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28 June 2021

How will artificial intelligence affect distribution and logistics?

There is a lot of talk about artificial intelligence (AI) and how will this new technological tool impact distribution and logistics. The truth is that AI implementation is still undergoing an incipient phase and the sector must still adapt itself technologically. However, we already know some of the things that AI will offer.

AI will enable us to handle data in such an amount, diversity and speed as we’ve never seen before. In fact, we are now able to predict consumption trends and have a wealth of data on consumer buying habits and the supply chain. The key is to manage and treat them intelligently to obtain results never seen before.

Amazon designed in 2012 a system that anticipated the consumers’ needs to significantly shorten delivery time. The system, called anticipatory shipping, allows to predict sales over the Internet by analyzing the available history of customer purchases. Thus, with a certain margin of error, it is able to predict what will be bought by geographical area and even the buying cadence.

In an increasingly less distant future, the system would not only make it possible to know what consumers are going to buy before they do. It will also anticipate and optimize logistics processes such as inventory control, warehouse automation and the resources of each area. Thus, it would be possible to know when a new batch of raw material must be repalced, in addition to being able to send the order to the best qualified supplier at that specific moment, taking into account, for example, its geographical location, and the weather and traffic conditions that the transport vehicle is going to find on the way since it will be possible to know the exact moment when it is going to leave, which route is going to take and in what transport vehicle.

In the warehouse, the system will be able to decide which are the best locations for each reference and the routes that must be carried out internally, obtain the result, learn and make different decisions to, for example, maximize the service level in times of sick leave or vacations with anticipation. If a warehouse has self-guided vehicles (AGV) and radio-frequency identification devices, the system will be able to make decisions (different each time) regarding their maintenance, internal routes, relocations, number of AGVs needed in operation, ordering, decisions about picking systems (by waves or order by request).

Thanks to AI, big data, the internet of things (IoT) and processes in the cloud, we will have total traceability on land, sea and air of any merchandise, and we can even know their status, if the package has been opened or tampered with or damaged, or if the temperature and humidity conditions have changed at any time. For those elements that must be incorporated into others, we will be able to know if the product is installed, where, if it has been worn out, if it will need to be checked shortly, if it has been damaged or broken, and so on. Based on all these data, the system will provide different solutions, for example to notify of the need for spare parts in each geographical area. The damaged product itself can be connected to other objects or systems such as an automated warehouse and request its own replacement at the end of its life cycle and before it ends up breaking.


How will artificial intelligence affect distribution and logistics?
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