EDITOR ' S QUESTION
SUPRIYA BACHAL
PROGRAM MANAGER – R & D AT SIEMENS
AI is revolutionising trade and logistics by boosting efficiency , slashing costs and facilitating smarter decisions . In supply chains , it enhances demand forecasting , making inventory management much more accurate . This isn ’ t just a matter of processing historical data ; AI can integrate a vast array of information – from market trends to the weather – and factor in a wide range of ‘ externalities ’ that might influence why and how a market moves . Route optimisation algorithms can , almost instantaneously , determine not just how to deliver an item along the shortest path and in the least amount of time , but also how to deliver it in the most fuel-efficient way . Where might a predictive AI next turn its attention ? Customs compliance , some suggest . That ’ s an area of activity ( and enormous paperwork ) that involves a great deal of ‘ looking the other way ’ so that shipments can move along . But an AI might prove to be a very effective customs officer , able to easily detect the early signs of something amiss in trade documents .
Warehouses are buzzing with AI and robots , automating tasks to achieve a level of efficiency and order accuracy that humans can ’ t match on their own . In some cases , automated storage and retrieval systems – giant , crane-like machines that lift boxes of inventory up to the ceiling and place them on shelves or stack them in massive vertical carousels – are integrated with up-to-the-minute electronic conveyor belts that take the boxes safely to their destinations within the warehouse . Augmented-reality mobile devices direct workers instead of paper printouts . Algorithms optimise the whole operation as a kind of three ( accurately , four ) dimensional jigsaw . Some parts of the system move inventory around in an optimal way , ensuring that robots and workers who ‘ pick ’ items for orders have the fastest and most direct access to the needed inventory .
Customer experiences are greatly improved by AI . Whether through chatbots or real-time updates or personalised delivery schedules , the involvement of intelligent machines in our supply chains , along with all the above digital enhancements , means that we as customers are having a revolutionarily better experience . And this is by no means the only , or even the most important , advantage that intelligent machines have brought to supply chain management . Furthermore , machine intelligence is also helping in the core financial and operational areas where the supply chain operates and in identifying the sorts of cost-reduction and sustainability opportunities that are just now beginning to surface in this fundamentally reimagined ecosystem using altogether new kinds of what-if and other scenario analyses .
When AI is fully integrated into trade and logistics , it makes these industries not only more agile and reliable but also more sustainable . That ’ s a big deal , especially when you consider that these industries are among the largest in the world . According to a 2019 report from McKinsey , the global logistics industry is growing at around two to five percent annually , with the most dynamic growth occurring in emerging markets . Right now , the global logistics market is valued at US $ 4.7 trillion , employing over 120 million people in a dozen or more segments – from truckers to logisticians to freight forwarders to warehouse operators – that all depend on the same basic business model and , until recently , on a largely unchanging set of labor and operational practices .
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