Robots are coming for the supply chain.

From warehouse sorting to package delivery to supply chain management, artificial intelligence is already part of day-to-day operations for many third-party logistics companies. Robots deliver small parcels both on the ground and by air.

Although Amazon has been hailed as the delivery industry’s great disruptor, legacy companies like FedEx and UPS are actively investing in artificial intelligence as well.

Automating the End-to-End Supply Chain

Supply chain managers have been using real-time data to analyze and optimize their processes for years now, especially when it comes to supply chain visibility. In this way, artificial intelligence is already integrated into most supply chain operations. Supply chain leaders use software for inventory management, automating orders to suppliers. Warehouse managers use AI to tell employees which items to pull from shelves and package, maximizing productivity. Advanced mapping tools tell delivery drivers exactly when to turn, updating routes with real-time traffic information.

The next step in the evolution of many of these processes — especially warehouse operations and last-mile delivery — is to replace the employees.

Fast-moving fulfillment centers are becoming more and more important. Two-day and next-day delivery depend on items leaving warehouses as soon as possible after an order is placed. To meet customer demand, warehouses need technology that constantly updates employee tasks.

Amazon has started introducing “CartonWrap” machines in select warehouses, which can pack 600 to 700 boxes per hour — up to five times the rate of a human worker. The company also uses machines that work with people to move pallets of inventory within warehouses. And in 2018, Amazon was issued a patent for a robotic arm that could toss items — seeking to replace “pickers” and “stowers” who put items into and take them out of warehouse bins. Amazon is evolving fast, and we expect to see more robots introduced in the months to come.

The next link in the supply chain is, for most deliveries, the truck. For now, all trucks still need human operators, but experts widely believe that trucking will widely adopt autonomous vehicle technology as soon as possible.

Then supply chain automation will reach the final mile. Amazon is also developing several versions of a robot that can deliver packages to customers’ doorsteps. One version is owned by the customer and goes to retrieve deliveries; the other, affectionately named “Scout,” is dispatched from an Amazon vehicle.

UPS and FedEx are actively competing with Amazon in the air. In March 2019, UPS became the first third-party package delivery company to complete a commercial delivery via drone. In partnership with drone technology company Matternet and state and federal regulators, UPS now delivers medical samples on a hospital campus in Raleigh. FedEx is working in partnership with the Memphis-Shelby County Airport Authority on a pilot program under the same federal guidelines.

Amazon announced Prime Air, its drone delivery pilot, in 2016, but the company was not selected for the U.S. Department of Transportation pilot program in 2018. There has been little news about Prime Air since.

How Legacy Carriers are Adopting Automated Processes

UPS was the first U.S. carrier to make a commercial delivery via drone. The company has also invested billions in its Advanced Technology Group, whose research has led to changes in everything from the way parcels are arranged on trucks to tiny chips in package labels that track parcels. UPS also relies on AI for the navigational tool that guides its drivers, in the hopes of getting them to deliver just a few more packages per shift.

FedEx has focused on its distribution hubs. As of October 2018, 130 of those hubs had robots that unload trucks and take packages down from warehouse shelves; geofencing and GPS technology, which can automatically register when trucks arrive at hubs; and yard management systems, which optimize truck operations as they come and go.

Even the centuries-old U.S. Postal Service is in on the action. This summer, USPS received a patent for a “sorting robot” that would be able to grab items in a delivery vehicle’s freight bay, group and shrink-wrap items addressed to the same location, and move them between item storage bins. Ultimately, the patent envisions a robot that can pass items through a window to the vehicle’s driver.

Currently, most mail is automatically sorted by ZIP code. But employees have to further group letters and packages by route and address. If this robot becomes part of USPS processes, some of that work would still have to be done by employees in post offices — but the last step could be done on the road, reducing some of the labor required per item.

The Future of Supply Chain Automation

Investing in automation is good business. Although it requires significant spending up front, a workforce made up of robots and skilled programmers and managers is much cheaper in the long run than a workforce of employees at all those levels. This means there will be fewer employees at third-party logistics companies in the future, of course.

Trucking is currently viewed as a reliable, well-paying job. Warehouse work has boomed in the last decade. Many of those positions could be automated within the coming years. On one hand, these jobs often require long hours and physical labor, making them hard on workers. But on the other, many of the jobs created by the e-commerce boom may not last much longer.

But as more of the supply chain becomes automated, operations are likely to get faster and more efficient. Robots are accurate, reliable and tireless. While they do make mistakes, programmers can analyze what caused those problems and try to prevent them from happening again.

Supply chain automation is already part of the delivery ecosystem, and will be the norm in the not-too-distant future. It’s just a question of when.

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