Logistics is certainly one the most crucial processes for production and services companies. Even though it is still perceived as a traditional set of activities, Logistics is rapidly evolving and is set to be a key area for digital transformation and automation. For some of the players in this area, innovation in the logistics department has determined a transformation of the entire company, making this process the strength of their business.
Examples abound, but probably one of the most well known is Amazon’s: indeed the tech giant has built an entirely new business model around sorting efficiency and speed of delivery, creating the “Amazon Prime” set of premium services, which currently have more than 100 million subscribers worldwide.
The two most debated topics in the logistics industry today are automation and the role of man.
McKinsey has predicted that around 57% of existing warehousing and logistics functions will be automated and handled by a variety of different robots and machines. Some trends already in place, including autonomous driving, advanced robotics and the advancements of AI, will dramatically change the logistics industry in the next 20 years.
We are not yet to the point where complete automation of warehouses is easily doable and convenient. Automation has a high cost and we are likely going to see these drastic changes within a few years rather than all of a sudden, also considering that managing a fully automated warehouse requires new skills from warehouse managers and staff that take some time to be developed.
Despite the fast evolution and automation of the logistics 4.0 supply chain, data tell us that the job market in this industry is exhibiting a growth in demand of workers and managers, so we don’t see a short term substitution effect of machines over humans, rather we see a collaboration between human and artificial intelligence.
What do we mean by Logistics 4.0?
Just like Industry 4.0 is the evolution of how industrial facilities work, similarly Logistics 4.0 or Supply Chain Management 4.0, is the next step towards the smart warehouse and its connected processes. Logistics 4.0 will help warehouse managers make their facilities more efficient by reducing and anticipating possible mistakes, and by using the large amount of data at their advantage. The workers in turn will cooperate with machines being one of the many elements of the interconnected network.
In terms of definition, Logistics 4.0 is the process of making the current logistics industry more technologically advanced by transforming and digitalizing parts of the process using an advanced network of data, efficient robots, AI algorithms and computer vision techniques like Augmented Reality.
According to BIS Research, in 2017 the Enterprise Augmented Reality market was worth 3.5 billion dollars, while it will reach almost 200 billion dollars by 2025.
The sales of smartglasses in 2017, according to ABI Research, reached the value 52.9 million dollars and about one out of four smartglasses was bought by the logistics industry.
Inglobe Technologies contribution to the Logistics 4.0 debate
Inglobe Technologies is a recognized player in the transformation and digitalization of industrial processes. The company is working with key industrial players to deliver innovative and effective solutions based on Inglobe’s Industry 4.0 AR Platform, HyperIndustry.
Together with Metra, a fast growing italian group in Logistics – serving relevant clients in several verticals including Pharma, Fashion, Food & Beverage and Furniture -, Inglobe have started to explore how Augmented Reality and IoT Platforms, integrated with a typical WMS workflow, could impact key processes like Picking, Sorting and Cargo Loading, helping workers to perform their tasks more efficiently.
The concept video below illustrates some of the use cases being explored.
Logistics 4.0 Use Cases
Here are some of the most common use cases in which innovations in the logistics industry make sense:
Augmented Reality Picking
AR can support picking operations by helping the operators identify the picking points, suggesting the most efficient route and providing a digital checklist of work orders. AR can be helpful both for picking by hand and picking by forklift.
Augmented Reality Sorting
Sorting the items on a pallet exhibits a number of critical issues, such as positioning the items according to their weight and degree of fragility, in order to avoid breaking or damaging them. AR can suggest the operators the best possible sorting order, help avoid damages and optimize the pallet size.
Augmented Reality Cargo Loading
Loading a truck with items of different size, shape and weight can generate inefficiencies such as damaging the goods and not optimizing the truck capacity. AR can help the operators load the good in the best possible sequence in order to optimize the truck capacity, reduce the risk of damage and reduce the execution times.
Augmented Reality, and Computer Vision in general, can be helpful in the identification of risks and damages inside a warehouse thanks to the date coming from sensors and cameras placed in the environment. Moreover Safety Management solutions can be used in order to train workers about the risks in the working environment and get them to learn safety procedures faster and better.
Aside from the core logistics processes such as picking and sorting, there are large benefits to be expected in terms of energy savings of a warehouse by leveraging IoT by making smarter the functioning of lights, heating and installations in general. Useful technologies for this use case are beacons, wifi networks and indoor positioning services.
Warehouse Remote Assistance
By providing mobile or wearable devices to the operators inside a Warehouse together with a Remote Assistance solution, can allow them to get help from a Remote Expert and obtain the real time instructions on how to fix certain problems on equipment or forklifts. AR can help minimize the involvement of specialized maintainers and reduce the stops in the process.
The aforementioned use cases can be implemented with a variety of devices and systems, including smartphones and smartglasses. It is here, however, that the use of smartglasses could make life easier and processes more efficient, as the need for hands free operations and wearable computing can be a strong constraint.
Expected Benefits of Augmented Reality Logistics for the Warehouse Managers
Many players have already started to include Augmented Reality in their Logistics 4.0 innovation strategies. Among the players which have carried pilot project involving the use of Augmented Reality in the logistics processes there are DHL and General Electric. At the end of these projects DHL stated they experienced an average increase in productivity of 15%, while GE stated the were able to reach performance improvements up to 46%.
Investment in new technologies and in process reengineering is motivated by the expected benefits. Regarding managing complex warehouses, we tried to list some of the advantages that could be achieved by transitioning to a Logistics 4.0 approach:
- Increase in the bulk of goods handled (increased revenues in turn)
- Reduction of good returned and reduction of human errors
- More effective training. Reduction in cost and learning time
- Reduction of accidents and injuries in the warehouse
- Energy savings
It is evident from what has been said above that the changes promised by the aforementioned technologies could be disruptive in the Logistics sector, thus forcing players across the whole value chain redesign their business models. Indeed, investing in this kind of innovation today could demarcate the line between the players that will embrace the Logistics 4.0 revolution and those who will not, striving to keep their market share.
Taking advantage of these changes will be harder for small players in the value chain of Logistics as their business model strongly relies exactly on the processes that will be most impacted by the coming changes. Biggest players, on the other hand, are in the condition to best explore different alternatives and evaluate their decisions thus finally investing in those innovations that would bring additional value to their business.
This does not definitely means that small player will be thrown out of the game. Some of them will be forced to change their processes and business model. Others will embrace and further develop specific innovations in the area thus setting themselves as market leaders of the future.