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The Procurement-Robotics Connection

May 1, 2019
As more companies adopt robotics process automation, procurement stands to benefit from its ability to replace some of the repetitive, time-consuming, lower-value processes.

The day when procurement professionals and robots sit side-by-side in an office environment, working on contracts, negotiating with vendors, and expediting orders together, is probably still pretty far off. However, in other areas of the work world, robots are already carving out a place for themselves.

In the supply chain management arena, for example, collaborative robots (“cobots”) are helping pickers fulfill orders faster, and autonomous drones are helping to identify and track vehicles out in the distribution center yard.

“I feel like I’m living in a science fiction novel all of the time,” Cisco’s Jack Allen told an audience of attendees at the NextGen Supply Chain Conference in mid-April. All of these new developments are happening now because we imagined them a long time ago, he added, and are pushing more companies to find new ways to digitize their supply chains.

Also at the conference, IDC’s John Santagate talked about how robots are starting to “hit cruising altitude,” and that their place in the business world has expanded well beyond just “autonomous robots moving pallets around in a warehouse or DC.”

Still Skeptical…

A recent Organization for Economic Cooperation and Development (OECD) report backs up these assertions. In “The Future of Work,” the group discusses how automation, robots, and globalization are impacting the workplace and world governments. In many cases, human workers are skeptical (if not downright dubious) about the robot’s place in the workforce.

A process of “creative destruction” is under way, OECD writes, whereby certain tasks are either taken over by robots or offshored, and other, new ones, are created. For proof, it points to the fact that employment in the manufacturing sector has declined by 20% over the past two decades, while employment in services grew by 27%.

“This has contributed to labor market polarization: the shares of low-skilled and (particularly) high-skilled jobs have increased, while there has been a hollowing out of middle-skilled jobs,” OECD points out in its report. “This trend has also been driven by skill-biased technological change, a process in which technological change mainly benefits workers with higher skills.”

Looking ahead, the organization says 14% of existing jobs could disappear as a result of automation in the next 15-20 years, but adds that another 32% are likely to “change radically” as individual tasks are automated.

“Together with changes in preferences, business models, and contract types, this means that individuals will face deep and rapid changes,” OECD writes. “Many will have to change not only their job but even their occupation, and most will have to modernize their skills and working practices.”

The Verdict is Still Out

According to Pew Research Center, most Americans are already anticipating widespread job automation in the coming decades, with 82% of adults saying that by 2050, robots and computers will definitely or probably do much of the work currently done by humans. Just about half of U.S. adults say job automation through new technology in the workplace has mostly hurt American workers, while just 22% say it has generally helped.

While people think automation will likely disrupt a number of professions, Pew says they are less likely to foresee an impact on their own jobs. Around three-quarters of U.S. adults (77%) said it was very or somewhat likely that fast food workers would be replaced by robots or computers in their lifetimes, while about two-thirds (65%) said the same about insurance claims processors. Around half said automation would replace the jobs of software engineers and legal clerks, while smaller shares said it would affect construction workers, teachers, or nurses.

“Three-in-ten Americans said their own jobs would become automated in their lifetimes,” Pew writes, with young adults and part-time workers especially likely to have been personally affected by workforce automation. “Many Americans say there should be limits on job automation – and majorities support certain policies aimed at doing so.”

RPA in Procurement?

As organizations work out the details of how to best blend robots and humans, procurement stands as one department that could benefit greatly from more robotic process automation (RPA). Defined as an emerging form of business process automation technology based on the notion of software robots or artificial intelligence (AI), RPA could help replace some of the repetitive, time-consuming, lower-value procurement processes that humans have historically managed, according to Gartner.

For example, one financial services company is creating a searchable and easy-to-audit contract repository. Gartner says the initiative will pair optical character recognition (OCR) technology with RPA—initially to digitize 8,000 contracts and add them to the contract life cycle management system. Procurement then plans a proof of concept for RPA technology to expedite auditing and contract review.

“RPA applications can save time and money,” Gartner’s Gerald Stevens points out. “Additionally, they can free up procurement to partner with the business, collaborate and innovate with suppliers, surface emerging risks, or provide other value-added activities.”

About the Author

Bridget McCrea | Contributing Writer | Supply Chain Connect

Bridget McCrea is a freelance writer who covers business and technology for various publications.

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