What does automation mean? Its key types and importance for online stores

Operations have become fast and accurate, errors are almost non-existent, and human effort is invested in creativity and innovation instead of routine tasks, all thanks to what is called automation, which has contributed to reshaping operations and freeing them from the constraints of routine. Automation is no longer just a technical option that can be bypassed, but has become an inevitable necessity to ensure survival and competitiveness in various fields, especially in the vital shipping sector.

In this article, we will answer the question of what automation means, which many people are asking, review its most prominent types and its importance for commercial activities, and highlight the effective role of OTO as a leading logistics platform in the Arab world in simplifying shipping operations using smart automation technologies.

But before that, let us review the development of automation throughout the ages.

A brief history of the development of automation:

Automation began since ancient times as primitive attempts to reduce human effort, using tools such as levers and pulleys, and reached its first peak with the inventions of (Heron of Alexandria) who designed self-operating mechanical devices. With the Industrial Revolution in the eighteenth century, the concept of automation shifted to a new level thanks to steam engines and the Jacquard loom, which is considered the first model of programmable automation, leading to accelerated production and reduced reliance on manual labor.

In the twentieth century, automation developed significantly thanks to the introduction of electricity and electronics, and the emergence of computers and industrial robots, leading to the new millennium where it merged with artificial intelligence and the Internet of Things technologies, so that automation today has become an intelligent system capable of learning, interacting, and making decisions, and is not limited to manufacturing only, but extends to multiple sectors such as healthcare, trade, and services, and constitutes a fundamental pillar in the modern digital revolution.

What is Automation?

Simply put, it is an expression of exploiting the technological revolution in transforming boring routine tasks into smart and smooth processes that occur automatically without human intervention every time, so that it takes over all repetitive and precise tasks without requiring any effort or intervention from you.

Automation aims to harness the power of technology and artificial intelligence to improve efficiency, reduce errors, and accelerate processes. The Kingdom of Saudi Arabia has benefited greatly from automation to enhance its economy and raise the efficiency of operations, as shown in this paragraph.

The importance of smart automation in boosting the economy in Saudi Arabia

A study conducted by Automation Anywhere, a world leader in Robotic Process Automation (RPA), indicates that smart automation could contribute to increasing the size of the Saudi Arabian economy by up to $1.6 trillion. The study showed that the key sectors rapidly adopting automation include:

• Government services and the public sector.

• Banks and financial institutions.

• Insurance.

• And energy.

This reflects the Kingdom's commitment towards achieving the goals of Vision 2030 and enhancing its competitive capabilities.

The Kingdom has introduced a set of initiatives to accelerate the adoption of automation in various sectors, including the import and export sector, which witnessed a reduction of up to 54% in the duration of imports' stay in ports thanks to automation operations. The initiatives also contributed to significantly increasing the efficiency of ports, in addition to the Kingdom establishing the smart city of Neom, which relies on the latest futuristic technologies such as artificial intelligence, cloud computing, the Internet of Things, and advanced agriculture, with the aim of providing a sophisticated environment.

Automation is not just a tool to improve efficiency, but a fundamental factor in building an advanced and sustainable economy that enables the Kingdom to achieve its ambitious aspirations and places it among the leading countries in adopting advanced technology.

There are multiple types of automation, some of which we review below.

Key types of automation

First: Mechanical Automation

This is the simplest and oldest type of automation as it relies on machines to perform repetitive manual tasks. This type of automation is used in factories, especially in assembly lines to automatically assemble products, which increases production speed and accuracy. Mechanical robots are also used for operations such as welding and painting in the automotive industry, which ensures high quality and reduces costs.

Second: Electronic Automation

It means using technology to control industrial processes and reduce the need for human intervention through electronic devices, such as Programmable Logic Controllers (PLCs), sensors, motors, and robots, to improve efficiency, accuracy, and safety.

This type relies on computer systems and Software as a Service to perform tasks that require accurate data processing, for example:

• In office work: Electronic automation is used to perform tasks such as email management, data processing, and generating periodic reports.

• In the financial sector: Automated software is used to perform tasks such as financial account management and conducting financial analyses with high speed and accuracy, which reduces human errors and increases work efficiency.

Third: Smart Automation

This is the most advanced type of automation, combining artificial intelligence and machine learning technologies to improve performance and make informed decisions based on data. These advanced technologies help systems learn and adapt to changing conditions, which increases efficiency and accuracy in many fields.

Applications of smart automation include:

• Healthcare where it is used to analyze medical images and diagnose diseases.

• The financial sector for data analysis and providing investment recommendations.

• Customer service carried out through smart chatbot robots that interact with customers naturally and effectively.

Fourth: Marketing Automation

It means using artificial intelligence and machine learning technologies to improve and implement marketing strategies more effectively, including managing email campaigns, analyzing customer behavior, and personalizing content based on extracted data.

For example, smart systems can be relied upon to send personalized emails based on customer interests and purchase history, which increases interaction and sales opportunities, as well as using automation tools to analyze big data and provide personalized recommendations to customers, such as suggesting new products that suit their preferences, thereby improving customer experience and increasing their satisfaction, enhancing process efficiency, and increasing return on investment.

As an online store owner, you may be wondering about the importance of automation for your business, and the answer to your question is in this paragraph.

The most important benefits of automation for online stores

• Enhancing Efficiency

Automation allows your online store to process orders with greater speed and accuracy, which improves the customer experience and increases their satisfaction. For example, Amazon uses robotic systems in its fulfillment centers, which contributed to reducing the time required to process orders by 50% and increasing delivery accuracy.

This automatic system helps Amazon handle millions of orders daily with high efficiency, ensuring customers receive their orders quickly and without errors.

• Reducing Costs

This is one of the fundamental benefits of automation. By relying on automated systems to manage various operations in your store, such as order processing, inventory management, and customer service, you can significantly reduce reliance on human labor.

For example, automated software can:

• Process orders and automatically update shipping status which reduces the need to hire people to perform these tasks manually.

• Improve inventory management efficiency by tracking inventory accurately and automatically through automated inventory management systems, which reduces costly errors and wasted time in manual inventory processes.

In addition to reducing labor costs, automation also contributes to reducing the operational costs of online stores. Automated systems can operate around the clock without the need for breaks, which increases business productivity and reduces wasted time.

Automation also contributes to reducing human errors that may cause additional costs such as returning wrong products and re-shipping them, or dealing with customer complaints, which contributes to gaining customer satisfaction and enhancing their loyalty to the brand.

• Increasing Competitiveness

Automation plays a pivotal role in increasing the competitiveness of online stores by significantly improving the efficiency of business operations. For example, advanced automation systems contribute to accelerating the order processing cycle, enhancing the efficiency of inventory management, as well as customer service, which leads to reducing the time spent on performing routine and repetitive tasks, thereby allowing employees to focus on other aspects of the work such as developing marketing strategies and improving the customer experience.

Automation also enables online stores to provide personalized and sophisticated services by using data analytics and artificial intelligence tools to analyze customer behavior and provide personalized recommendations, in addition to improving your store's responsiveness to rapidly changing market needs, and managing promotional offers and updating prices dynamically based on supply and demand analysis, which leads to enhancing competitive value, increasing sales opportunities, and thus increasing revenues.

• Improving Accuracy

Automation helps reduce human errors that may occur during manual operations, which improves accuracy and reliability in your online store due to the ability of automated systems to process data accurately and provide detailed reports that help in making informed decisions, thereby ensuring customers receive the correct products on time, which leads to strengthening their trust in the store and performing repeat purchases.

• Improving Customer Service

Automation allows for providing more effective and faster customer service through the use of smart chatbot robots that can handle customer inquiries instantly and around the clock. These robots are capable of providing quick and accurate answers, which reduces waiting time and increases customer satisfaction.

What are the drawbacks of automation?

Despite the significant benefits that automation offers in improving efficiency and reducing costs, it has a number of drawbacks that must be dealt with consciously and strategically, including:

High Initial Costs:

Although automation contributes to lowering operational costs in the long run, its initial costs pose a significant obstacle, especially for small and medium-sized enterprises. Implementing automation requires substantial investments in equipment and software, in addition to expenses for training and technical qualification of employees, and many establishments may not have the financial capacity to bear these costs, which makes them less competitive against larger companies that have the necessary resources to adopt these technologies. Moreover, the payback period for investment in automation may be long, making the strategic decision require careful consideration.

Excessive Reliance on Technical Systems:

The more organizations rely on automation, the more sensitive their operations become to any technical or software malfunction. Any failure in the control network, or a defect in a system component, could cause a complete halt to production or service delivery, leading to massive financial losses. Furthermore, maintaining automated systems requires specialized skills that are sometimes difficult to find quickly, which may increase downtime and negatively affect business continuity. Therefore, automation needs a reliable infrastructure and effective contingency plans to mitigate these risks.

Weakening Human Interaction

In some areas, such as customer service, education, and healthcare, human interaction plays a fundamental role in achieving a positive and effective experience. With the introduction of automation in these sectors, personal conversations may be replaced by cold, automated interactions, leading to a feeling among customers, learners, or patients of not receiving sufficient attention. Moreover, relying on programmed responses or automated answers may not be enough to understand complex situations or specific individual needs, which limits the effectiveness of the service and weakens loyalty to the providing entity. Therefore, a balance must be struck between automation and human efficiency when providing services that require a human dimension.

Privacy Risks and Cyber Threats:

Modern automation relies on the flow of massive amounts of data between devices and systems, especially in environments relying on artificial intelligence and the Internet of Things. This flow opens the door to increased security threats, such as data breaches, system manipulation, or even the use of information in illegal ways. Automation sometimes requires access to sensitive data about customers, employees, or operational processes, making the security of this data a necessity, especially with the increase in cyber attacks globally.

After learning about the meaning of automation, reviewing its most prominent types, its most important benefits for online stores, as well as its drawbacks, we move on to talk about how OTO, the leading shipping gateway and logistics platform in the Arab world, utilizes automation technologies to simplify shipping operations and make them faster and smarter.

How did OTO utilize the capabilities of automation to simplify shipping operations to support commercial activities?

Since its establishment at the end of 2019, OTO recognized the gap in the shipping sector and the problems facing merchants that prevent them from providing a smooth, easy, and fast shipping experience that ensures products arrive with the best quality and shortest time.

From here, OTO utilized the strong capabilities of automation and harnessed various technologies to simplify shipping operations by gathering more than 6 systems in one user-friendly and simple control panel. Merchants became able to ship, manage, track, analyze, and retrieve their orders, in addition to automating all operational processes according to customized rules that suit their needs, and connecting and dealing directly with more than 250 local and international shipping companies, as well as integrating with more than 20 popular Arab and foreign e-commerce platforms.

Let's take an example from the OTO platform about shipping automation:

You can add specific rules to execute your orders and ship them automatically with the shipping company you choose. For example, the following screenshot shows settings for an automation rule that states that if the shipment weight equals 25 kilograms, it should not be assigned to Aramex, assuming, for example, that its prices for heavy shipments are more expensive than others, and consequently, the shipment is assigned to another shipping company.

All of this is done automatically. All you have to do is enter the shipping automation rules according to your specific needs, and then the shipments will be executed without manual intervention from you every time.

There are also dozens of conditions and rules that you can set in the OTO platform to automate your logistics operations and ship your products.

In addition to that, the OTO platform uses smart automation solutions in several aspects, including:

• Tracking shipments accurately and in real-time, which gives customers peace of mind and increases the transparency of the process.

• Enhancing the efficiency of warehouse and inventory management through the OTO PACK application, which divides warehouses into zones to facilitate movement between them, speed up task completion, and automate operational processes related to picking, packing, and so on, in addition to updating inventory in real-time to avoid shortages or surpluses.

• Accelerating the order delivery process by setting customized rules for managing shipping operations and directing shipments to the appropriate shipping company, which contributes to reducing the time taken for delivery and ensuring shipments arrive on time, gaining customer satisfaction.

• Efficiently managing the driver fleet through the OTO Flex application and setting automated rules for task distribution, monitoring delivery operations, and the effectiveness of task completion.

• Providing the ability to extract detailed periodic analyses and reports on your orders and the performance of shipping companies.

In Conclusion

Automation emerges as a fundamental and decisive factor for transformation and innovation in various sectors, especially e-commerce and logistics services, as automation allows for providing faster and more accurate services, which enhances operational efficiency and increases customer satisfaction. It also contributes to strengthening the Kingdom's position as an advanced regional center in adopting modern technologies, supporting the achievement of Vision 2030 goals.

Adopting automation is no longer just an option, but has become essential for investing in the future of business and innovation, where online stores and companies alike can benefit from this technology to achieve sustainable growth, enhance competitive value, and increase profits.