Logistics and supply chain is an industry with high level of repetitive and laborious tasks, making it an ideal candidate for automation.
Artificial intelligence is the key catalyst for change in almost every industry today and each one is influenced in different ways. In the last 2 weeks, we have shared about how technology has influenced healthcare and e-commerce sectors. In this week’s industry deep-dive, we feature new technological applications and AI use cases for the logistics and supply chain industry.
With the booming e-commerce and online medical consultancy services, the logistics sector is flushed with increased demand for last mile delivery; delivery to individual consumers instead of mass delivery to the malls. The last mile delivery makes up 28% of a product’s total transportation cost and this poses challenges and opportunities – while it is difficult to levy high delivery fees for small quantity and small ticket items due to low profit margins, voluminous orders can still be advantageous. Industry 4.0 for logistic sector is the marriage between technology advancement and logistics. This is accurately described as the “physical-digital-physical leap”. Physical activities are recorded as digital records, which are used for analysis and visualization. Applying algorithms and commands to the digital findings triggers automated actions in the physical world.
Global Supply Chain
Even before job orders begin at the origin, logistic service providers and manufacturers can anticipate consumer demands. Powered by data, analysts can forecast trends and demands based on historical data to anticipate demand of logistic services. Taking it to the next level, businesses can tap on AI to scrape unstructured data to anticipate consumer demands using current trends. Other applications of predictive functions include prediction of routes and traffic patterns to mitigate possible delays, and disruption in supply chains.
Large warehouses adopts the use of swarm AGV robots to do unpacking, sorting, and arrangement of goods. AI algorithms are also implemented to determine which products are in higher demand and place them in racks closer to packing station to minimize movement required by human and machine pickers.
Other prominent technologies for warehouse operations are multishuttle system, optical recognition and smart glasses. Multishuttle systems are used with automated storage and retrieval system to move goods without human intervention. Optical recognition automates the sorting process by scanning items. This can be linked up with the diverts in conveyor belt system to complete the sort. Smart glasses enhance the efficiency of pickers by directing them to the right places in the warehouse. All of which increases the efficiency of the warehouse operations.
Radio frequency Identification (RFID) are commonly implemented to improve visibility of goods moving along the supply chain, and keep inventory.
Blockchain technology introduces smart contracts which is useful for alleviating the need for repetitive documentation and inspection work.
Even though drone delivery has yet to be implemented for regular commodity goods, it is already being used to deliver medical supplies in Africa, Europe, and America. The success of this implementation is promising for our sci-fi future – endless units of commercialised drones delivering anything, anytime, anywhere.
Moving forward, improvements are needed for drones to navigate and deliver goods in regular neighbourhoods. Acceptance of the commercialised drones at the societal level will also be a challenge. Concerns such as privacy concerns is bound to arise if drones are to hover past residential areas. Governance of drone usage is still unclear and will continue to be underwhelming as regulators are inexperienced in the management of the air space and new technology. Overall, societies are approaching drones with caution for good reasons (specifically military use drones). Recently, unauthorized drone activities caused a mayhem in Singapore’s Changi Airport as the unmanned aircraft systems flew in restricted airspace, leading to flight delays.
Recognising the challenges, industry players are expecting to combine drone operation with trucks which are able to serve as the centers for drone to dispatch parcels remotely.
GIF from Hitach.eu
One of the key challenges of last mile delivery is when the recipient is unable to sign off the parcel. As such, delivery providers need to be able to optimise the driver’s delivery schedule to accommodate to the customer’s requests as best as it can.
In the competitive delivery climate, customer service is important to many of the providers. E-commerce which are customer-centric would partner with logistic services which are reliable and provide the same good service as they would themselves. In fact, a survey of 80,000 e-commerce consumers in South East Asia revealed that 34% of the SEA consumers see parcel delivery as the greatest pain point in e-commerce. With over 90% of customer complaints related to transit time and late delivery, there are still room for improvements for last mile delivery in the region.
Self-driving cars which are partially or fully automated are still a dream. Many test drives have taken place around the world. The success of autonomous vehicle can be extremely useful for the last mile delivery by reducing the frequency of “navigate-stop-park-deliver-drive” cycles.
With 3D printing, factories around the world will ship and store in mostly raw materials, and print goods on demand. This can reduce wastage of resources and simplify transportation needs with regularized goods (think: fixed weight and dimensions for the perfect Tetris in containers).
Logistics and supply chain is an industry with high level of repetitive and laborious tasks, making it ideal candidate for automation. Check out our earlier article you wish to find out more about what can be automated. There is endless potential for tech applications in the logistics industry and this is only the beginning.