2021 Trend: Growth in AI
When you watch movies about Artificial Intelligence (AI), you likely see a lot of robots and not a lot of humans. It’s a little cold, but efficient. While we foresee AI use increasing in the logistics, supply chain, and transportation industries, we don’t see a room full of machines.
AI in our industry is used in one of two ways—to augment human capabilities to reduce errors and increase efficiency, and to automate key processes. Humans will always be a necessary part of our process, but we still believe that AI is becoming more prevalent and valuable in the industry. In our recent blog about what we expect in logistics for 2021, we agreed with other industry experts that AI is going to play an even bigger role.
In October 2020, research said that about 12 percent of supply chain management agencies were using AI technology and another 60 percent said they planned to start using it. An industry study also said that the market would grow to $1.3 billion by 2024. That’s just in supply chain management.
In the same article above, the role of AI in logistics is further discussed.
“Logistics leaders often lack the tools they need to accurately and rapidly identify, assess, and mitigate risks, much of which is due to the fact that they do not have access to all of the data they need to do so,” it reads.
Further on, “The key to fully optimizing artificial intelligence in the supply chain is to use it to forecast and make predictions. Predictive analytics is an important aspect of this advanced and intelligent technology, giving leaders a way to go a step beyond the identification and assessment of risks to predict what could happen based on reliable data.”
We agree with this assessment and believe that knowing what kind of AI to adopt is key to success. Most agencies, including ours, are likely to use existing or upcoming software. Others will hire technology engineers to create proprietary internal software. Either way, the software must work well with your customers’ systems so that everyone is on the same proverbial page. It does not help at all if you are using one type of technology and other people in your supply chain are using something completely different as the systems won’t “talk” to each other. We see this first-hand with our tracking software that helps us track shipments and communicate with both our customer and their consignees.
COVID-19 made virtual communication even more vital and we expect that acceleration to continue.
We expect that using AI for large warehouse robotics, predictive capabilities, and forecasting, and better customization through big data are the three biggest ways most of the industry will use AI. Larger industry leaders such as Walmart and Amazon are likely to look more into autonomous vehicles while smaller leaders such as On Time Logistics will use technology to further enhance our fleet management.
What changes do you see coming in the world of AI and logistics?