Why Robotic Process Automation is the Future of Manufacturing

24 February 2021

A well-known German carmaker, rumored to be BMW, is currently implementing Robotic Process Automation (RPA), and the results look positive. The company has already automated over 50 processes across some departments with great success. It designed and deployed 43 bots across high-value, high-complexity functions within the first year. The upshot? $1.8 million saved over the 12 months period. Last year, it targeted 480,000 hours saved annually, representing $36 million in annual cost reduction.

Why Robotic Process Automation is the Future of Manufacturing
Though there’s no update yet about the progress of that aggressive plan (most likely due to COVID-19), it’s easy to tell the impact of RPA in manufacturing from what they were able to achieve in the first two years.

The company began by implementing Automation Anywhere’s Enterprise RPA platform with cognitive IQ bots to help with invoice processing. Within a year, the IQ bots had reduced invoice processing errors by over 200%. The bots also saved the company 800 hours of manual effort while generating $1.1 million in supplier recoveries per month.

There are many similar success stories within the manufacturing industry, which have seen a sharp rise in RPA adoption in manufacturing. Indeed, according to a recent study by Grand View Research, the RPA market (currently valued at $1.1 billion) is anticipated to witness a CAGR of 33.6% between 2020 and 2027.

5 Reasons for the Sharp Rise in RPA Adoption

The shift to Robotic Process Automation is mainly driven by the rise of the “smart factory.” The concept is fueled by the convergence of technologies such as 3D printing, the Internet of Things (IoT), and Artificial Intelligence (AI) to enable faster decision-making and leaner processes within manufacturing. 

RPA supports the smart factor in four main ways;

  • Automate service lines to boost efficiency 

Every inefficient process in the production line has the potential to create a domino effect. Ultimately,  the company’s ability to serve customers and deploy new technologies gets hindered.

Take an example of a record awaiting reporting. Many companies still verify such records manually. If the workers tasked with the verification are not readily available (probably sick or absent), the record can’t proceed to report. It means that the decisions to be made from that report may have to wait. In the end, it slows down everything.

Many organizations are pursuing digitization to deal with such challenges. A recent report by PwC shows that nearly one-third have digitized supply chains while three-quarters are expecting to finalize digitization soon.

RPA is one of the digitization tools you can consider to automate service lines to boost efficiency. RPA allows manufacturers to automate rule-based activities that are labor-intensive and repetitive.

  • Improved productivity means increased revenue 

Productivity is a major factor in manufacturing. For one, the shortage of skilled workers entering the industry has left companies scrambling to innovate and meet deadlines. 

Besides, you have issues such as equipment maintenance and upkeep that may eat up all the productivity gains and safety hazards always waiting at the corner.

Essentially, however, is the increased need to get more from each worker. The average employee in manufacturing is already overworked. Asking them to do more may not yield much because they’re already stretched.

Enter RPA! Although RPA won’t make the bogged worker put in an extra three hours, it lightens the responsibilities, allowing people to achieve more over the same period.

Even better, the robots made for RPA are specialized. They are designed with specific tasks in mind. Whether it’s invoice tracking or data entry, they’ll be doing that one job. 

Consequently, RPA robots can achieve a lot more in less time. What a human worker may do in an entire day, the robot may complete in under 20 minutes – with zero or very few errors, if any. More work done means more money for the manufacturer.

  • Speed up finances at the back end

 Financial operations in the manufacturing sector can be complex and possibly even chaotic as the company grows. There are likely to be multiple interconnected systems running figures from multiple departments in different locations. Without a streamlined solution, it creates a recipe for preventable errors.

These errors can be very costly for global manufacturing corporations. A single error can lead to delays that may cost the organization thousands of dollars. According to one study by Information Intelligence Consulting, manufacturers lose approximately $300,000 for every hour of downtime.

Consider a specialty chemicals manufacturer that needs to support at least 52 business units across the world. The company processes more than 800,000 invoices monthly. Moreover, the company’s global presence means that the invoices are in different languages and formats. Collating, organizing, and processing all these invoices is no mean task.

Through Robotic Process Automation, the company can automate the entire invoicing process to boost efficiency while eliminating errors.

  • Scaling the adoption of new technologies 

Finally, industrial manufacturers are always on the hunt for new technologies to drive revenue and growth. According to PwC, the industry will spend over $907 billion on new technologies in 2021 and likely more in the future. This massive investment will depend on how well the technologies are implemented and not who spent more.

Three factors are critical in the success of new tech investments – access to the technology, training, and internal support. The new techs must be easily accessible to users, the company must provide sufficient training, and there must be adequate support from the top.

Automation can help in all three areas. RPA robots integrate, connect, and optimize legacy systems so that new technologies are available for implementation in the desired areas. The robots can also facilitate training by making sure that each user receives the correct training resources. Some robots can even provide the actual training.

Most importantly, RPA robots can actively analyze the existing system to help top management identify areas/gaps for consistent improvement.

Now’s the Time

The biggest message is that there’s no time to waste. Your competitors are likely already implementing Robotic Process Automation. If you blink, you could be left behind. Contact NIX Solutions today to learn how to implement RPA.