Artificial intelligence in logistics brings a revolution - Lower prices of final products, robots in warehouses, drones for goods delivery

Source: eKapija Tuesday, 09.05.2023. 23:55
Comments
Podeli

(Photo: Pixabay / StockSnap)
A robot that sorts goods in a warehouse, and a thousand shipments per hour, with an accuracy of 99% - is not a scene from a science fiction movie, but a reality in some global companies. If McKinsey is to be believed, more than four million robots will be present in 50,000 warehouses by 2025. Global warehouse automation market will reach the figure of 51 billion USD by 2030.

Robots in warehouses are not the only example of automation. Artificial intelligence has the potential to change logistics like no other tool has before. Some companies are already using it to optimize routes, automate warehouses, manage inventory, and all thanks to the analysis of a large amount of data.

- Artificial intelligence is likely to become more and more important in logistics in the coming years, but the complete takeover of logistics operations by AI may not be achieved anytime soon - believes ChatGPT, one of the artificial intelligence programs.

Dr. Dejan Mirčetić, research associate at the Institute for Artificial Intelligence of Serbia, says for the eKapija portal that it is only a matter of time when all logistics processes will be managed by artificial intelligence.

- Considering the complexity of logistics processes and the costs they generate in today`s uncertain and highly unstable global economy, AI represents a technology that can significantly change the appearance of modern logistics - says Dr. Mirčetić.

End users should also look forward to wider use, because according to our interlocutor, the prices of final products will be lower.

- In today`s modern logistics chains, logistics costs account for up to 50% of the final product`s price. It is a big misconception among end users that production costs are the biggest bearer of the price of the final product. Often, the logistics costs of placing a product on a market are drastically higher. Therefore, if the power of AI were to be used to optimize the mentioned processes and reduce logistics costs, it would significantly reduce the final price of the product - says Dr. Mirčetić.

A platform that forecasts demand and optimizes the supply chain is being prepared in Serbia

Some companies that already use robots and artificial intelligence in warehouses, such as DHL, say that this way increases sorting capacity by 40% - the robots sort a thousand shipments per hour, with an accuracy of 99%. In automated warehouses served by robots, AI can help track their movement, identify errors, and visually inspect goods. A Statista survey showed that 55% of companies have reduced costs by 10% or more by using artificial intelligence.

Robots can sort a thousand shipments per hour (Photo: SPACE_MICROBE/shutterstock.com)Robots can sort a thousand shipments per hour

- The use of AI in logistics will represent a competitive factor and contribute to market differentiation between logistics companies. So far, the company Amazon has gone the furthest in applying VI, which is developing an AI platform for its logistics processes. There is still no significant application in our country, because companies are not yet aware of the extent of AI technology, which will change processes in the industry - says Dr. Mirčetić.

That could soon change. The Institute for Artificial Intelligence of Serbia is currently developing a platform that, in addition to forecasting demand, will also enable optimization of the entire supply chain. In this way, as our interlocutor explains, the conditions will be created for complete automation of all key decisions in supply chains (procurement of materials, production timing, inventory planning, distribution, storage, vehicle routing, placement of products in retail stores, arrangement of products on shelves). The platform is in the development phase and is being designed by the Institute in cooperation with the company "Agromarket".

- Our platform will enable the right products to be available at the right time, in the right place and in the right amount that consumers and the market demand, naturally at the lowest possible costs for the company in question. The whole process will be automated and carried out by algorithms based on VI, which will be able to make optimal decisions independently, without intervention and corrections by logistics experts. The goal is to reduce the operating costs of the company, and to increase the level of service to final consumers - emphasizes Dr. Mirčetić.

And not only will artificial intelligence help us predict demand by analyzing the factors that influence it, such as news, weather forecast, social media trends, but it will also help in determining the prices of products.

- AI has great potential to enable us to better understand the current trends and "mood" of customers on the market, which will ultimately include proposing the appropriate price that customers are ready to pay for a certain product - says Dr. Mirčetić.

Driverless trucks and drones to deliver goods

Further development of artificial intelligence in the logistics sector will affect employees as well. Workers who now work in warehouses have received serious competition that will become more and more dangerous. The company XPO Logistics Inc estimates that robots in warehouses increase efficiency six times. According to our interlocutor, artificial intelligence will threaten all those jobs that are based on processes that can be automated.

- Primarily, these are jobs in the warehousing and transport sector, where we can soon expect complete automation of activities. On the other hand, AI will also contribute to the creation of new jobs that will be focused on the design of various ERP systems (software for managing processes in enterprises) based on AI - says Dr. Mirčetić.

Algorithms to help the entire supply chain (Photo: Zapp2Photo/shutterstock.com)Algorithms to help the entire supply chain

Artificial intelligence also affects transport. By using artificial intelligence, Alibaba managed to control delivery routes and increase efficiency - by 10% reduced vehicle use and 30% reduced distance. However, it seems that we are still a long way from autonomous trucks and the use of drones to deliver goods, which were once heralded as a revolution in the sector.

Amazon has been developing drones for the delivery of goods for 10 years, but without much success. Only one delivery was made in 2016, and testing has been marred by crashes, safety concerns and regulatory difficulties. The company recently introduced a drone that weighs 36 kilograms, has a diameter of about 150 centimeters, and delivers packages from a height of 3.6 meters. The drone can carry packages of less than 2.2 kg, and it travels up to 12 kilometers in a round trip.

- The drone is independent, which means it has the power to make decisions. If it sees something emitting heat, and is unable to deliver the package, it will return to the station. But there is still an operator who monitors the entire process - they say in Amazon.

However, as our interlocutor notes, for the mass application of technologies such as drones and autonomous vehicles, a major obstacle are the current legal frameworks that do not recognize the mentioned technologies and therefore do not regulate the way of using them.

- As far as the technical side is concerned, research in these areas is advancing every day, especially in the area of autonomous vehicles, where we are already in a situation where we have fully autonomous vehicles that are able to safely drive the vehicle through traffic flows during peak loads (morning and afternoon rush hours). - says Dr. Mircetić.

Our interlocutor points out that in addition to legal frameworks, for a more massive application of these technologies, especially autonomous vehicles, it is also necessary to overcome the fear of potential users.

- The mentioned fear is manifested in the fact that the users are afraid of the situation in which they are in the vehicle, and they are not driving it, but rather a certain algorithm that is a completely foreign and abstract construction for them. This is completely natural, because people are only afraid of what they do not know. This has been the case with other technologies in the past. This is exactly one of the tasks of the Institute for Artificial Intelligence of Serbia, to try to reduce the gap and fear of AI in society. I believe that through getting to know AI, the fear of its application will decrease more and more and that we will soon have a widespread application of artificial intelligence - concludes Dr. Dejan Mirčetić, research associate at the Institute for Artificial Intelligence of Serbia.

Marija Dedić

Comments
Your comment
Full information is available only to commercial users-subscribers and it is necessary to log in.

Forgot your password? Click here HERE

For free test use, click HERE

Follow the news, tenders, grants, legal regulations and reports on our portal.
Registracija na eKapiji vam omogućava pristup potpunim informacijama i dnevnom biltenu
Naš dnevni ekonomski bilten će stizati na vašu mejl adresu krajem svakog radnog dana. Bilteni su personalizovani prema interesovanjima svakog korisnika zasebno, uz konsultacije sa našim ekspertima.