Intelligent Document Processing: Fueling Your Supply Chain with Automation

Supply chain document automation uses intelligent document processing to read purchase orders, invoices, bills of lading, shipping labels and warehouse receipts, and turn them into structured data without manual entry. Documents pile up at every stage of the supply chain, from planning and procurement to production, distribution and returns, and keying them in by hand is slow, error-prone and expensive. An IDP tool classifies each document, extracts its fields and tables, validates the data and sends low-confidence fields to a person for review.

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.

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:

• Warehouse robotics
• 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.

Data entry errors in these processes cost businesses money, and automated data capture can reduce them considerably.

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 make a real difference to any business's 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:

1. Planning

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.

3. Production

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.

4. Distribution

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.

5. Returns

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:

• Shipping labels
• Bills of Lading
• Warehouse Receipts
• CMR consignment notes
• Proforma invoices
• Inspection Certificates
• Dock Receipts

You can automate the data extraction from these semi-structured and unstructured documents in different formats using document AI software in these steps:

1. Document preprocessing through the OCR scanner involves removing noise and deskewing.
2. Document classification that identifies the format (PDF, jpg, and png), structure, and type of document.
3. Data extraction extracts the values of unique key identifiers and table extraction does this line item-wise.
4. Data validation that detects inaccuracies of extracted data and flags them.
5. 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 transportation 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 consignment notes

A CMR consignment note is the standard transport document for international road freight, named after the Convention on the Contract for the International Carriage of Goods by Road (CMR). It lists the sender, carrier and consignee, the places and dates of pickup and delivery, and a description of the goods, and it serves as evidence of the contract of carriage and of the carrier's receipt of the goods.

#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 dock 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.

Docsumo reads each document you upload and extracts the data, whatever the document type. For logistics-specific steps, see our guide to logistics automation. 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. Cuts processing time to under 5 minutes per document

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. Save $15 per processed document

Use Docsumo’s APIs for document classification, key attribute identification, and data verification to free up your team’s time from redundant paperwork and cut processing and back-office costs.

3. Achieve 99% field-level accuracy

With Docsumo’s human-in-the-loop review feature, you can quickly verify data and increase the accuracy of your downstream processes.

Docsumo features that help with supply chain documents:

1. Ease of use

Upload the data in the web app or send it through Docsumo API and the processed output is ready in minutes. It can be downloaded or sent to other software.

2. Data safety

Docsumo is SOC 2 Type 2 and ISO/IEC 27001:2022 certified, and HIPAA and GDPR compliant.

Benefits of intelligent document processing for supply chain automation

From scanning documents with 99% field-level 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:

• Process efficiency
• Time-saving
• Real-time decision making
• Predictive analysis
• Specific analytics

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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