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The traditional supply chain management approach relies heavily on manual work and is time-consuming, error-prone, and expensive. As documentation is an important part of the supply chain that consumes considerable efforts of enterprises in the supply chain workflow, it makes sense to automate the process with the help of intelligent document AI software.
Supply chain management includes the complete workflow of procuring raw materials and transforming them into finished products that reach consumers through distribution channels. The supply chain management workflow consists of five stages, namely - A) Planning B) Procurement C) Production D) Distribution E) Returns.
Various documents are created at each stage and manually handling them continues to be a huge challenge and time-wastage for most organizations. Connecting data and documentation with the right automation technologies is the way forward.
In this article, we shall understand all these concepts so that you are well-prepared to start your journey of automating your supply chain documentation with workflow automation software.
Let's jump right into it:-
What is supply-chain management? Why should you automate it?
In its simplest terms, supply chain management is the complete process of procuring and selling goods and includes all the processes that transform raw materials into final products. It encompasses everything from procuring raw materials to manufacturing the goods and includes storage, distribution, delivery, and recovery.
Optimizing the supply chain is critical as businesses gain a competitive advantage and are able to increase profitability. Some of the reasons for optimizing it are:
A smooth and effective supply chain is important for establishing strong vendor relations.
Making the transition from manual supply chain logistics to an automated one saves invaluable employee time that could be put to better use.
Supply chain workflows and flowcharts help in streamlining various processes and in detecting fraud.
Using legacy systems in supply chain management has its drawbacks. Certain steps are repetitive and prone to manual errors that can be detrimental to the business in the long run.
Take manual data and document processing, for example. Entering information from various documents generated during the supply chain process is tedious, error-prone, and a drain on money. These time-wasting processes can easily be automated.
Let’s understand automation in supply chain management and why you should make it your priority.
Focusing on automation in supply chain management
Supply chain complexity is caused due to a variety of factors such as faster lead times, tailored delivery expectations and expanded product line as well as the various formats of information, the unstructured nature of documents, and product transportation issues. The modern-day supply chain has to evolve into simplified and efficient processes that are able to meet the changing needs.
In all such situations, supply chain automation is your savior.
Automation in supply chain management incorporates modern technologies to automate manual tasks with the purpose of streamlining workflows and bringing about efficiency. Some of the modern technologies used in automation are:
Internet of Things (IoT)
Artificial Intelligence (AI)
Machine learning and predictive analysis
Digital process automation and Optical Character Recognition (OCR)
In any supply chain workflow, many documents have to be fed into the system for easy processing. Sales orders, for instance, can automatically be processed when you receive them in the form of PDF documents.
Instead of spending valuable man-hours doing repetitive work, automated workflows free up employee time and bring about efficiency.
Businesses that don’t automate their supply chain management in all eventualities will get outdated. These traditional businesses follow a linear path from raw materials procurement from the suppliers to final products being delivered to the consumers, relying heavily on processes like on-premise documentation, inventory tracking, and goods authentication.
With so much going in for automated supply chain management, the BCI study revealed a startling fact that almost 63% of companies are still stuck with the traditional systems of manually managing their supply chain logistics.
Each year, businesses lose over $600 billion because of data entry errors in the process that can be rectified considerably with automated data capture.
To be in sync with the changing paradigm of demand-driven logistics and consumers’ expectations of fast deliveries with real-time data access, automation is the solution.
What is intelligent document processing for supply chain automation (+ other use cases)
Let’s look at some of the most common use cases of supply chain management.
1. Indirect goods procurement
Traditionally, direct goods procurement has always been given importance over indirect goods. Procuring indirect goods requires time, effort, and an organizational shift in thinking but it can also have a huge payoff. With advanced supply chain management and analytical tools, you can streamline workflows and adopt automated procurement systems for indirect goods.
2. Real-time logistics and fulfillment capabilities
Smart supply chain automation technology can monitor the inventory, identify products to be shipped, optimize pick-ups, routes, and more and reduce paperwork.
3. Payment services
In accounts payable automation, invoices with varying structures and layouts can be matched against purchase orders in real-time.
4. Predictive Analytics
Automated supply chain management through analytics identifies future trends and helps in demand forecasting, pricing, and inventory management strategy.
5. Data Capture and Extraction
Data capture and automation can be game changers for any business for improving its bottom line. This is perhaps one of the most time-consuming and error-prone processes in the supply chain.
Numerous documents are processed daily - from purchase and sales orders, invoices, inventory lists, and shipping orders to bills of lading. All are entered manually in legacy systems or at best through semi-automated systems are highly prone to errors. Besides, there is a limitation to how much manual data entry employees can do productively.
With automated data capture and extraction using a document AI solution, you can reduce the turnaround time significantly and bring efficiency by automating the constant stream of documents like sales orders.
Since automated data capture and extraction is such an important part of a supply chain management system, let’s understand it in detail.
How to automate data extraction for supply chain management
In most manufacturing and product assembly operations, products move down the supply chain. When a product reaches the consumer or client, it involves many actions like materials management, manufacturing the product, inventory management, order fulfillment, and product delivery. All these combine to form an end-to-end supply chain management workflow or flowcharts.
Most companies face intense competition and dwindling margins due to which they are revisiting the supply chain management workflows to identify improvement areas in data extraction. They are replacing the legacy systems of manual data collection and extraction by automating the process.
Umpteen number of documents require processing like purchase orders, invoices, bills of lading, and delivery receipts.
To automate the data extraction for supply chain management, let’s understand its five critical elements:
The process starts with planning for inventory and manufacturing processes. This includes things such as materials needed at each stage of manufacturing, staffing, and equipment capacity. Large enterprises often use materials planning tools for this.
2. Procuring raw materials
This is where strong relationships with suppliers come into the picture. You need to identify the most economical vendors from whom to procure quality raw materials during the manufacturing process. The raw materials can be both perishable and non-perishable. Sourcing the right amount of materials to maintain an ideal inventory can be a challenge if the supplier doesn’t honor the lead time to provide the raw materials.
Production is the manufacturing of the product that transforms the raw materials into finished goods. It uses machinery, labor, and external help. The process is a detailed one that comprises assembly, testing, and packaging.
The stage of the product finally reaching the hands of the consumers is through the delivery channels and logistics solutions. This is the time when the consumer interacts with the product and it contributes to the brand image. Various methods of transportation like rail, road, air, and shipping are used in this stage.
Also called ‘reverse logistics,’ this is the post-sale customer support process when due to any reason, the customer decides to return the product. The enterprise should have the capability to receive the returned product and issue refunds as per the refund policy.
In this supply chain workflow, many types of logistics documents are generated and mistakes can prove fatal.
The most common types of documents are:
Bills of Lading
You can automate the data extraction from these semi-structured and unstructured documents in different formats using document AI software - through the following steps:
Document preprocessing through the OCR scanner involves removing noise and deskewing.
Document classification that identifies the format (PDF, jpg, and png), structure, and type of document.
Data extraction extracts the values of unique key identifiers and table extraction does this line item-wise.
Data validation that detects inaccuracies of extracted data and flags them.
Human review is required for fields captured with low-confidence scores.
How to automate data capture using Docsumo?
Logistics workflow involves several types of documents at every stage of the shipping process, containing both customer data as well as for processing business transactions. They include:
#1. Shipping labels
Simply put, shipping labels are used to identify packages and goods contained within them and include customer information, phone number, weight, barcodes, and more.
#2. Bill of lading
The bill of lading is given to the customer to claim ownership of the goods after transformation and has records of the shipment process. It is the contractual agreement between the shipper and the carrier and outlines the conditions under which goods were transported.
#3. Warehouse receipts
The warehouse receipt provides information about the quantities of commodities kept in warehousing facilities and shows the proof of ownership of products.
#4. CMR documents
Customer-managed relationship documents are files collected by the organization for interacting and engaging with clients and they ensure regulatory compliance for businesses. The reason why CMR documentation is transformative for businesses is that it helps them understand the products that are trending in the market.
#5. Proforma invoices
Similar to a commercial invoice, a proforma invoice is used for the export of goods and contains payment terms and conditions, pricing quotes, and details about buyers and sellers.
#6. Inspection certificate
A certificate of inspection certifies the condition of a commodity (particularly perishable goods) at the point of analysis, inspection, or prior to shipment. The certificate warrants the condition of goods and ensures that they meet the requirements outlined in the sales contract and is carried out at the port.
#7. Dock receipts
The doc receipt provides the exporter with the proof of delivery of the cargo to the shipment company in good condition. It is prepared by the exporter or the freight forwarder and signed by the warehouse worker upon receipt of the goods. It is used to prepare the bill of lading.
Using logistics automation processing with Docsumo, you can create and train an API to read logistics data. By using intelligent OCR technology, every time you upload a document, Docsumo recognizes and extracts data from the documents. A logistics automation software can process huge volumes of information in minutes and speed up your productivity and efficiency.
Eliminate manually entering data so that your team can focus on high-value tasks.
The benefits of using logistics automation service Docsumo in terms of deliverable results are:
1. Reduces your processing time to under 2 minutes
Free your operation team’s time from repetitive tasks so that they can focus on strategic initiatives, helping them react more quickly to customers.
2. Reduce your back office costs upto 50%
Leverage Docsumo’s APIs for document classification, key attribute identification, and data verification to free up your team’s time from redundant paperwork. Save as much as 50% on document processing and back office overhead costs.
3. Achieve 99%+ accuracy
With Docsumo’s human-in-the-loop review feature, you can quickly verify data and increase the accuracy of your downstream processes.
4. Save upto 2 days reconciling shipments
Bring down the time your operations team spends manually processing logistics documents from days to a few minutes with Docsumo.
What makes Doscumo the most efficient document AI software for supply chain management are features such as:
1. Ease of use
Upload the data in the web app or send it through Docsumo API and within seconds, the processed output is ready. It can be downloaded or sent to other software.
2. Data safety
Rest assured, your data is encrypted with the highest level of fine-grained security. You can monitor data access and schedule periodic deletion of sensitive data with user management.
3. Detailed performance reviews
Receive weekly and monthly analytics for automated workflows.
Benefits of intelligent document processing for supply chain automation (with real-life example)
From scanning documents with 99% accuracy, saving time, cost, and many other things, you can be assured that the automation takes care of the routine and mundane tasks. In any supply chain and logistics solution, distribution centers, warehouses, freight, and shipping documents are involved.
Freeing your team from manual or semi-automated data processing is indeed a boon and can lead to incremental benefits like:
Real-time decision making
How BiagiBros automated advnaced shipment notification using Docsumo?
The 3PL warehousing company BiagiBros provides businesses across the US with supply-chain solutions. In any given month, it handles more than 1500 deliveries as its distribution centers, warehouses, and truck terminals are spread throughout the US.
Managing over 50 inbounds each day of drivers delivering goods into their warehouse.
As most of their customers couldn’t generate barcodes and send Bills of Lading with the driver, it became a problem for BiagiBros to do this on a large scale by scanning and extracting the data.
It took them up to 30 minutes per customer to manually scan the bill of lading, extract data and generate barcodes per customer.
They wanted a solution that would decrease the processing time and improve efficiency.
Docsumo came to rescue through a series of data extraction, categorization, and validation processes. It would integrate this data into meaningful datasets in the supply chain process.
BiagiBros was able to save more than 500 hours each month by bringing down the time for barcode generation from 20 minutes to 2 minutes and making the process 99% accurate.
The next step…
If you are tired of wasting precious time and resources on the process of document processing but don’t know how to start, Docsumo has you covered. As an intelligent document AI software with OCR technology, Docsumo converts unstructured documents such as invoices, bank statements, and more into actionable data.
If you are looking for an intelligent document processing solution for automating your supply chain management, sign up for a free trial.
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