Cognitive logistics – the new frontier

Automated warehousing, IT-enabled logistics and digitally transformed supply chains hold the key to a manufacturing economy push

The need for Industry 4.0 solutions to power a renaissance in manufacturing worldwide and particularly in India is well understood by all policy planners and industry CEOs in the manufacturing sector. Ubiquitous connectivity, devices connected by the billions to the Internet and new Internet of Things (IoT) applications are all providing the cyber push to make the cyber-physical future of the manufacturing world a reality. However, smart factories and heavily automated shop floors cannot by themselves provide the push to the manufacturing economy that is so necessary for a sustained economic boom to happen in the country. Automated warehousing, IT-enabled logistics and digitally transformed supply chains hold the real key to this future.Speaking at the Supply Chain and Logistics conference in Dubai, which is fast emerging as a global hub for transportation in our part of the world, it was interesting to find that while extensive automation has been implemented in the storage and movement of materials, the opportunities in cognitive logistics and supply chain planning is still at a nascent stage all over Asia and even in the advanced systems prevalent in the US and Europe. This may be because warehouse automation and the use of augmented reality-enabled picking systems and virtual reality-driven learning systems have become part of any state-of-the-art storage and retrieval systems, but rapid advantages in artificial intelligence, machine learning and cognitive technologies have yet to be fully utilised in reimagining and redesigning the supply chains of the future.One of the main reasons for the lag in the adoption of cognitive transformation in supply chains and logistics has been attributed by expert Christine Taylor to the large numbers of people and firms that have to work together to make a supply chain work. The different levels of sophistication of manufacturers, brokers, transporters, retailers and customers make it difficult to have a wide sweep implementation in a supply chain the way it can and does happen in a factory or warehouse.What has changed today to inject a new wave of optimism that cognitive logistics and supply chains are indeed going to happen in the very near future? Businesses are getting comfortable with setting up and using large data lakes and warehouses and deploying predictive and prescriptive analytics solutions. Omni-channel has become the standard for most manufacturers and retailers and with multiple companies, intermediaries and consumers interacting on an intelligent supply chain platform, the opportunity to understand the behaviour of every participant on the platform and learn with every transaction is enabling supply chain planners to cost-effectively plan and optimise delivery solutions for each category of customer on the platform. Digitally-enabled supply chains enable instant interchange of data amongst all partners and enable the learning from every transaction to be leveraged by all participants.

Companies like DHL, Walmart and Amazon are already practising anticipatory logistics where demand is being forecast and sometimes even created by intelligent suggestions to customers.

They are responding to customer impatience with long delivery lead times and manufacturer eagerness to produce in intelligent anticipation of demand. Artificial intelligence (AI) has a key role to play in this anticipation process with the entire sequence of demand forecasting, manufacturing, transportation and storage planning and maintenance of transportation equipment riding on the ability to use AI well and deploy machine learning to provide adaptive knowledge through the supply chain. Self-learning logistics processes are enabled by algorithms that recognise patterns and initiate action across the logistics chain. These actions could include volume and timing of shipments, inventory and stocking suggestions and pricing to optimise product offtake and movement across the supply chain.The ultimate solution to the ongoing demand for faster movement of people and goods worldwide is of course the “hyperloop”. But till such time that hyperloop movements become the standard, cognitive supply chains that treat a customer as a single entity across multiple channels, learn when transport or inventory disruptions could occur and ensure visibility and transparency from supplier to buyer will keep getting more sophisticated. Biased decisions will be avoided by machine management of most routine tasks, with intelligent handovers to experienced humans only when there are extreme and unforeseen circumstances including weather, unions and other “force majeure” situations.

Originally Published in Business Standard on Tue, January 23 2018