and the choice of the most optimal proposals. At the same time, the product groups that robots deal with do not differ in many complex features, the control of which is carried out according to formal characteristics.
The nature of procurement automation does not differ from that inherent in the automation of other areas of business. This makes procurement automation a task that can be solved by the company itself.
The company, however, needs for this appropriate resources: a team of qualified specialists capable of implementing and configuring software robots, the necessary integration of information systems. It will also take time to carry out automation.
Finally, do not forget about the readiness of management to redistribute the responsibilities of employees who were previously engaged in routine operations.
However, such opportunities are far from always available, including in companies that have developed competencies in the field of information technology. The most “scarce” resource here is the time for which employees who have to implement a project to robotize procurement activities are distracted from their main duties.
Traditionally, in such cases, a contractor is involved in the implementation of the project, the criteria for its choosing are competencies, providing support for the system after its implementation, support, and the possibility of working on its further development.
The use of an external contractor for the procurement automation project is also justified for another reason. This is the implementation of complex procurement automation scenarios. As an example, we can cite cases when purchases related to tender procedures are also automated.
The company can use one or several electronic trading platforms (ETP) for purchases. To interact with them, the company is fulfilling integration of systems it uses to exchange requests and proposals with counterparties. The use of robots here promises a significant increase in efficiency.
The second complex scenario of using robots is the solution of tasks related to the preparation and verification of procurement documentation. One of the directions of this work is the updating of regulatory legal acts. This is a laborious process that requires the maximum attention of the performer, there are great risks associated with the “human factor”.
How to improve procurement efficiency significantly
The advantage of robots is that their use becomes a reasonable and adequate compromise for business in cases where it is necessary to reduce the use of manual labor and at the same time avoid the difficult and expensive deep integration of systems.
In the field of procurement, robots are a quickly implemented solution that can be integrated flexibly into the existing IT landscape of an organization and take into account the prevailing features of interaction with contractors.
As an example, I can cite one of our procurement automation projects in a company that develops and manufactures drugs for the treatment of rare (orphan) diseases.
For the needs of production, a large number of different types of raw materials was purchased, and the main channel of communication with suppliers was e-mail (a case typical for many companies). The information contained in the correspondence was transferred manually by the company’s managers to the 1C database.
Automation of this work based on system integration was almost impossible here. On the other hand, the use of robots freed the company’s specialists from a significant amount of manual operations.
It was decided to introduce four robots. The first, the robot receiver, having received an application from the company’s managers, draws up a request for a quotation and sends it to the supplier.
The second robot works with answers: it reads the application number in them and forms a summary table for the order, sending it for approval to the procurement manager. After approval, the third robot draws up a purchase requisition and all the necessary documents.
Finally, the role of the fourth robot is to track the receipt of goods into the warehouse and send a request for payment.
Thus, until now, procurement involved the participation of at least two people, each of them had to perform a number of routine operations.
The initiator collected requirements and created a request for supplier, the buyer sent a request to suppliers, accumulated responses, formed a table of commercial proposals, negotiated, created an order, supervised the delivery and made payments.
Now, when purchases are made using RPA, this huge array of long and time-consuming manual operations is carried out directly by the software assistant, and the person takes part in them only at the decision or approval level, if some kind of informed decision-making is needed.
Robotization effect
Robotization of procurement activities gives the company many advantages. First, it is necessary to mention labor savings. Thanks to the mentioned project, employees who previously spent up to half of their working time on working with product categories now spend no more than 10% of the day on this.
Accordingly, if earlier at least one week passed from the moment the purchase requisition was created to the receipt of the goods, now the period for implementing the requisition has been reduced to 2-3 days. The queue of procurement applications has also significantly decreased, as well as the total burden on specialists.
Finally, the main advantage of this robotization scenario is the creation of opportunities for further development. Launched robots can be loaded with work with other product categories, used in specific processes related to tender work or with applications involving prepayment.
Thus, the company was able to rebuild business processes without additional costs, by simply refining scenarios, increasing their efficiency.
Is the robot always right
Always, because he fulfills strictly the script laid down in him. However, a robot can fail. This is not due to deliberate actions or the “human factor”, but to a possible change in the way the company’s information systems work.
They should lead to reconfiguration of the robot. This also applies to changes in the structure and composition of data, changes in the system interface, and changes related to access rights to information systems.
Maintaining performance is simple. It is enough to follow strictly a simple rule: changes in the system must be accompanied at least by monitoring the scenarios of the robot performance and adjusting them if necessary.
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Robotization of individual business processes is a popular area of business digitalization. With its help, companies reduce the time to solve many problems, replace unproductive manual labor with automated operations, redistribute employees’ working hours in favor of performing tasks that require the use of intelligence.
Many companies are skeptical about the use of robots in procurement. This is due in most cases not to distrust, but to the unwillingness to carry out robotization projects. Our experience shows that such concerns are unfounded.
Yes, the project itself was carried out for six months, but these months were spent rather on coordinating and synchronizing the RPA system with the IT department. The very work associated with the implementation of the solution and the development of scenarios lasted 8 weeks. And the effectiveness of such an important area of business as procurement has grown many times over.
Moreover, the company was able to simplify further the complex processes associated with purchases.
By Sergey Tsibenko, Konica Minolta Business Development Manager