5 Examples Of How AI Can Be Used Across The Supply Chain
AI is everywhere, but perhaps its greatest impact could be felt across the supply chain. From anticipating orders to managing deliveries, AI has the power to drastically increase efficiency in all areas of the supply chain. In fact, McKinsey estimates that firms could gain $1.3 trillion to $2 trillion a year from using AI in supply chain and manufacturing. Here are five companies that are already taking advantage of this forward-focused technology.
1. Rolls Royce uses AI to safely transport its cargo.
Rolls Royce recently partnered with Google to create autonomous ships. Instead of just replacing one driver in a self-driving car, this technology replaces the jobs of 20-plus ship crew members. Existing ships use AI algorithms to sense what is around them in the water and classify items according to the danger they pose to the ship. In the future, the technology will include sensors to track ship engine performance, load and unload cargo and monitor security. Using AI to help ships be aware of what is around them makes shipments faster and safer. Ships won’t be lost due to weather or run into dangerous items, which means goods can cross oceans faster and more easily.
2. UPS uses AI to create the most efficient routes for its fleet.
In supply chain deliveries, every minute and mile matters. UPS uses an AI-powered GPS tool called ORION (On-road Integrated Optimization and Navigation) to create the most efficient routes for its fleet. Customers, drivers and vehicles submit data to the machine, which then uses algorithms to create the most optimal routes. Instead of back-tracking or getting stuck in traffic, ORION helps drivers make their deliveries on time and in the most efficient manner. The routes can even be changed on the go depending on road conditions and other factors. Optimizing delivery routes has a huge impact on all areas of UPS’ business, from saving time and money to reducing emissions and wear and tear on its trucks. With ORION, UPS estimates it can reduce its delivery miles by 100 million. Those savings can add up, especially because UPS predicts that for every mile its drivers cut from their daily routes, the company saves $50 million a year.
3. Robots deliver medicine, groceries and packages with AI
Instead of using human couriers, timely items like food and medicine can now be delivered by robots. Marble, which calls itself the “last-minute logistics company,” delivers all sorts of items to people quickly and more efficiently than humans. The robots use LIDAR technology—the same that is used in autonomous cars—to navigate city sidewalks and avoid running into people and other hazards. Marble started as a way to deliver food through the Yelp24 app but has since expanded to deliver medicine, groceries, packages and more. The robots track their route and the conditions of the sidewalks as they go, so that routes are continuously improving. It’s a faster, more efficient and more affordable way to get goods of all types around busy urban areas.
4. An AI algorithm can forecast when orders will arrive and leave a warehouse
Lineage Logistics, a company that keeps food cold for grocery stores and restaurants, uses AI to predict the path of its orders. The AI algorithm can forecast when orders will arrive and leave a warehouse, which means employees can put the pallets in the right position. Items that will stay at the warehouse longer are put further in the back, and items that move more quickly and won’t stay in the warehouse as long as placed towards the front. Since implementing smart placement through AI, Lineage has increased its efficiency by 20%. For a company that moves 20 to 30 billion pounds of food a year, that’s a major impact. Instead of moving pallets around like a giant game of Tetris to get to the correct order, AI allows the company to be smarter about where items are placed from the start.
5. Combining historical delivery information with customer feedback, weather reports and logistics Infinera predicts future delivery times
After telecom manufacturer Infinera was hit with a rough year, it decided to turn things around by adding AI to its supply chain management. The company uses machine learning to analyze production times and logistics and better predict delivery dates. The AI algorithm then provides that information to sales associates and customers so they know what products are available and when they can be delivered. Instead of just looking at manufacturing and shipping schedules to guess when items will arrive, AI combines historical delivery information with customer feedback, weather reports and logistics to give an accurate prediction of when products will get to customers. The result is a more cohesive company that is able to make decisions faster and satisfied customers who know just when their products will arrive.
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