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Automated warehousing, IT-enabled logistics and digitally transformed supply chains hold the key to a manufacturing economy push

The need for Industry 4.0 solutions to power a renaissance in manufacturing worldwide and particularly in India is well understood by all policy planners and industry CEOs in the manufacturing sector. Ubiquitous connectivity, devices connected by the billions to the Internet and new Internet of Things (IoT) applications are all providing the cyber push to make the cyberphysical future of the manufacturing world a reality. However, smart factories and heavily automated shop floors cannot by themselves provide the push to the manufacturing economy that is so necessary for a sustained economic boom to happen in the country. Automated warehousing, IT-enabled logistics and digitally transformed supply chains hold the real key to this future.

Speaking at the Supply Chain and Logistics conference in Dubai, which is fast emerging as a global hub for transportation in our part of the world, it was interesting to find that while extensive automation has been implemented in the storage and movement of materials, the opportunities in cognitive logistics and supply chain planning is still at a nascent stage all over Asia and even in the advanced systems prevalent in the US and Europe. This may be because warehouse automation and the use of augmented reality-enabled picking systems and virtual reality-driven learning systems have become part of any state-of-the-art storage and retrieval systems, but rapid advantages in artificial intelligence, machine learning and cognitive technologies have yet to be fully utilized in reimagining and redesigning the supply chains of the future.

One of the main reasons for the lag in the adoption of cognitive transformation in supply chains and logistics has been attributed by expert Christine Taylor to the large numbers of people and firms that have to work together to make a supply chain work. The different levels of sophistication of manufacturers, brokers, transporters, retailers and customers make it difficult to have a wide sweep implementation in a supply chain the way it can and does happen in a factory or warehouse.

What has changed today to inject a new wave of optimism that cognitive logistics and supply chains are indeed going to happen in the very near future? Businesses are getting comfortable with setting up and using large data lakes and warehouses and deploying predictive and prescriptive analytics solutions. Omni-channel has become the standard for most manufacturers and retailers and with multiple companies, intermediaries and consumers interacting on an intelligent supply chain platform, the opportunity to understand the behavior of every participant on the platform and learn with every transaction is enabling supply chain planners to cost-effectively plan and optimize delivery solutions for each category of customer on the platform. Digitally-enabled supply chains enable instant interchange of data amongst all partners and enable the learning from every transaction to be leveraged by all participants.

Companies like DHL, Walmart and Amazon are already practicing anticipatory logistics where demand is being forecast and sometimes even created by intelligent suggestions to customers. They are responding to customer impatience with long delivery lead times and manufacturer eagerness to produce in intelligent anticipation of demand. Artificial intelligence (AI) has a key role to play in this anticipation process with the entire sequence of demand forecasting, manufacturing, transportation and storage planning and maintenance of transportation equipment riding on the ability to use AI well and deploy machine learning to provide adaptive knowledge through the supply chain. Self-learning logistics processes are enabled by algorithms that recognize patterns and initiate action across the logistics chain. These actions could include volume and timing of shipments, inventory and stocking suggestions and pricing to optimize product offtake and movement across the supply chain.

The ultimate solution to the ongoing demand for faster movement of people and goods worldwide is of course the “hyperloop”. But till such time that hyperloop movements become the standard, cognitive supply chains that treat a customer as a single entity across multiple channels, learn when transport or inventory disruptions could occur and ensure visibility and transparency from supplier to buyer will keep getting more sophisticated. Biased decisions will be avoided by machine management of most routine tasks, with intelligent handovers to experienced humans only when there are extreme and unforeseen circumstances including weather, unions and other “force majeure” situations.

At the recent launch by 5F World and California-based AI and analytics firm Systech Inc. of the Center for Artificial Intelligence and Advanced Analytics, one major question that came up in the corporate discussion was naturally the potential loss of jobs in traditional manpower-intensive services sectors including logistics. The reality is that as systems get more complex and provide rewarding outcomes for all participants, the opportunities for bright human intervention in the design and implementation process will always exist and indeed grow! Nowhere will this be more evident than in the area of cognitive logistics. More and more variables will have to be analyzed to make decision making more accurate and as monetary savings accrue to all participants through better planning of manufacturing, stocking and distribution and customer delight peaks, the demand for customer experience designers, customer behavior analysts and new service imagination and design experts will soar. Are our traditional education systems ready to take existing employees and career seekers into this new world? Probably not, but new interventions in the skilling process are happening to make this a reality. The cognitive world will be a truly remarkable place and cognitive supply chains and logistics systems will be no less!

Photo credits : iStock.