Artificial intelligence is breaking into every sector imaginable and the world of logistics isn’t left behind.
Tractica, an independent research firm predicts that the sales of logistics and warehousing robots will hit $22.4 billion by 2021.
For example, the supply chain brand United Parcel Service saves 10 million gallons of gas annually due to insights of Big Data alongside AI.
AI technology is already bringing in groundbreaking innovations to logistics and changing the supply chain through machine learning and deep learning.
All of these technologies are part of the new industrial shift – Industry 4.0 – that is already disrupting all industries.
Even back in 2016, the logistics sector experienced a surge in interest and investments from numerous companies, DHL and IBM included, who explored the impact of machine learning processes and AI, so let’s take a look at six ways how AI will change logistics.
1. Better Supply and Demand Predictions
Demand forecasting is one of the most vital changes AI is going to introduce into logistics.
The predictive analytics aspect of artificial intelligence will enable brands to make positive changes to their operational patterns based on the predictions AI makes.
AI’s capability to analyze the factors that ensure efficiency helps its demand prediction accuracy. It can predict patterns or trends based on varying variables such as real-time sales, weather, etc.
For example, the ability to forecast the probable number of sales from a specific location or the number of delivery vehicles required for an order will ensure the seamless functioning of the logistics, transportation, and supply chain team of any business.
If used with the Internet of Things, artificial intelligence can even determine when a delivery truck needs servicing, to avoid a breakdown during deliveries.
2. Accurate Information Validation Processes
With cloud business management services from the SaaS realm (inclusive of logistics software) becoming the norm, there is so much information floating around in B2B and B2C companies that if not identified and segmented adequately, it’ll be negatively disruptive.
Ensuring that customer information is correct manually can be a massive task.
Other aspects like validating items ordered, linking the products to the particular customer and fixing all botched orders are also tedious tasks, but AI and automation can simplify them.
AI validates the information in seconds.
It’s predictive features always ensures that the fastest route is identified to make the item get across to the customer as quickly as possible.
3. Smart Warehousing
Robots operate the Warehouse of the UK online grocery brand Ocado. The company fulfills over 65,000 orders from customers weekly utilizing AI robots to lift, segregate and move items, which human workers subsequently pack.
The AI ensures maximum space usage by placing up to 17 boxes on top of each other. It’s so intelligent that frequently ordered items are never kept at the bottom but on the top.
This makes it easy to reach such products when orders are made, saving both the time of customers and employees.
Even e-commerce giants Amazon utilize AI robots called Kiva to lift and distribute goods to their various warehouses in a few minutes.
The automation abilities of artificial intelligence will positively affect logistics to create a smoother and fast-paced work environment.
4. Instant Solutions and Corrections Throughout the Chain
In logistics, you need adequate data to make any decisions – like choosing the best route, picking the right carrier for each delivery, and scheduling. Human labor is quite inefficient for such tasks and prone to more errors.
AI, however, has vast computing capabilities that enable virtually instant optimal solutions thanks to drawing decisions from numerous data points in a few seconds.
It will also design corrective measures to avoid negative situations.
Thanks to machine learning, AI will increase its knowledge over time, as it encounters different situations, making it better at forecasting trends and wading through emergencies.
Instead of relying on real-world data and situations only, AI can also be taught through digital twins, a concept already being explored by DHL.
5. Improved Analytics of Big Data
Big Data accrued through different channels can’t be used in its unrefined state, but AI algorithms can analyze these vast amounts of data and connect data points that humans might have missed.
Using AI for Big Data analysis helps predict shipping volumes, times, and design future sales plans based on historical data and trends.
There’s really little that AI doesn’t include in complex calculations – even things like geopolitical landscapes and disruptive weather patterns are taken into account to ensure a well-rounded decision-making process.
Artificial intelligence is also capable of gathering data from various touch-points, analyzing it and crafting out patterns that can assist in implementing positive changes in the logistics of any brand.
Due to the ton of structured and unstructured data in the logistics niche, the ability of AI to intelligently combine and put them to profitable use is crucial.
6. Streamlined Deliveries
When a customer makes an order, there needs to be a strong system in place to ensure that the item is delivered through the proper channels, is sealed correctly and the customer is informed about when it’ll arrive.
AI can manage multiple data points and predict the time orders are meant to get to the customer much faster than any human could, so delivery becomes efficient and contributes to the customer experience.
Certain companies have even begun introducing AI drones as a part of delivery logistics.
The changes AI will bring to the logistics industry are promising and will provide solutions that will become the norm.
It will help businesses in the supply chain and transportation niche to be more efficient and work smoother, provide a more streamlined experience and be alerted about seasonal changes and opportunities.