How many of us, on a daily basis, browse through thousands of online products, add them to a cart, and then proceed to pay without considering how the delivery system works? Then we wait for the package with some patience. And if it doesn’t reach on time, we curse the logistics and supply chain systems.
Logistics companies are facing challenging times with events such as the pandemic disrupting online shopping or the Russia-Ukraine conflict disrupting trade routes. Artificial Intelligence, which has recently been stealing the limelight from other emerging technology (read ChatGPT), is not only a life saver but is also revolutionary for the logistics industry.
Consumer behavior and e-commerce have a lot to do with this influx of automation in the logistics and supply chain industry, which includes warehousing and customer support. Ecommerce is one of the biggest customers of the logistics and supply chain sector, especially after the pandemic.
Many ecommerce companies leverage the power of AI to deliver without delay. Walmart uses Symbiotic. Flipkart uses Ekart. Amazon uses Sparrow, a robotic system, in its warehouses, while its AI, Alexa, helps with online shopping.
“Customer expectations are ever-changing and today’s consumers are more discerning and demand complete control over the service they receive. Ecommerce is indeed a driving force in shaping the industry, with its demand for fast, reliable and cost-effective delivery leading companies to test and adopt a range of technologies such as drones, autonomous vehicles and predictive analytics. Ecommerce customers also want real-time visibility into their shipments, which AI can provide through tracking and monitoring technologies,” says Asparuh Koev, founder of Transmetrics.
There is more to AI in the future of e-commerce. A 2022 Juniper research identified India as one with the potential for rapid growth in buy-now-pay-later, predicting user growth from 25 million in 2022 to 116 million by 2027. The reason is the growing use of e-commerce and the growing interest in international goods available through online retailers. In the near future, this is a huge market that only digital logistics and supply chain enterprises will be able to manage.
The revenue in the Indian fashion segment alone is expected to touch US$ 19.86 billion in 2023. Bhaskar Ramesh, Director – Omnichannel Business, Google India commented on the same at the recent India Fashion Forum.
“Covid in particular has changed consumer behaviour, and a lot of these behaviors are sticking. As Covid eased, consumers really went back to what they were familiar with and expected the same digital experience. Hence, on one hand, digital is enhancing the customer experience and on the other hand better profitability of businesses,” he added.
To automate logistics faster and better
We already see logistics companies taking advantage of AI for smooth operations. According to Statista, 40% of respondents in the transportation and logistics industry say that artificial intelligence implementation can help improve inventory management, helping businesses become smart manufacturing and distribution centers. That is, AI can understand complex real-time inventory control dynamics, predict scenarios, recommend actions, and act accordingly.
In India, according to a Business Intelligence report by TechInsight360, the artificial intelligence (AI) spending in the logistics industry has seen a 127% increase during 2018, reaching US$ 26.6 million. This spending is expected to record a CAGR of 41.4%, growing from US$ 49.6 million in 2019 to US$ 560.2 million by 2025.
Riding the AI wave, several logistics companies have upped their game to unprecedented heights.
An example of this is German logistics company DHL, which is using AI to support its business goals by optimizing order fulfillment and aligning workforce skills. Deutsche Post (DPDHL), the parent company of DHL, reported a pre-tax profit (EBIT) of nearly US$8 billion on nearly US$82 billion in revenue in its 2021 annual report.
The company, which has a market capitalization of approx. US$53 billion, made a row of investments in AI vendors, including US$300 million in 2018 for augmented reality in several robotics and IoT focused applications. This year, the company invested US$15 million in Boston Dynamics.
We also see news like Alibaba Cloud, the digital technology and intelligence backbone of Alibaba Group, which powers EasyDispatch, an AI-powered logistics solution in Malaysia. And then there are startups like KlearNow that are rebranding KlearNow.AI to boost their positioning. How exactly does AI help in making logistics more efficient? Cost cutting, warehousing, on time delivery are a given, but what else?
How AI helps in logistics and warehousing
There are many ways in which AI makes logistics more efficient by predicting demand, increasing delivery times, expediting the exchange and processing of documents. But beyond cost reduction, on-time delivery and warehousing, it can make logistics professionals’ jobs easier and more customer-focused, says Kove.
“This can help logistics companies by optimizing fleet performance and ensuring that there are fewer trucks on the road due to better capacity utilization,” he says.
Generative AI: Enter ChatGPT
One possible application of AI in logistics that can bring efficiency is based on generative AI. Enter chatgpt. Currently, Transmetrics has integrated ChatGPT to assist with the jobs of logistics professionals.
“Our first experiment will be centered around the daily routine of logistics sales agents, which involves answering countless tedious emails with requests for quotations. This can be easily streamlined and bring needed efficiency with generative AI,” Koev explains.
Warehouse automation = same day delivery
Another aspect of AI is enabling warehouse automation, which allows businesses to capture and analyze data in real time, improving efficiency and turnaround time for e-commerce companies to serve their customers. . Means one day delivery.
“Warehouse automation is developing at a very fast pace as most of the businesses are now focusing on adopting automation systems in their operations. Especially e-commerce, 3PL and FMCG companies are looking for automation solutions specifically for their warehouses. are integrating, as this heralds an overall transformation. In fact, many other industries are already following suit. While both in-bound and out-bound capacity increases
There is also zero damage to goods and minimal human intervention, says Khurshid Alam, co-founder, Atmos Systems.
World Events Will Always Affect Supply Chains: Can AI Help?
World events such as the Russia-Ukraine war, pandemics and the Suez Canal incident always affect logistics. While most of them are impossible to predict with AI because there is no data to power such prediction, Cove says that as companies begin to experience the effects of such events, AI-powered algorithms Can learn from new data, update forecasts, disruptions, and enable logistics companies to adjust their operations accordingly.
“For example, AI can help with scenario planning and propose rerouting shipments to avoid conflict zones or manage increased demand for certain products due to pandemic-related lockdowns. AI can also help companies optimize their fleets and reduce idle time, reducing the impact of disruptions on their operations,” he says.
We can look at AI as the big guns that were brought in to deal with large scale crises. At the same time, the current competition in the AI market is bound to come up with the most brilliant solutions for logistics driven by e-commerce and manufacturing growth.
Navanvita Bora Sachdev is the editor of The Tech Panda and a freelance writer.
.
This news is auto-generated through an RSS feed. We don’t have any command over it. News source: Multiple Agencies: hindustantimes, techrepublic, computerweekly,
