The Role of Artificial Intelligence in Logistics

November 16, 2021 by Alexey Kutsenko

AI (Artificial Intelligence) impacts a lot of industries and fields,  but recent developments are poised to have a profound influence on industrial supply chain and logistics. The potential value of the technology used in the field is huge. Many large tech enterprises like Google and Amazon have already heavily invested in this technology and are leading the field, and companies should . If you don’t know how to use AI in your company, then this article is what you need to read for sure.

6 Key Uses of Artificial Intelligence in Logistics

The primary purposes of AI solutions implemented in logistics are:

  • Automate routine and time-consuming actions;
  • Improve management
  • Reduce costs
  • Save money

Below, we outlined 6 key AI use cases in logistics so that you can see the potential benefits that can be obtained by implementing AI technology in industrial logistics:

1. Automated Warehouses

It’s forecasted that the warehouse automation market will grow at an annual rate of 14% by 2026. Besides that, it’s predicted that more than 60% of companies will use AI to automate warehouses by this date. Automated warehouses enable companies to facilitate a lot of routine and time-consuming tasks.

In its turn, AI in warehouses will automate changes and streamline many warehousing operations including data collection, analyzing the gathered information, inventory processes, and more. Besides the fact that the speed of automated actions are usually several times faster than manual ones, it also allows for the removal of routine logistical tasks that slow the process. Currently, AI is used in the industry to:

  • Make demand predictions
  • Modify orders
  • Reroute products in transit

Some of the benefits of the automated warehouse are:

  • Full transparency of operations and accountability of every step performed are ensured due to all actions in the warehouse being easily tracked
  • Decreased rate of mistakes and wrongly arranged products
  • Optimized inventory — the products and items are placed according to their popularity
  • Streamlined processes
  • More accessible and safer working environment

All these benefits contribute increased revenue, cutting transportation costs, and improving overall efficiency. That allows you to improve the service and save money. In the future, automated warehouses are expected to help perform quality control and eliminate the need for human supervision.

2. Autonomous Vehicles

AI will soon be able to automate transport vehicles (trucks, vans, buses, etc.). Today such vehicles are not fully automated, and. Driverless cars are not fantastic sci-fi imaging anymore While the presence of a human is still required to control the situation and analyze the risks, but will likely become a reality in the near future. Autonomous vehicles benefit logistical processes in the following ways:

  • Saved time
  • Reduced costs
  • Decreased accident rates

3. Smart Roads

Another AI use case in the logistics industry is smart roads. Smart highway and smart road are terms for a number of different ways technologies are incorporated into roads, for improving the operation of connected and autonomous vehicles, for traffic lights and street lighting, and for monitoring the condition of the road, traffic levels and the speed of vehicles. Several companies are already working on building them. The benefits of smart roads for logistics are:

  • Improved road safety
  • Reduced delays
  • Faster deliveries

These outcomes are ensured because smart roads are equipped with:

  • Solar panels that assist in producing electricity and prevent roads from being slippery in winter.
  • LED lights that alert drivers about the changing road conditions.
  • Fiber optic sensors that can sense traffic volumes/patterns, inform if the vehicles leave the road or are involved in accidents, and in such cases alert the appropriate authorities and emergency services.

4. Route Planning

One of the most significant tasks in industrial logistics is effective route planning. Using the power of AI, companies can unlock advanced route planning with predictive analytics to optimize such values as lower costs and much faster delivery time. Traditional routing is limited and can't account for all real-world factors while AI-based solutions used can. AI tools take into account as many factors as possible, including:

  • Customer preferences
  • Traffic patterns
  • Type of goods/supplies that is to be delivered
  • Local road regulations
  • Routing behaviors, etc.

AI implementation results in lower delivery costs, reduced shipping costs, faster delivery times, better asset utilization, reduced time spent on each delivery/route, and much more.

5. Demand Forecasting

The ability to accurately predict future needs regarding the number of goods and supplies is crucial for running a successful logistics company. Running short of inventory often leads to lost sales, lost revenue, and lost customers.

This is where AI technologies are more than helpful. AI algorithms can predict trends and outcomes better than human experts. Currently, not only AI can track and measure all inputs and variables, but do so quickly and precisely. This means simplified warehouse management and reduced inventory.

AI helps enterprises effectively plan supply orders based on historical data. What’s more, the technology can enhance customer experience through personalization by suggesting products tailored specifically to their buying preferences/habits.

In such a way, the business can get the following advantages:

  • Reduced costs spent on storing the items
  • Exceptional performance
  • Increased revenue
  • Better customer retention
  • Reduced number of stockouts

6. Back-Office Process Automation

Back-office operations are highly important for logistical needs. The accuracy and speed of back-office operations can be dramatically improved by using AI. Cognitive automation was created by a combination of Robotic Process Automation (RPA) and AI that enables employees to improve their performance and quality of work.

AI also allows enterprises to:

  • Automate repetitive data-related tasks that are often a source of errors;
  • Streamline the entire decision-making process;
  • Significantly improve all processes that require any data entry;
  • Lower costs;
  • Improve the accuracy and timeliness of data for logistics companies;
  • Eliminate getting wrong or conflicting data;
  • Automate report generation;
  • Coordinate each action.

By automating routine back-office tasks with AI, companies can increase overall efficiency, keep track of data reporting, organize customers’ data more accurately, prepare financial information, and many more.

Final Thoughts

If you want to stay competitive, then embracing new technologies such as artificial intelligence is one of the best strategies to choose. When it comes to logistics, AI helps:

  • Automate various time-consuming processes;
  • Increase accuracy;
  • Help in demand forecasting;
  • Optimize routes while making transportation safer and faster;
  • Make informed decisions;
  • Rescue the probability of human errors, and many more.

Thus, artificial intelligence plays a pivotal role in reducing costs, saving time, increasing productivity and efficiency. Through AI, companies in the industry can leverage data platforms, create datasets to regulate certain patterns/anomalies, and increase customer satisfaction.

 

Author bio: Alexey Kutsenko is CMO at DDI Development, which provides custom web & development services to clients worldwide. Alexey has vast experience in building marketing strategies for various clients, defining the client’s needs, and leading digital marketing strategies in the company.

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