Automation and the future of Supply Chain Management

Since Artificial Intelligence (AI) has been a trendy topic, people have always feared the development of machines, especially about the overcoming of the whole human possibilities. This fear has been fueled by a phenomenon that has already happened, which is the replacement of the human labor by machines since the industrial revolution. However, an exponential boom in automation could mean a tremendous change in the way future supply chains will operate, and this includes, of course, the replacement of millions of workers, and hence a hard impact from the next decade on.

When talking about automation and the future of supply chains, there are hopes for an accelerated progress, but also many questions. The production of goods and services could be faster, more efficient, cheaper, and more environmentally friendly than at any time in history. At what cost? That is the million-dollar question.

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It is an inescapable reality. One of the most urgent needs of the industry today is to optimize business growth through the development of the supply chain, not only by improving the quality of products and services but also by implementing structural improvements. Nowadays, businesses need greater security, visibility in real time, and up-to-date information for not slowing down the productivity, and, on the contrary, to gain more agility to each of the processes involved in the supply chain. This can be achieved by adopting technologies and information systems such as mobile computing, radio frequency identification, and automatic data capture solutions. Radio frequency identification, for instance, follows an upward trend of impact on the supply chain. Today, there are thousands of examples, such as Amazon, that demonstrate its remarkable benefits to manage the visibility of the inventories, transportation, shipments, and receptions derived from the great potential of getting automation into the supply chain. It is an unstoppable locomotive.

Read also: Where are all of these Supply Chain Management trends going? by David Kiger

On the other hand, non-humanoid robots are already part of our industrial environment. You just have to visit an automobile manufacturing plant to see dozens of robots soldering the different parts that make up the body of a vehicle. Thanks to Artificial Intelligence, the fast production of cars can meet the global demand for cars in a way that would be impossible otherwise.

However, in the distribution centers, there are still large numbers of operators manipulating the goods, as well as complex human-based systems of transport and storage of pallets and boxes. For how long? We don’t know. Both for picking boxes and for picking units the automatic and semi-automatic systems are the current concerns, but these are very complex solutions that, in addition, require a great economic investment. Nevertheless, there is something clear: These sophisticated technologies to automate the processes of storage, handling, and internal transport of boxes or units, and the preparation of orders will soon be partially replaced by robots. According to various sources, it is estimated that in ten years more than 50% of the warehouse personnel in the world will be replaced by robots.

These changes will be equally noticeable when it comes to logistics. Recently, an Uber truck traveled hundreds of miles automatically to deliver a batch of merchandise. This was one of many tests that will be done to make the clearance of goods a process that does not depend on human beings in the future (or, at least, depends on the least amount of human labor force.) Of course, this big change is just incipient. Machines are clearly not ready yet to overcome all the obstacles that involve carrying goods from one place to another, even through the excellent roads of our country. At present, any autonomous vehicle is minimally dependent on a supervisor who monitors the operation of the machine and takes care of any eventuality (a landslide, a fallen tree, an oil stain on the asphalt, etc.) The lists of jobs that will disappear in the future because of automation always include truck drivers, and it is not a false forecast.

The reason for this is, as expected, the cost cut. Indeed, truck drivers have good job benefits and, although it sounds cruel, they mean a tremendous expense for transportation and distribution companies. Research and scientific developments in this field are not casual. They do not invest millions of dollars in researches on automatic navigation systems for trucks (and perhaps ships) just out of curiosity. There is an executive need of an entire industry.

Automated Machining, Assembly and Checking_automation_logistics_suplly chain management
Image courtesy of Engineering at Cambridge at Flickr.com

One question we should all ask ourselves, regardless of what our job consists of, or what industry we belong to, is whether what we know can be easily done automated; and, in that case, what can we humans do so that our work can never be replaced by a robot. This sounds like science fiction, but we’ll see this battle in the future over and over: It will be a real situation for which you should also care about.

* Featured Image courtesy of untitled exhibitions at Flickr.com

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