Posted by Patrick S. Sedlak, Principal on 02.20.18
At a recent industry meeting, keynote speaker Tony Seba noted that in 1900 it was nearly impossible to find an automobile among all the horse-drawn carriages in New York City. Just over a dozen years later, you couldn’t find a horse on 5th Avenue. Forty years ago, no one owned a personal computer. And about a decade ago, the term “smartphone” didn’t exist.
Fast forward to today, when the latest and greatest technology upgrade hits the market every year. New technologies are launched and adopted at a mind-boggling pace. Supply chain is certainly no exception. Technologies like barcodes, RFID, automatic guided vehicles (AGVs), and management software are staples in supply chain operations.
But the pace is quickening.
Robots are now a common sight in some warehouses, enabling goods-to-person methodologies and enhancing picking, loading and unloading functions, but they are rapidly evolving into other uses. Walmart is using robots in its stores to detect out-of-stock items, incorrect prices, and missing labels. Robots are now deployed in hospital corridors autonomously delivering food, drugs, and supplies.
Drones are being outfitted for cycle counting and last mile delivery. Artificial intelligence (AI) is emerging as a potential solution for picking, inventory control, and fulfillment functions in the distribution center. The race to put driverless freight trucks and delivery vehicles on highways is getting intense, and the Internet of Things (IoT) is providing greater inventory and in-transit visibility. Augmented reality is even making an impact on order fulfillment productivity and accuracy.
What should supply chain executives do?
Pay attention. While you may not be an early adopter like an Amazon or a DHL, you can’t afford to ignore trends in the industry that are streamlining operations and improving service levels.
Don’t assume your business is too small to benefit. As these and other technologies continue to advance, their prices will continue to come down, and new start-ups are coming to market every day. If an intriguing solution is too cost-prohibitive, it may be possible to partner with a third-party provider to test the tech waters.
Stay open to opportunities. Maybe AI is still too futuristic for your business, but if you experience peak season spikes, leasing a handful robots to help handle the increased volumes may be a good option. This is especially true if your distribution operation is in a market impacted by lack of available labor.
That said, keep people in the equation. Most of the technologies coming to market are not meant to replace human workers entirely, but to work alongside them to improve accuracy, efficiency and productivity. Some solutions are designed to handle the “boring” stuff – time-consuming and labor-intensive activities like moving pallets, for example, which can free up staff to handle activities more important to your bottom line, like order fulfillment.
Get an unbiased assessment. Whether it’s a bleeding edge AI or a best practice goods-to-person solution, can your business really benefit from a new technology? Commissioning an independent assessment of your operations can better inform your investment decisions.
Supply chain is certain to look substantially different a decade from now. If your business doesn’t keep pace, then who knows if you’ll still be in business?
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