On the surface, commercial logistics can seem like a straightforward concept: managing the transport of goods to customers. But, of course, in practice there are a huge number of moving parts to manage at any given moment–each of these parts is associated with a cost, both monetary and non-monetary. Because of the resources these costs represent, there are plenty of areas where the power of artificial intelligence can help reduce risk and ensure peak operation.
The benefits AI can bring are especially important in industries like consumer packaged goods (CPG) where time is always of the essence and the importance of accurate decision-making is high. Of course, in these cases, the relationship between vendor and outlet hinges on many things, but logistics is essential. A mid-2019 study of CPG retail buyers by Zipline Logistics uncovered a multitude of important relationships that can only be enhanced by top logistics services. One key insight is that fully 100% of respondent buyers mentioned that a vendor’s ability to deliver goods in a timely manner was a key factor in their willingness to work with them.
So where can AI be leveraged to enhance the CPG supply chain to make business-as-usual operations more streamlined? Let’s take a look at a few aspects.
Sophisticated data-driven tools are ideal in analyzing and interpreting massive amounts of data needed to forecast supply and demand, taking into account new buying habits, seasonal changes, and more. This information can in turn be used to accurately predict inventory needs to avoid overstocks and out-of-stocks, both of which come with a hefty price tag. AI and machine learning take these analyses to all new heights, allowing those using this data to better observe current market behaviors to extrapolate into the future. A case study on the logistics-related problems resulting from the 2017 fidget spinner boom suggests that, going forward, mining data from social media will be instrumental in detecting emerging trends before they explode, not after, thereby giving logistics companies the critical lead time they need to prepare for spikes in demand.
Logistics companies can shell out up to 50% of their overall costs on transportation, maintenance, fuel, and parts. AI-powered transportation management solutions are a proven way to drive efficiency and reduce freight costs by optimizing transportation routes (one of the main reasons half of fleets in the U.S. go over their fuel budgets) and consolidating less-than-truckload shipments, while predictive fleet maintenance systems can nip mechanical problems in the bud before they result in costly breakdowns. Add to this advanced, AI-powered weather monitoring technology that can help provide time to work around weather hang-ups, and the opportunity is even greater.
The U.S. Bureau of Labor Statistics reported 350,000 incidents of workplace injury–related leave in 2017, with warehouse workers being near the top of the list. By monitoring warehouse operations, AI systems can assign a risk score to various activities and read just the division of labour between humans and robots, and even drones, to minimize the risk of physical strain and the associated losses. AI can also help maximize compliance with health and safety protocols, such as the proper use of personal protective equipment, to ensure workers are less exposed to potentially hazardous situations.
Robotic process automation (RPA) combined with AI provides the framework for an intelligent system that boosts workforce productivity, eliminates repetitive or physically challenging tasks and all but removes human error from the equation. The result: a more responsive supply chain that gets customers what they want faster, more accurately and at a lower cost. This is no secret to warehouse managers. A 2018 survey revealed that half of warehouses and distribution centres in the U.S. said they planned on investing in automation as a way of future-proofing their operations, and the recent economic climate will have only strengthened this resolve.
The use of predictive AI technology is crucial in accelerating response times to keep pace with a constantly changing logistics landscape, especially when it involves an industry as complex and time-driven as CPG. And while the problems that AI is brought in to solve are complex, beginning to use AI in day-to-day operations doesn’t have to be. The rapid implementation possible with a self-serve AI business platform means better forecasting, lower transportation costs, better warehouse productivity, increased worker safety, and better and more cost-effective decisions, can start today.