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What is AI?

SHD considers: What is Artificial Intelligence in logistics?

Artificial intelligence (AI) is the term used to describe machines that mimic certain ‘cognitive functions’ associated with the human brain – such as learning and problem solving – and then employ the processed information to take the necessary action that will optimise their chances of achieving a pre-defined goal.

Or, put more simply, AI is the ability of a machine or computer program to think and learn like a human.

For many years the idea of machines that could deliberate for themselves was confined to the pages of science fiction novels and the movies, while the question of how, in real and practical terms, a machine might learn the behaviours of a person - and what this might lead to – has occupied the thoughts of generations of boffins.

Yet in recent years thanks, among other things, to advances in computer technology and data systems, artificial intelligence has gradually become part of our everyday lives. Doctors use AI-based systems to diagnose their patients, security forces deploy computer software to identify criminals and intelligent robots carry out increasingly complex tasks across a range of manufacturing industries.

AI can give companies insights into their operation that they may not have been previously aware of and, in some cases, can perform tasks better than humans - particularly when it comes to highly repetitive jobs. So it’s no surprise that many of today's largest and most successful businesses are using some form of AI in an attempt to improve their operational performance and gain a competitive.

With its ability to automate and simplify numerous processes, it’s no exaggeration to say that the ongoing development and growing maturity of AI has had a revolutionary impact on the logistics industry. As the increasing uptake of handling solutions based on warehouse automation technology and autonomous mobile robots as well as the use of predictive analytics testifies, AI is transforming various warehousing and inventory management processes.

Nazar Kvartalnyi, COO of US-based Inoxoft, says: “Warehouse businesses can maintain efficiency with the help of robotics and AI. AI is used to create robots for warehouses that help with faster pallet transportation and handling, reduced and optimised warehouse aisle widths and easier double deep packing among many other things.

“Such AI-based robots are designed to pick multi-size packages, use visual recognition to identify goods and control them. Just look at Amazon’s robot warehouses – they handle billions of goods each year and this is all due to the smooth running of robots that move autonomously without crashing into each other and understand where they are going and where they need to place packages.”

The modern warehouse is now replete with AI technology – such as such as Autonomous Mobile Robots (AMRs) for example - that allows fast, efficient sorting of goods.

AMRs differ from the long-established Automated Guided Vehicles (AGVs) in that the need for someone to manually reroute the vehicle at various intervals is negated. Instead, AMRs use AI to choose the optimum route around a store for themselves.

Sales of AMRs are increasing rapidly with the latest market research from Interact Analysis indicating that more than 1.1 million robots could be deployed in warehouses across the globe before the end of 2024.

And, for parts of the retail sector, it is widely believed that artificial intelligence holds the key to unlocking value in the supply chain.

“By tapping into the vast quantities of data held within a retail organisation, and by combining this with data from external sources, artificial intelligence has the ability to offer potentially transformative insights into future sales performance,” says Dr Manuel Davy, founder of Vekia.

He continues:Finding the optimum level of discount to effect a sale need no longer be a vague estimate based on a far from accurate sales forecast, and allocating stock to the most appropriate store to achieve a sale does not have to be guess work.

“The answer lies in understanding the complex patterns that exist in large pools of data, where the macro can reveal optimal outcomes at a detailed level. Using AI can raise forecast accuracy by over 50% and bring significant financial savings.”

In France, leading retail brands such as Galeries Lafayette and ID Group have successfully deployed AI and machine learning to achieve dramatic results – Galeries Lafayette now has a 97% accurate forecast between projections and true sales figures and ID Group has benefitted from an 8% stock reduction, releasing £55 million of working capital.

AI has numerous uses in the supply chain and logistics sector and companies all over the world are implementing this powerful technology into their everyday operations. Using artificial intelligence to automate routine tasks that otherwise take a lot of time improves efficiency and accuracy and reduces the probability of human error. As a result, the implementation of AI in the logistics industry is reducing costs and increasing customer satisfaction.

Successful logistics has always required great intelligence – today’s supply chains increasingly rely on artificial intelligence to succeed too.

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