AI Applied to Logistics
Artificial Intelligence, execution of operations without any human intervention
The term Artificial Intelligence was created by the American scientist John McCarthy in 1956 with the aim of defining computing systems capable of partially reproducing human cognitive capacity, but analyzing a much larger volume of data. Researchers Andreas Kaplan and Michael Haenlein define it as “a system’s ability to correctly interpret external data, learn from that data, and use that learning to achieve specific goals and tasks through flexible adaptation”.
In other words, we can say that Artificial Intelligence gives systems conditions to efficiently analyze data, performing operational actions without any human intervention. This is only possible thanks to the combination of three elements:
- Software — we are talking about the software itself, which gives precise guidelines for the execution of each of the tasks by the equipment (hardware).
- Algorithms — that is, the orderly sequences behind each command applied to perform procedures precisely, always depending on existing conditions.
- Machine Learning — literally machine learning. The software is able to interpret patterns and establish the most profitable route for operational tasks, gradually improving the processes it commands.
The International Data Corporation conducted a survey and found that investments in this area grow an average of 46% per year. In 2021 alone, technology companies should move 52 billion dollars around AI (Artificial Intelligence). Without AI, other engines like Big Data would be useless. What good is a huge volume of data if it can’t be analyzed quickly? That’s what Artificial Intelligence makes possible.
It was a matter of time before complex segments such as Logistics would seek support in this tool and today it is widely used. AI allows the performance of many tasks within this area, such as:
- Consumption forecast – artificial intelligence crosses internal information, such as sales reports, with data extracted from the Internet. With this data, the AI perceives the consumption intention of the users. This serves to control the stock, avoiding lack or excess of goods, minimizing the waste of resources.
- Warehouse automation – to automate a warehouse you need management software (WMS), in addition to investments in robotics. These two tools allow carrying out transport operations and placing products autonomously. Over time, AI identifies patterns and optimizes internal routines more dynamically, an increasingly common application in systems with Stacker Cranes and Mini Load.
- Product displacements – we are talking about two aspects:
- Intralogistics movements – the WMS registers movements in the warehouse, identifying and then suggesting patterns, both in the case of robotic spaces and those operated by human beings. That is, AI can manage inventory.
- External displacements – AI interprets and incorporates updated traffic information into local systems. With this data, the software traces the most suitable routes for delivery, in addition to correcting itineraries in real time, in case of unforeseen circumstances. We’re not just talking about routes here, but fleet management. AI can be used for truck dispatch. The system can track fleets, supervise deliveries, view their loads and even monitor vehicle fines periodically. Artificial Intelligence software is also already being used to manage last-minute changes in logistics, forecast arrival times, taking into account the influence of the weather itself.
- Greater control of data in the CS (Supply Chain) – automation in a supply chain, with the presence of Artificial Intelligence, allows the verification of inventories in real time, as well as the instant issuance of supply orders or the tracking of orders, precisely, among other things. Such data integration improves logistic traceability, keeping the user informed about the goods’ journey. The Artificial Intelligence itself can talk to the consumer through chatbots programmed for this purpose.
But what would be the advantages of Artificial Intelligence for the Logistics sector? Well, we are talking about the rationalization of all the processes involved, such as, for example, the reduction of human labor to repetitive tasks, with lower added value, reorganizing HR costs. But there are other positive points in this technology. See some of them below. Among other things, AI allows the logistics operator to:
- Optimization of decision-making – there are software that analyze data and optimize decision-making for managers in search of the best possible solutions, with a very low error rate.
- Decreased failures – even when working with a large volume of data, management software and other AI systems are more agile and accurate. With this, the chances of errors in the calculation and execution of the tasks are practically eliminated.
- Increased productivity – due to the ability to read, interpret data and reach the conclusion of which processes are most suitable, AI contributes to a scalable and standardized production and operation, in accordance with the goals and objectives defined by the manager, which can manage everything even without being in the physical environment of the company.
- Cost reduction – Artificial Intelligence allows better allocation of loads in the warehouse, preparation of goods for shipment, planning of the best routes for transport (saving fuel and tires, for example), distribution of products within the previously established time frame and the definition of the ideal time for vehicle maintenance. A series of strategies that translate into cost reduction.
- Improved storage processes – performing real-time inventories makes storage management more efficient.
- Increased customer satisfaction – service accuracy increases with AI, leaving the customer more satisfied with shorter lead times, attractive prices, order tracking and the product in perfect condition.
- Faster customs and tax posts – the Brazilian government has always invested in technology in border regions and AI helps a lot in this regard, combining time reduction with greater efficiency in the inspection process.