Supply Chain 4.0: AI and Robotization

Automatic processes, machine learning, and robotization force a constant updating of the knowledge for those professionals responsible for logistics in MNCs and SMEs.

On one hand, ERP systems have become the nerve center of companies and within these the logistics sector is the true heart and engine of all activity. Specialized logistics services companies proliferate and create models that are responsible for the dynamization of international trade, both B2B and B2C.

These systems transcend the mere management we have known so far, processing thousands of data generated from all departments of the company or collected by automata. This data is systematically analyzed and managed by algorithms that generate automatic decisions, learning from successes and errors.

But if there is something that is causing the entire logistics process to change in a radical way, it is robotization. Until date, a large number of personnel dedicated to logistics processes such as product and merchandise handling, order issuance, warehouse and inventory control or replenishment management were needed. However, robots are replacing these functions and ending, to a large extent, with the need for labour. These are capable of carrying a load of up to 500 Kg from one end to another of the warehouse. And even move it from one warehouse to another. In the same way, they can rotate 360 ​​degrees on its axis, rise to load merchandise or deposit it gently at any point. We need to consider that they do much faster than humans without getting sick or requiring rest. 

Within five minutes, the robots recharge and have a range of 4 or 5 hours. So they can cover a full 8-hour shift with a total of ten minutes of recharging. Consequently, they can perfectly cover three daily shifts. It has no conflict between them or collective claims and they are immediately replaceable in case of breakdown or need for maintenance.

The logistics robotization process is generating profound changes in the business model that affect all areas, especially human resource management.

According to reports from the World Economic Forum, by 2025 the replacement of human personnel with robots in all basic professional areas will have reached 52%. This means the loss of countless unskilled jobs. That will be compensated with the creation of 58 million qualified jobs, necessary for the robotic revolution, in the next 10 years.

It is not difficult to think that technical qualifications will be one of the challenges to overcome in this whole process.

Featured examples of robotization in large multinationals

Two of the most prominent precursors within this logistics reorganization have been two giants of online commerce; Alibaba and Amazon.

Amazon’s experience

Amazon has more than one hundred thousand robots dedicated to managing the orders of its customers and all its stores are currently automated. Quite the opposite of destroying employment, the company has doubled the workforce since 2016, currently having more than 500,000 workers.

Kiva robots, used by the firm, can easily replace physical work and repetitive activities that are easily programmable. But the same does not happen with another set of required skills that are demanded in new positions to add value.

Alibaba’s model

With its logistics model, it has facilitated the penetration of thousands of companies in different international markets. Process automation and artificial intelligence are the engines of productivity in our day and this, in turn, is the key factor in competitiveness.

Only through these logistic processes is possible to manage the huge volume of orders for days like Black Friday or the Alibaba shopping festival.

JD’s case

Another Chinese marketing giant, JD has recently surpassed Alibaba with a warehouse capable of processing more than 200,000 orders daily with only the supervision of 4 people. The objective of this company is to provide service to all of China on the same day as long as the order is generated before 11 am.

Not only has it invested millions in robots for warehouses. It has also done so in the incorporation of automatic systems in trucks, means of transport and distribution drones.

Qualification and training is the key to future employment

The same report of the World Economic Forum Foundation provides very significant data regarding the qualification needs and intentions of companies.

The entire process of digitalization in the logistics sector will involve a new order in human resources where 54% of employees must update their skills and knowledge on urgent basis.