Artificial Intelligence in the Logistics Sector: Ken Research


Introduction: The logistics sector is a highly volatile and cost heavy sector involving a large number of fixed costs involved by companies looking to control end to end function and value production of the supply chain and is high in variable cost for companies looking to use contracted services for their supply chain operations. The direct delivery and last mile delivery component of any supply chain is the most tasking in terms of costing resources and the overall costs are high for specialized warehousing, air based freight and for land based freight based on Logistics Business Review. The other categories of cost though lower than the above indicated factors still end up being a major contributor to the expenses of a business and could lead to major loss if the operational resource requirement is not accurately analyzed. The need for accurate prediction has led to the explosive popularity of data analytics in the field of logistics and supply chain based operations. The application of analytics is also for prediction of need for warehouse space, transportation services, fleet requirement, order prediction and customer satisfaction which helps gauge brand value. All of the above pieces of information can be calculated accurately in a time and cost effective manner using Artificial Intelligence.

AI: Artificial Intelligence or AI is simply the application of computers to scenarios which would require human intelligence. The increasing demand for artificial intelligence has been due to reduced transistor prices reducing the cost of computational power and the advent of new chips such as Google’s TPU (Tensor Processing Unit). These specialized pieces of hardware are capable of the computational power needed for AI based systems to utilize computers for the tasks which are tedious and difficult to achieve through human labor. Another big factor requiring machine thinking capability rather than a human‘s is due to the recent explosive adoption of big data technology. Big data allows machines to reveal insights which may not have been visible before by analyzing large blocks of data and using predictive analytics, assisting companies make a decision on the implementation of their resources as well as the estimation of the level of profitability from operations.

AI and Supply Chain: The integration of Artificial intelligence into the supply chain can have a variety of benefits for different aspects of the logistics process. There are roughly 26 sub processes in logistics which can be impacted through the integration of Artificial Intelligence. AI can help with Omni Channel delivery, Package quality tracking, Process efficiency management, Cloud based logistics, IoT integration and functionality, Autonomous vehicles, Energy efficient logistics and more. The integration of AI in logistics allows for a long term reduction in cost post implementation of the system, paves the path for the introduction of automation and also allows for the minimization of operational error by removing human error. Adapting automation practices will lead to major increase in operational productivity in the short run and in the long run will lead to optimization of human resources as well, as the only jobs that will be handled by humans are the tasks where either the machine cannot handle the task at hand or in the scenario where employing a machine to tackle the task would be less profitable than to employ a human. The optimization of the human resource element and the ideal adoption of machines would lead to efficient space usage and effective reduction in payroll and human resources which is considered one of the major expenses of running an organization. The integration of artificial intelligence with IoT allows for effective real time collection of data, the application of analytics allows for real time analysis of data, integration of machine learning would allow the AI to learn to work on its own and to further develop the effectiveness and efficiency of the process. The potential game changing level of benefit seen in implementation of AI has led to companies like IBM and DHL working together to establish prominent presence of AI in the logistics business. Although the technology is yet to be fully industrialized, Artificial intelligence combined with automation is expected to be way of operation of the logistics companies of the future

Key Factors Considered in the Report:

Logistics and Shipping Market Research Reports

Logistics and Shipping Industry Analysis

Market Research Reports for Logistics

Logistic Market Research Report

Logistics and Transportation Market Research Reports Consulting

Logistics Business Review

Logistics and Shipping Industry Research and Market Reports

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Ankur Gupta, Head Marketing & Communications