Artificial Intelligence in Logistics: With their new report on artificial intelligence, DHL and IBM demonstrate how the industry can leverage the opportunities and benefits of the future technology. The digital revolution is redefining our modern life – and Artificial Intelligence (AI), which is already more widespread than many may realize, plays a key role in it. Technological advances in big data, algorithm development, connectivity, Cloud computing, and faster data processing are opening AI to more and more industries and areas of life. The logistics industry is also undergoing major changes: AI is bringing forth a new generation of intelligent logistics systems as well as operational innovations. This is stated by DHL and IBM in the current “Artificial Intelligence in Logistics” report. Today, AI systems are more powerful, more accessible, and less expensive than ever. In their paper, DHL and IBM show how supply chain experts can take advantage of the benefits and opportunities of artificial intelligence. “As the technological progress in the field of AI is proceeding at great pace, we see it as our duty to explore, together with our customers and employees, how AI will shape the logistics industry’s future,” says Matthias Heutger, Senior Vice President and Business Development Global Head of Innovation at DHL. And Keith Dierkx, IBM's Global Industry Leader for Freight, Logistics, and Rail, explains, “By leveraging AI into core processes, companies can invest more in strategic growth imperatives to modernize or eliminate legacy application systems. This can make existing assets and infrastructure more efficient, while providing the workforce with time to enhance their skills and capabilities.”
In logistics, AI enables, among other things:
- New value creation models through increased use of artificial intelligence in combination with physical and digital logistics networks
- Support through self-learning systems that use big data to generate new insights and cut down on routine tasks
- Back office automation, forecasting, and intelligent logistics
Back Office AI
Complexity and competition continue to increase and companies with global supply chains are under pressure: As service demands increase, prices remain the same or even decline. At the same time, companies are burdened internally with time-consuming, repetitive tasks in accounting, HR, IT, and legal departments. AI offers the opportunity to save time and money while increasing precision and productivity.
The business world is uncertain and volatile – AI can help the logistics industry fundamentally change their business: from reactive actions based on predictions to proactive operations with predictive intelligence. This applies to global forecasts at the network level as well as process-specific possibilities of prediction.
Seeing, speaking, thinking in AI logistics
Even given the physical requirements, artificial intelligence can be of great benefit to the industry. The usage of AI-capable robotics, autonomous vehicles, or machine vision and object recognition greatly expand the possibilities of modern logistics.
AI-based customer experience
The dynamics between logistics providers and customers is changing. For most consumers, contact with logistics companies begins at the online merchant’s checkout process and ends with the successful delivery of the product – or the return shipment. For companies, contacts with the logistics providers are characterized by long-term contracts, service agreements, and the operation of complex, global supply chains. AI can help to personalize customer contacts, increasing customer retention and loyalty.
Getting started with AI
AI is applicable across the supply chain, enabling a whole new level of operational efficiency, time and cost savings, and increased customer retention. However, it is not easy to transform existing logistical operation models into proactive, personalized, autonomous, and proactive processes. This transformation will take years and requires effective leadership, a good understanding of the industry's value drivers, AI skills and talent in the business, and a culture that supports the ongoing evolution of an AI-driven business.
Proactive instead of reactive
With the help of artificial intelligence, the logistics industry will renew its operating model: moving away from reactive behavior, towards a proactive and forward-looking approach. This will have a positive impact on various activities and sectors, such as the back office, operations, and customer contact activities. For example, AI technologies leverage state-of-the-art image recognition to track the status of shipments and equipment to enable fully autonomous transportation or predict fluctuations in global shipments in advance. Artificial intelligence extends human skills and reduces repetitive tasks. This shifts the focus of logistics employees to more demanding tasks.