“Alexa, add toilet paper to my shopping list.”
Artificial intelligence (AI) has crept into our everyday lives. Though some fear technology invading our privacy, we’ve come to accept that AI is here to stay. It has changed the way we search for information, shop for products, and communicate with others. But AI hasn’t just impacted our personal lives. Recently, almost all industries have seen a rapid increase in technology use, specifically AI and automation, to make their businesses more efficient and innovative. Supply chain and logistics companies have integrated these technologies to double down on business initiatives while cutting costs.
What is AI?
The term “artificial intelligence” is often used to describe machines (or computers) that mimic cognitive functions associated with the human mind, such as learning and problem-solving. AI has allowed for advancements like voice recognition technology, digital assistants (like Alexa and Siri), and more complex technologies like driverless cars and autonomous robots.
How AI is changing fulfillment
Artificial intelligence has paved the way for efficiency and transparency throughout the supply chain, but most significantly in fulfillment. Through automation and robotics, AI has increased delivery times, reliability, and customer satisfaction. Here are three ways to incorporate AI into your fulfillment centers.
1. Machine learning
Machine learning is a method of data analysis that automates analytical model building. It is based on the idea that systems can learn from data, identify patterns and make decisions with minimal human intervention. Instead of programming machines to mimic human behavior, the machine learns to perform tasks through analytics and algorithms.
In fulfillment centers, machine learning digests enormous amounts of data to provide insights to improve processes and strategies throughout the warehouse. Areas like inventory management use machine learning to identify order patterns and ensure items are in stock and ready for packaging. Order accuracy and fulfillment speed significantly improve with real-time data on in-stock inventory. For example, Oliver Wyman saw the introduction of machine learning systems lead to a 15% improvement in demand forecasts’ accuracy compared to statistically based systems.
Fulfillment centers have jumped into the use of robotics to take over mundane, repetitive tasks. In doing so, they have significantly reduced disruptions like human error. From stacking and sorting to inventory management, robots can be integrated to streamline processes and reduce fulfillment times.
It comes at no surprise that Amazon was one of the first e-commerce giants to adopt robotics. In 2016, they already had 45,000 robots deployed throughout 20 fulfillment centers. Today, Amazon has more than 200,000 mobile robots working inside its warehouse network, alongside hundreds of thousands of human workers. With the addition of robotics technology, Amazon has maintained their commitment to one and two-day deliveries to Amazon Prime customers.
3. Decision-making with data
Better decisions come from better data. Advancements in artificial intelligence have allowed supply chains to intercept and analyze massive amounts of data. Due to this increase in data analysis, Gartner predicts decision-support will surpass all other types of AI initiatives to account for 44% of the global AI-derived business value by 2030.
Through an AI-driven approach, businesses can connect devices and warehouse management systems to collect data with touch-points in all aspects of the supply chain. “Every transaction, every customer gesture, every micro- and macroeconomic indicator, all the information that can inform better decisions is available.” writes Eric Colson for the Harvard Business Review.
Experience and education aren’t enough to drive business decisions and anticipate risks. AI gives business executives deep insights into all aspects of the businesses resulting in decision-making through information, not intuition.
A pivotal moment
The implementation of artificial intelligence is a pivotal moment for any growing business. Whether you’re enhancing your current business applications or overhauling your entire technology strategies, our experts can help improve your fulfillment center processes through AI. Learn more about how AI can advance your bottom line.