HOW INTELLIGENT LOGISTICS CAN IMPROVE SUPPLY CHAIN MANAGEMENT

Digitisation is transforming supply chain management, bringing a new level of intelligence and insight to the logistics sector. Once a manual and labour-intensive industry, technology is now being used for everything from increasing warehouse efficiency to managing inventory levels and shortening delivery times. 

The role of warehouse automation in supply chain management

The use of warehouse automation is growing by more than 10 per cent per year¹. With its potential to increase speed, reliability and productivity, it offers companies a significant competitive advantage in their supply chain management. But, with so many options available, where should companies invest?

Physical automation uses technology to optimise processes such as the handling and movement of goods. This can be as simple as using carousels and conveyors to move large quantities of product or incorporating fully robotic solutions to automate repetitive tasks such as picking and packing. This technology is not only increasing warehouse efficiency by minimising human errors but can free people up to focus on higher value activities.

Even before goods arrive at a facility, warehouse automation is being used to make better use of space – optimising layouts and planning efficient picking routes. Automated storage and retrieval systems (AS/RS) use data to map storage locations, placing items according to the type and frequency of access required. By using robots, they can also make use of previously inaccessible warehouse space, using methods such as vertical stacking to improve storage capacity.

As technology becomes more scalable, it’s becoming accessible to a broader range of customers. Rosalind Shinkle, CEO and Co-founder of Adagy Robotics, highlights how this shift presents an opportunity for smaller logistics companies to accelerate their growth plans and take advantage of robotics in new ways.

¹ McKinsey & Company - Getting warehouse automation right

AI and supply chain management

² Harvard Business Review - How Machine Learning Will Transform Supply Chain Management

Route optimisation

Technology is significantly improving route optimisation in supply chain management, which traditionally relied on manual planning and often led to inefficiency and increased costs. While Global Positioning Systems (GPS) can track movements in real time and respond to changes and potential disruptions, AI is being used to generate the most efficient delivery routes – analysing traffic patterns, road conditions and fuel consumption to minimise travel time and reduce emissions. 

What are the challenges?

Technology such as AI, machine learning and warehouse robotics may be revolutionising supply chain management, however, its adoption does not come without challenges. These include:

• Cost - New systems can be expensive to purchase and maintain, however as technology becomes more accessible, costs are reducing. AI is also driving the development of multi-purpose robots that can adapt to different tasks, providing a better return on investment³.
• Integration - Many logistics businesses already have longstanding supply chain management systems and processes in place, so integrating new solutions can be complex and requires extensive planning and coordination.
• Talent and skills - There is a shortage of skilled staff in areas such as warehouse robotics and machine learning, and specialist training is required to upskill existing employees to successfully implement and maintain new solutions. 

3 McKinsey Digital - Technology Trends Outlook 2024 

For more insight into the future of supply chains, watch our latest Thought Starters series and explore how new technology is enabling businesses to streamline operations, improve supply chain efficiency and reduce costs.

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