AI in Logistic, Supply Chain, Fulfillment?
Artificial intelligence (AI) has taken the logistics industry by storm, already showing significant improvements in numerous applications across supply chain, logistics, fulfillment, and transportation.
Artificial intelligence in logistics has the potential to provide improved planning and forecasting capabilities, increased productivity, lower operating costs, improved safety, and faster delivery times. Many logistics giants such as Amazon, FedEx, and UPS have implemented the technology into their operations, leading many to believe that AI-based solutions could soon dictate the way third- party logistics (3PL) companies operate.
AI for Logistics and Supply Chain
AI technology is transforming the logistics industry by offering transportation companies and 3PL operations improved performance and greater cost savings. Applications of all types have experienced the positive facets of AI in their operations, including Fashion & Apparel, Beauty & Cosmetics, Lifestyle, Sports, MLM, Nutritional Supplements, Health Foods, Beverages, Packaging, Plastics, Automotive, Building Materials and more.
Artificial intelligence is the ability of a machine or computer to perform human-like tasks and imitate intelligent behavior, including actions that involve learning, thinking, reasoning, and decision-making. Machine learning is a subcategory of AI. Machine learning typically involves computer systems that can learn and adapt without human assistance or ongoing programming. It uses statistical models and algorithms to analyze data and gradually improve its accuracy.
Many AI capabilities, such as tracking, forecasting, and visual recognition, have enabled 3PLs to improve their operations and gain a competitive edge in their market niche.
Here are some of the ways artificial intelligence is impacting the future of logistics.
- Inventory Management Systems
Third-party logistics and distribution companies have been using AI in their inventory management systems for years. With an AI-powered system, companies can automatically see inventory levels and initiate replenishment orders based on product demand. These capabilities minimize manual inventory tracking and help ensure products are immediately available when needed.
- Machine Vision and Robots
Mobile robots use computer vision to efficiently and safely navigate a warehouse environment without requiring human interaction. These innovative devices offer distribution companies faster and more precise options for performing basic warehouse tasks than conventional methods such as conveyors, forklifts and manual transport. Robotics are already commonplace in many technologically advanced 3PL operations, helping to streamline work and deliver significant cost savings.
- Chatbot
Many logistics companies use chatbots to take customer delivery requests, answer questions, and provide delivery updates. These AI-powered devices can save companies time and money by streamlining communication on the operational front end and eliminating human interaction. More importantly, chatbots can give small and medium-sized businesses the ability to provide customer support 24/7 with minimal costs.
- Autonomous vehicles
Autonomous trucks and drones have the potential to significantly improve the logistics industry, offering a range of benefits that can help companies reduce costs, increase efficiency, and maximize safety. These vehicles are equipped with cameras, radar sensors, and other advanced features to enable autonomous driving without human interaction. Many states have already approved the deployment of commercially available autonomous trucks.
- Route planning
AI-powered navigation systems can optimize transportation and shipping routes and solve logistics challenges, resulting in cost savings and faster delivery times. Route planning uses advanced algorithms and AI predictive analytics to calculate the most efficient routes and logical stop sequences to minimize driving time and increase fuel efficiency.
- Predictive maintenance
Predictive maintenance capabilities alert staff to potential problems with machines and equipment in the warehouse and on the road by analyzing real-time data collected by pre-installed sensors. This data allows technicians to perform necessary maintenance tasks before a problem occurs, preventing extended downtime and saving significant money on repairs.
Disadvantages of Artificial Intelligence in Logistics
While AI for logistics has the potential to improve the industry, there are potential drawbacks, including:
- Privacy and Security: In its early stages in the logistics industry, AI is vulnerable to cyberattacks that can cause significant disruption to a company’s operations. Hackers can gain access to the system and steal sensitive financial information. There is also the risk that malicious monitoring devices could collect facial images and other biometric data without proper security measures.
- Accurate Data Collection: While AI technology can be incredibly accurate, it is prone to errors because it relies on algorithms and data in the early stages of development. In some cases, these systems may not be able to react or adapt when something unexpected happens, potentially causing a delay or accident that a human operator could have prevented. These factors are the most significant concerns for drones and autonomous vehicles.
- Startup and maintenance costs: AI in logistics comes with startup costs and system maintenance requirements, including new software, hardware, drones, and autonomous vehicles. Hiring staff to install, manage, maintain, and operate this equipment will also incur additional costs as AI gains popularity. While larger logistics companies may have the capital to invest in these technologies, smaller 3PL operations must determine whether the benefits are worth the cost.
- Job Loss: As more companies implement AI into their processes, the possibility of human job losses increases. Truck drivers could be among the first employees affected by the arrival of autonomous vehicles on the logistics scene. More significantly, robotics could make some warehouse roles, such as labeling, manual assembly, picking, and packing, obsolete.
Looking to the future
Artificial intelligence has the potential to revolutionize the entire logistics landscape, just as mobile technology and the Internet have streamlined our daily lives.
As more companies discover the benefits of AI and as the technology develops, AI capabilities will become more efficient and accurate. While many 3PLs have already implemented the most basic AI-based systems into their operations, the mainstream application of more complex systems, such as robotics and autonomous vehicles, will soon follow.
Transportation companies and 3PLs must assess the potential risks and benefits of AI, while developing strategies to leverage the positive impacts on their operations. This way, these companies can provide better customer experiences, improve their productivity and efficiency, and create new employment opportunities to minimize the impact on the labor market.
How eShop Logistic can help you
Logistic professionals are committed to using advanced technologies, including artificial intelligence, to improve production and increase efficiency throughout the supply chain. We implement and manage Logistics operations services, Supply Chain services, Fulfillment services, for small and large brands, managing inbound, warehousing, pick & pack , returns management, transport management and vas solutions .
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