AI: Reshaping the logistics world

Published: Monday, September 19, 2016

The complexity and dynamics of any logistics process is dependent on product life cycles, transnational links and the production process between companies.

In the digital era, this demands a quick, reliable and efficient system.

World cargo-chain leader DHL says the logistics industry is being transformed into the realm of artificial intelligence (AI) and personalization which features autonomous ‘intelligent supply chains’ that employ data-driven and machine learning technology that can open up a new dimension of optimization.

“Over the next four to five years, robotics & automation technologies will have a very high impact on the logistics world as they support zero-defect processes.”

This technology, according to its latest issue of the Logistics Trend Radar, could begin transforming manufacturing, logistics, wareh-ousing and last-mile delivery at the end of this decade.

The 55-page report, which for four years now has been hailed in the global logistics community as a “living tool that captures the development of society, business and technology trends” which examined the “macrotrends” and “microtrends” in the sector, said AI will transform it all.

The signs are already apparent with many companies turning to machines with AI to run logistics and warehouses.
The report said “autonomous logistics” is deemed efficient than the old system.

“First generations of autonomous shuttles and forklifts (e.g., Linde and Balyo) are being deployed in clearly defined and controlled areas of the warehouse, unlocking new levels of process efficiency and performance. Looking up to the skies, unmanned aerial vehicles (UAVs), or drones, still require a bit more time before mainstream adoption,” it said.

“The commercial use of UAVs is heavily regulated in most countries; however first tests have demon-strated the future potential of UAVs especially in rural delivery scenarios.”

This technology, the report said, could begin transforming manufacturing, logistics, wareh-ousing and last-mile delivery as soon as the end of this decade.

Remolding the logistics industry

Over the next four to five years, robotics and automation technologies will have a very high impact on the logistics world as they support zero-defect logistics processes and enable new levels of productivity.
The new generation of collaborative robots and automated solutions with significantly improved performance and enhanced sensing capabilities offers a genuine alternative to manual handling.

Geoff Walsh, DHL UAE’s Country Manager, noted innovations in technology have already impacted the way things are moved in warehouses and elsewhere.

“The breakthroughs in sensor and imaging technologies have resulted in a new generation of self-driving vehicles that are more flexible and reliable than ever before. From autonomous forklifts to driverless trucks, self-driving vehicles will transform logistics by unlocking new levels of safety, efficiency, and quality,” he said.

“These are just a few examples of what we see coming very soon to our industry, which means that we need to be prepared and two steps ahead too quickly adopt this new technology within our network and that is exactly what we are doing at DHL,” he added.

Self-thinking supply chains

Mr. Walsh said the intelligence behind having automated and self-thinking supply chains or what it is most prominently called Self-learning or ‘machine learning’ systems will become a game-changing enabler for completely autonomous data-driven optimi-zation in logistics. With minimal/no human intervention, a self-learning system will adapt and improve its algorithms as it receives more data, improving its results over time.

This will enhance productivity and enable logistics experts such as DHL to eliminate waste and reach new levels of efficiencies.

The Internet of Things (IoT) and its potential to connect virtually anything to the Internet and accelerate data-driven logistics is also high on the agenda of most major companies.

Cisco estimated that by 2020, more than 50 billion objects will be connected to the Internet, presenting an immense $1.9 trillion opportunity in logistics.

Until now, only a few IoT applications in logistics have had a substantial business impact, due to security concerns, an absence of standards in the fragmented logistics industry, and the consumer market focus of recent IoT innovations.

Looking ahead, large-scale IoT deployments will require new ‘logistics-ready’ solutions that ensure security and common connection standards.

Another concept of deploying the essence of IoT in the future is having connected warehouses, which can increase the transparency and localization of all assets through the tagging of individual items, pallets and operational hardware.

These smart objects are assigned and can transmit information about their current order, content and location, enabling automated inventory management with real-time visibility on inventory levels and item conditions.

IoT can also drive higher levels of worker health and safety through a connected workforce concept, and can be additionally used to optimize lighting, heating, and cooling within facilities.

Thus, it is not surprising that IoT has become a priority on the agenda for most major companies. However, only a few logistics applications with substantial business impact have materialized so far.

IT trends

According to DHL, there are two main trends related to IT that is reshaping the logistics model and capabilities; these are Big Data and Cloud logistics.

Cloud computing offers open, web-based access to a choice of flexible, configurable on-demand logistics-related IT services that can be easily integrated into supply chain processes (e.g., orders, billing and track and trace services).

Pay-per-use models allow companies to react more flexibly to market volatility, paying only for the services they need and use, instead of having to invest in a fixed-capacity IT infrastructure.

Companies using cloud-based solutions can budget for them as operating expenditure.

Big Data, on the other hand, is transforming the logistics model through the power of data-driven insights.

Unprecedented amounts of data can now be captured from various sources along the supply chain. Capitalizing on the value of big data offers massive potential to optimize capacity utilization, improve customer experience, reduce risk, and create new business models.

However, logistics providers will still need to master the integration of structured and unstructured data (social, images, video, etc.) from multiple data streams to harness the full potential of big data. This coupled with the advancement of analytics technologies will further unlock exciting new ways to utilize data-driven operating efficiency.

Perks of AI

At the moment, the logistics model and capabilities do not have complex problems that require AI to fix. Therefore, it is more about the benefits that AI will bring once fully integrated and deployed within our network.

AI and robotics undoubtedly have unique perks when fully utilized. These include:

Increased efficiency through real-time operational analytics from wearables, enabling proactive correction;
Revolutionary potential for hands-free task execution through gesture- and thought-control technologies;
Significant reduction and even elimination of work-related injuries, raising health and safety standards;
Automating tasks like co-packing helps to improve efficiency and reduce inventory levels and cost; AND
When robots are deployed on repetitive and physically strenuous tasks, warehouse workers can focus on more complex tasks and exception handling.