Automation is the foundation for intelligent intralogistics

Artificial Intelligence (AI) is becoming increasingly of interest for organisations wrestling with new supply chain challenges. But can companies maximise the value of AI without a strong intralogistics foundation?

The supply chain is no longer just about effective movement of physical goods; with new business models, supply chain data is becoming an increasingly valuable asset. From anticipatory logistics to blockchain and connectivity through to the Internet of Things (IoT), Steve Richmond, Director Logistics Systems, Jungheinrich UK, considers the future of intelligent intralogistics.

Data Asset

Intelligent intralogistics is enabling the development of dynamic business models and increasingly efficient global collaboration. A raft of eCommerce companies now manage extensive logistics operations handling worldwide fulfilment, without ever handling or owning the goods they sell. Blockchain is facilitating the development of new universal contracts supported by machine to machine payment with zero manual intervention. 24 x 7 convenience logistics, for items such as groceries and medicines, is becoming commonplace. Companies are beginning to explore anticipatory logistics to better predict the point of consumption to improve performance and drive down wastage. 

At the same time, companies must deal with consumers’ rising expectations. Speed and efficiency remain important, but customers are also looking at a company’s sustainability strategy and environmental credentials: AI will have an essential role to play in supporting environmental change, such as smart energy logistics.

This is a complex, fast moving and inherently data driven intralogistics environment. Indeed, it can be argued that in some cases it is the data owners, rather than the owners of the physical products, that now drive global intralogistics. 

Unlocking Value

If data is the key to both supply chain efficiency and business innovation, how can companies unlock the value of this essential asset? While technologies such as AI and blockchain can enable extraordinary change, companies need to determine how best to create the underlying logistics environment that both harnesses and leverages accurate data resources.

The value of data is increasingly recognised, with UK firms rapidly embracing the vision of automation and the creation of the smart, connected warehouse. According to Automation in Intralogistics research undertaken by Sapio Research, on behalf of Jungheinrich, within two years, the majority of organisations plan to have automated at least 50% of supply chain operations.

This shift towards semi- and full-automation is providing an opportunity for organisations to maximise their data assets. With the end to end supply chain becoming  more complex, it is often difficult to establish where the boundaries lie, and as business models evolve, companies are looking to leverage data not only to transform process and product flow throughout the supply chain but also sharing that process visibility with partners, suppliers and customers to enhance relationships. As the data becomes more accurate, more real-time and more available, companies will increasingly look to monetise the data flow alongside, even instead of, the product flow.

Conclusion

The shift from focusing on the efficient, effective flow of products through the supply chain to actively harnessing and exploring the value of the associated data asset is challenging both operationally and culturally. Intelligent intralogistics is opening up new business opportunities but how can companies successfully grow to embrace automation and achieve a smart, connected operation? 

From understanding the business processes of today and the future vision, to supporting the entire automation lifecycle and making the case for each stage of the automation journey, a partner, rather than a supplier is vital. According to the research, well over half (55%) of respondents say that advances in technology have, to a great or very great extent, driven change within intralogistics over the past five years. Also, that technology led change will accelerate. As companies embrace automation through robotics and the Internet of Things (IoT) a myriad of new data resources will provide an exciting platform for AI, enhanced forecasting and anticipatory logistics.

With the speed of change not only in customer expectations and attitudes but global, intelligence enabled opportunities, organisations will have to embrace a constantly evolving business model. AI and blockchain are exciting enablers of new business models, but it is the depth, accuracy and timeliness of trusted data resources that will be at the heart of successful intralogistics operations in the future.

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