With AI driving innovation across various aspects of logistics, we can expect continued advancements and improvements that will reshape the industry for years to come
Artificial Intelligence (AI) is an incredible means of teaching computers and machines to mimic human thinking and solve problems like we do. It’s one of the most important advancements in technology. AI as a field of research was formally established in 1956 at Dartmouth College. In the decades since, it has been integrated into numerous industries, from defence to social media, supply chain management, real-time tracking systems, and many others.
We can decode AI as a combination of robotic process automation, computer vision, and machine learning. AI’s ability to transform and reshape various domains is continuously evolving and each day there are new advancements in the AI ecosystem. From a logistics industry perspective, there is a strong focus on optimising routes, implementing multi-stop route planning, efficiently managing fleets, and ensuring smooth last-mile tracking.
According to research conducted by McKinsey, almost half, i.e. 47% of companies have incorporated AI into at least one of their operations. Artificial Intelligence is revolutionizing how managers perform their tasks. In the logistics space, AI machines support Chief Supply Chain Officers (CSCOs) by presenting them with visual representations of their supply chains in real-time, helping them pinpoint areas of improvement.
In logistics management and transportation automation, a key use case for AI is predictive analysis. This involves using programming tools to determine the most optimal actions. AI systems analyse large amounts of data to offer valuable insights that streamline operations, enhance efficiency, and support businesses in making well-informed decisions for growth.
Let us dive a little deeper into three ways AI is helping build more efficient delivery management systems.
1. Route Optimisation
One of the significant advancements that AI has brought to logistics is in terms of route optimisation. AI-powered logistics platforms are widely adopted in sectors like courier services, e-commerce, retail, transportation, and quick-service restaurants. They play a crucial role in managing deliveries and optimising routes. These platforms utilise advanced routing algorithms to efficiently plan the best routes for drivers, effectively solving complex logistics challenges.
AI technology assists logistics managers in planning and adjusting delivery routes. The main goal is to optimise operations, automate processes, reduce delivery costs, and improve the overall customer experience.
2. Auto Order Allocation
Logistics automation includes a crucial process called order allocation which involves distributing goods based on route planning. In simple terms, order allocation means organising orders from different sources in the most efficient manner possible.
The introduction of AI has revolutionised order allocation. This remarkable shift towards automation has witnessed 90% of orders being allocated automatically, significantly reducing the need for manual intervention.
Inventory management has also benefited immensely from AI. Previously, tasks like inspection, selection, and inventory facilitation were prone to human errors, causing about 20% inaccuracies. However, the integration of AI machines and scanners has significantly improved these processes, ensuring timely deliveries and more accurate operations.
3. ETA Calculation
Calculating the estimated time of arrival (ETA) is crucial for effective delivery management.
To determine ETA, various tools, including predictive analysis, are used in the logistics industry. Generating and analysing data plays a key role in this process.
The ETA calculation relies on planning the delivery route. If there are any changes, such as a customer requesting a different delivery time or traffic conditions, reliable logistics software automatically adjusts the ETA and informs the customer. It also provides rerouting solutions for drivers, ensuring that they navigate efficiently in response to these changes.
The Way Forward
VP – APAC, MEA,
LogiNext
The transformative power of AI in the logistics industry is evident as companies revolutionise the way they plan, design, and implement their operations. As they strive to stay ahead in a rapidly evolving market, businesses are actively incorporating emerging technologies into their day-to-day operations.
Beyond these three key areas, companies are also exploring the potential of AI in sectors like Retail/Wholesale/Fulfilment Warehouses, where manual forklifts are being replaced by AI robots and smart conveyor belts. Moreover, the integration of automatic fleets is a notable endeavour aimed at reducing driver workload and mitigating risks during the transportation of goods.
With AI driving innovation across various aspects of logistics, we can expect continued advancements and improvements that will reshape the industry for years to come.
