Artificial Intelligence in Logistics

How AI impacts logistics in 2018?

Artificial intelligence is leaving a mark in every facet of industry. AI is all about learning from past behaviour, trial and error and coming up with intelligent solutions. Rules-based analytics is being replaced with AI at a rapid pace. AI has been put to use in most ecommerce websites now. If you are interested in a pair of shoes, you are automatically shown an array of shoe cleaners and related products like socks and insoles. The recommendations are based on real time product availability and profitability, the consumer’s browsing history, and even what they’ve tried on in fitting rooms (now there are “smart” RFID tags embedded into garments). AI now impacts logistics too. This is one of the biggest growth areas where AI can play a significant role in the bottom line with intelligent forecasting systems.

Until recently, logistics systems were able to estimate what quantities of products were required to maintain necessary inventory using inventory levels and historical sales data. Historical sales data spanned a few years at best. But today, AI can come up with accurate data on what types of products, sizes, and colours are likely to sell and how the demands fluctuate, by analyzing multiple scenarios in real time (fashion trends, consumer behaviour, the weather etc.). AI systems leverage shipping data analytics from various sources of the internet. Predictive analysis is no more just a guesstimate anymore. Case studies all over the world show that AI in logistics can reduce surplus stock, reduce returns and reduce human intervention. There is scope for a lot of cost cutting in the form of labour reduction. Consumers get to enjoy more reliable information and customized offers. Some major retailers who have invested in AI systems are looking at closing off stock rooms and using robots to make automatic decisions about what needs to be replaced on the shelves, managing goods for deliveries and onto the shop floor.

Amazon and other major players in the industry are trying out research ventures like automatic vehicles. Driverless cars and flying drones to deliver last mile are reality today. While free and fast shipping are very important USPs in the retail world today, drones and driverless cars are the way forward. That is why giant retailers are putting their money in related research. Of course, it is not economically viable to do large scale drone deliveries today but it could be the way forward in the near future. Robots are being used on warehouse floors to handle movement of goods.

Logistics might be the last field that AI has forayed into but there is scope for a lot of work. Business costs could be reduced significantly by optimizing the way logistics works today. This is especially rewarding because logistics involves the collaboration of dozens and dozens of organizations, people and networks. There is room for a lot of human error which can be overcome with AI.



Marketer, Supply Chain Expert, Coffee addict.

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