Artificial intelligence transforming logistics says DHL

DHL has said in a new report that worldwide supply chains are beginning to undergo a fundamental transformation as more “artificial intelligence” is deployed.
The global logistics provider’s 2016 Logistics Trend Radar highlights the impact of data-driven and autonomous supply chains which it says will provide an opportunity for “previously unimaginable levels of optimization”.
The global logistics provider’s 2016 Logistics Trend Radar highlights the impact of data-driven and autonomous supply chains which it says will provide an opportunity for “previously unimaginable levels of optimization”.

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DHL has said in a new report that worldwide supply chains are beginning to undergo a fundamental transformation as more “artificial intelligence” is deployed to handle both the domestic and international movement of goods.

The global logistics provider’s 2016 Logistics Trend Radar highlights the impact of data-driven and autonomous supply chains which it says will provide an opportunity for “previously unimaginable levels of optimization” in manufacturing, logistics, warehousing and last mile delivery.

The report further states such developments could become a reality in less than half a decade, despite high set-up costs deterring early adoption within the logistics industry.

Matthias Heutger, senior vice president for strategy, marketing & innovation at DHL, said in a statement that 15 of the 26 “key trends” identified in the company’s annual trend radar report “are likely to make an impact in under five years”.

According to the report these trends include machine-human interaction and collaboration, which essentially covers the use of augmented reality (AR) accessed via “smart glasses” for order picking in logistics (also known as “vision picking”). A pilot program using vision picking by DHL showed a 25% efficiency increase as well as strong positive feedback from the users.

Robotics and automation is another area that DHL believes will see further adoption within the next five years, particularly “collaborative robots” that work side-by-side with human employees, supporting repetitive and physically demanding tasks in logistics. DHL also said it has made inroads in logistics, with autonomous forklifts and other self-piloted equipment now “reaching a level of maturity” in warehouse operations.

The next step for self-driving vehicles in logistics will be to overcome regulatory and security challenges to deploy autonomous vehicles on public roads, according to the report.

While unmanned aerial drone will require more than five years for widespread adoption, DHL believes that some products may no longer be manufactured in large mass-production facilities and shipped around the globe.

Instead, product designs will be digitized and transmitted to small factories closer to the customers, allowing for what DHL dubs “hyper-customization” of products and “batch size one” manufacturing – all requiring new logistics service concepts.

While the “Internet of Things” or “IoT” will also play a large role in more “intelligent supply chains” as well – a trend DHL noted in its trend report last year – security concerns regarding hacking, among other issues, is slowing down its adoption.

IoT offers the potential to connect virtually anything to the Internet and accelerate data-driven logistics, DHL stressed; estimating that by 2020, more than 50 billion objects will be connected to the Internet, presenting an “immense” $1.9 trillion opportunity in logistics, by its reckoning.\

“Only a few logistics [IoT] applications with substantial business impact have materialized so far,” DHL noted in its report. “This is largely due to a shortage of standards in the industry, security concerns, and the fact that recent IoT innovations have mainly been developed for the consumer market. Therefore, logistics will have to wait until similar ruggedized versions that meet business requirements come to market.”

The company added that high-profile data breaches and hacking of data systems as well as even physical objects – such as cameras and self-driving cars – are a reminder of growing security vulnerabilities in the “digitalised” world.

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