Industrial Automation Magazine India

AI has been identified as a key driver of digital transformation in logistics

Published on : Friday 04-08-2023

Kusum Sharma, Head of Supply Chain, Logistics Planning & Digital Transformation, Mercedes Benz R&D India.

The logistics and warehousing sector is greatly influenced by digital transformation. What are the factors driving this change?

Over the last decade, digital transformation has been changing the logistics business comprehensively. More and more digital technologies are introduced by a broad variety of stakeholders – ranging from global logistics service providers, software, and tech-enterprises to small innovative start-ups.
 
Relevant technologies range from tangible solutions for improved supply chain execution like autonomous picking robots or last-mile aerial drones to non-tangible data driven solutions like cloud-based visibility or partner collaboration platforms that increase operational excellence, and thus add significant value to the entire logistics chain.
 
Artificial Intelligence (AI) has been identified as a key driver of digital transformation in logistics. This is mainly due to the immense amount of structured and unstructured data that exists in this area. However, when properly used with digital technologies, this can elevate logistics operations to the next level! The main advantages of artificial intelligence in logistics are lower costs and increased flexibility.
 
What are the technology trends that are revolutionising modern distribution and fulfillment centres?
These trends may be summarised as:
- Automation of assembly lines, IoT sensor based data collection, performing analytics on the data collected and making real time decisions
- Automation and robotics technologies, including automated storage and retrieval systems (ASRS), conveyors, palletizers, sortation systems, autonomous mobile robots (AMRs), automatic guided vehicles (AGVs), for streamlined operations
- Process-oriented automation software that leverages scanners, barcodes, to streamline the data collection and integration process
- Autonomous mobile robots (AMRs) to deliver everything from intricate picking fulfilment to managing space efficiency by moving pallets and large payloads not required immediately to remote/free locations, and
- Dark warehouses, which are completely automated and require no human involvement.
 
How is robotics in general, AMRs/AGVs in particular, supporting these endeavours?
Robotics technologies are getting more smarter and flexible:
- Robotics has improved the costs of operations and managed SKUs growth, manage complex picking and packing needs, choose optimal paths on the manufacturing and distribution floors
- Robots can manage loads of heavy and delicate weight, large and small, or a combination thereof
- Robots are applicable in chemical or pharmaceutical industries where careful handling is a must
- AMRs and AGVs can assist in Transportation (tuggers, tow AGVs, guided carts, conveyors etc.), and mounted arm tools for picking, sorting or handling various items
- Reduce downtimes: AGVs and AMRs can operate round the clock, reducing or even eliminating downtime to keep up with the rising consumer demands. With today's advancements, maintenance and service checks are nearly trivial.
 
Digital transformation of Intralogistics is incomplete without corresponding change in Warehousing as well as Shipping & Distribution. How are these segments performing together?
There has been a considerable improvement in technological evolution in warehousing operations as well as shipping and distribution areas. The business expansion, complex supply chains, and rising competitive gaps have compelled logistics leaders to elevate operational standards to stand apart from their peers and succeed in the market. Digital solutions for logistics enhance collaboration and sharing, increase the flexibility of internal operations, and reduce efforts spent on otherwise complex tasks.
 
Integrated digital logistics platforms implement powerful data-driven insights to optimise operations, solve internal inefficiencies and better customer interactions. Logistics digitalisation enables data analytics that further improves operational visibility and connectivity between systems, allowing products to move seamlessly through the value chain.
 
Shipping and distribution digital solutions automate more of the mundane tasks, freeing up your workforce's time to work on more valuable and revenue-generating processes. Then, you gain complete visibility into integrated digital logistics operations like order management, warehouse management, fleet management, financing, customer service, customised pricing, etc., with all these operations benefiting from digitisation.
 
Such a connected, resilient and agile digital logistics platform provides a more customer-oriented, efficient and proactive approach to managing internal operations and costs.
 
What are the software platforms available that facilitate this transformation?
Cloud technology, advanced analytics and digital twin platforms are leading digital technologies/solutions in logistics. These platforms enable efficient management of the transport and logistics operations:
• Digital solutions for logistics allow vendors to store, analyse, and manage shipping documents and link the critical documents with the related business processes.
• A centralised digital logistics platform also allows customers to gain greater insights and control into supply chain management. They can easily track products and order movement in real-time. Such transparency is the basics to customer-centric transport and logistics management.
 
The platforms run on AI and machine learning technologies which increase the competency of the transport and logistics industry. These technologies not only accelerate transport and logistics digitisation but allow vendors to service customers in a focused, fast, and flexible manner.
 
Expediting invoicing and payment solutions (SAP FICO/HANA): Integrated digital logistics solutions eliminate the need to chase down buyers and manually update the freight payment processors and shippers. Automated digital solutions for logistics send out reminders for pending invoices, therefore, maintaining a steady flow of cash throughout.
 
Logistics digital solutions, after enhancing core business processes like customer engagement, billing, and account management, enhance the overall customer service experience throughout their journeys. Digitisation in transport, supply chain management and logistics also helps in predicting future demands and market forecasts.
 
Better customer engagement and retention: A centralised digital logistics platform enables a single view of your customers across enterprises and third-party service providers so that you can quickly respond to inquiries and behavior changes and expedite issue resolution.
 
These digital solutions for logistics instantly share data between all parties and systems to ensure transparency and visibility; and provide optimised results to improve operational efficiency and lower costs, for instance, the fastest and most cost-effective routes to destinations.
 
Allow real-time tracking of goods and vehicles through GPS-enabled services: Such a versatile combination of digital technologies in logistics offer fastest shipping, reduces order delays, and reduces delivery costs, broadening the gap between you and your competitors.
 
How is 5G impacting the logistics and warehousing scenario given the importance of connectivity in IIoT based automation?
With 5G, the process of how goods get from factory to customer will be revolutionised through next-gen fleet management, asset tracking and last-mile delivery.
 
Here, we take a deeper look into these three aspects of the supply chain:
 
Fleet Management
Traditional fleet management and telematics tools can plot and track driving times and routes by having a physical device plugged into each vehicle. These devices connect with an application that gives managers access to vehicle data and enables communication with the driver.
 
With 5G solutions, much more functionality can be enabled like providing services, such as live driver coaching and dynamic rerouting of vehicles based on real-time shipment data and weather conditions.
 
5G connectivity could allow companies to take advantage of diagnostic data in real time, with digital dashboards and metrics that provide insights into driver behavior, route efficiency and fuel efficiency. Through the use of smart sensors and onboard computers that monitor and transmit position, speed, fuel consumption, truck wear and component failure, operational efficiency can improve across the board. Data can be captured, analysed and viewed no matter where the assets or the central office is located.
 
Another potential 5G use case is platooning, where trucks travel on a highway with vehicle-to-everything (V2X) communications and autonomous technology maintaining a fixed gap between them. Trucks could form coordinated, identically spaced convoys that can drive close together over long distances, thus reducing drag, lowering fuel consumption and cutting costs. The European Automobile Manufacturers' Association projects that platooning could reduce the CO2 emissions of vehicles by up to 10% and offer safety benefits.
 
Receiving shipping updates at only a few key checkpoints can lead to unforeseen delays that can hurt delivery times, customer satisfaction and budgets. Attaching a low-cost asset tracker to shipments, pallets or individual assets can provide precise location and temperature data. Connecting asset trackers over a cellular network provides superior security over proprietary and other IoT standards.
 
For container shipments from overseas, the assets can even be tracked at the seaport. Several ports around the world, including one in Seattle, are now employing private 5G networks that allow fully autonomous movement of cargo within the confines of the port.
 
Intelligent tagging of products and components allows logistics companies to continuously update factories on the progress of deliveries. Any gaps in supply chain visibility can readily be identified and mitigated before they cause a problem. For example, if certain parts are delayed, the 5G factory could be forewarned and may be able to automatically adapt its schedules and priorities to compensate.
 
Last-Mile Delivery
Not all logistics are on such a large scale. Local deliveries could be coordinated using 5G-enabled drones. For example, a company that graduated from the T-Mobile Accelerator program is able to deploy drones to deliver medical supplies over short distances from pharmacies to patients.
 
With e-commerce sales having risen dramatically during the pandemic, from 13% to 17% of all retail over the past year, according to McKinsey, tracking and delivering goods to end customers have become more granular. This provides yet another opportunity for 5G to step in and make the process more efficient. McKinsey is forecasting that this Supply Chain 4.0 for consumer goods will incorporate a flexible transport capability, modeled on ride-sharing technology, that can potentially increase agility in distribution and introduce new direct-to-consumer and dropshipping opportunities. Supply Chain 4.0 could become more efficient and flexible than existing systems if it is able to take advantage of the 5G-enabled Internet of Things and what it has to offer.
 
Adding up to better customer service
Using artificial intelligence and 5G to aggregate and analyse data from production, logistics and sales channels will allow increased levels of automation to be introduced across all stages of a cloud-based supply network. Predictive planning could reduce lead times by allowing finished goods to move to the next stage in the supply chain even before an order has been placed. Looking at the bigger picture, a transformed supply chain using smart product tags could also use 5G to help ensure security, quality control, customer follow-up and after-sales service – and perhaps also facilitate environmentally friendly disposal at the very end of the product's journey.
 
Regardless of industry, nationwide 5G lays the foundation for businesses to build what's next. From more efficient field operations to smarter cities, see what the 5G future could look like – and why choosing the right network provider matters.
 
(The views expressed in interviews are personal, not necessarily of the organisations represented)
 
Kusum Sharma, Head of Supply Chain, Logistics Planning & Digital Transformation portfolio, Mercedes Benz R&D India.
 
Global Supply Chain and Transformation leader with 16+ years of experience and a demonstrated history of working in high tech manufacturing and consulting industries focused on Innovation, Digital technology, product, process, sustainability, people and culture. As a business leader my role is to lead comprehensive end to end Supply chain and Industry 4.0 connected supply chain / logistics portfolio
 
I have acted as a trusted advisor to clients in the Manufacturing, warehouse and Logistics Industry for various strategic and core initiatives to establish their digital businesses. Involved in building structured business models and achieved high levels of customer satisfaction while helping customers drive their ROI from various projects. Specialties include managing complex supply chain projects in Auto components, Automotive, FMCG and other allied sectors.
 
Functional Areas: Strategic client partnerships, Account Management, Alliance Management, Strategic and tactical planning and consulting
 
Specialties: People management , Advance analytics, Customer Fulfillment , International Sourcing, Inventory Planning/Control, Forecasting and Planning, Logistics Management, Materials Management, Multi-Site Operations, Specifications Compliance, Subcontractor Negotiations, Supplier Management, Supplier Quality, Manufacturing/Operations, Strategic Sourcing, Warehousing/Inventory Management, Efficiency Projects.