Why OCR-Only Supply Chain Automation Fails

Today, industrial automation is rapidly making the “Jetsons” cartoon a reality. Supply Chain Dive reported, “Annual installations of industrial robots will jump from 450,000 a year in 2015 to 600,000 in 2022.” Thankfully, automation advances have arrived at the perfect time. 

Labor shortages and the proliferation of e-commerce are driving the increased demand for efficiency in today’s unsteady supply chain. As companies begin incorporating baseline RPA technologies, such as OCR, many are getting stuck by the limitations of some without seeing the advantages of using automation for more data-driven processing

What Is OCR-Only Automation?

Optical character recognition (OCR) is automation software designed to convert digital document images into editable text. In practice, this process involves scanning a document, such as a paper bill of lading, into a computer. OCR then turns the image into auto-populated editable text available for email or data entry.

OCR’s core goal is to automate the tedious task of copying paper data into a computer system, thus reducing the amount of physical storage space a business needs. Although this may sound appealing to those responsible for that data entry, OCR in the supply chain is extremely limited in scope. Although OCR can read and convert text, it cannot act on that data.

OCR-Only Automation Requires the Next-Best-Action, Acting on the Information

Because OCR-only automation is limited to simply digitizing documents, freight management companies still must decide what to do with the conversion. Although the next steps can be done by humans, incorporating artificial intelligence (AI) is the best way to optimize a document managing system for shipping.

Integrating AI and OCR significantly increase visibility and system communication. AI can take digitized documents, update the TMS, share them in the forwarder’s platform, and even send a text message. Because OCR cannot respond to emails, AI would also enable supply chain automation to interact within its system abilities with the data, employees, and clients as needed.

OCR Is Also Very Expensive on Its Own

The ROI of robotics process automation is an importantant consideration when implementing a new tool. Despite being a baseline automation tool, OCR is a significant upfront investment. To properly utilize the tool, there are hardware, training, and other component costs to satisfy. 

Additionally, it’s crucial to consider the soft and hard ROI of automation that requires training. In the end, the costs of launching OCR-only automation could be the same or higher than the costs to implement a comprehensive RPA solution with advanced OCR, AI, and more. Automation is only helpful if it is beneficial and cost-effective within its intended purpose.

Machine Learning Integration With Supply Chain Automation Tools Amplifies the Process

Incorporating machine learning (ML) can take OCR in the supply chain to an even higher level.  With OCR pulling data from documents and AI acting on it, ML takes it a step further with the ability to craft custom replies amidst changing conditions. 

In an RPA that integrates these three automation components, data drives automated decisions despite limited trucking capacity or sudden airfreight delays. This is especially helpful for freight management companies who utilize chatbot technology on their website. Full RPA integration provides a better customer experience, leaving fewer follow-up calls on topics available on the website or customer-facing portals. 

Realize Complete Supply Chain Automation With RPA Labs

Utilizing baseline RPA technology such as OCR may have some benefits. However, it still results in a process that must be supervised and attended to closely. Full workflow automation will let RPA do the virtual heavy lifting, whether companies are ready to go all-in or begin with RPA document management. To learn how supply chain automation can revolutionize and optimize your business logistics productivity, schedule a demo with RPA Labs today.