What does Artificial Intelligence mean for logistics service providers?

At the end of last year, Boltrics mentioned some logistics trends and developments of this new year. In addition to economic, ecological and organizational trends, one other development was mentioned. Here, the technological with regard to data and specifically  regarding to Artificial Intelligence (AI) was pointed out. This may sound overly remote for many of you, but this technology is really coming. To prepare you (and secretly ourselves) for this, I have immersed myself into the matter and how this can be applied to the logistics sector. Thus, I would like to explain this in this blog.

What is Artificial Intelligence?

Let’s start at the beginning. What is Artificial Intelligence? Until now, scientists have been unable to precisely define the concept of ‘intelligence’, so defining the artificial variant is not conclusive either. But we are going to try it anyway. Basically, AI applies to devices or systems that proactively and predictably deal with data and impulses from their environment. Based on this input, they then take decisions themselves. Within the world of AI, six different forms are currently distinguished, which we will also elaborate on in the coming year.

1. 1. Machine learning, deep learning and neural networks;
   2. Natural Language Processing (NLP), speech recognition, converting from speech to text;
   3. Computer vision (recognition of images, interpretation and conversion into analysis and action);
   4. Machine reasoning (making policy and making decisions based on learning algorithms);
   5. Business Analytics and Data Science (processing structured and unstructured data);
   6. Robots and sensors.

For understanding the difference between Machine Learning, Deep Learning and AI, you can also watch this video.

Artificial Intelligence within logistics

How will this technology affect the logistics sector? Many see AI as a threat, where it will completely replace order pickers, forklift- and/or truck drivers. Although this is a possibility in the distant future, it is more likely that in the short term AI will help you, for example, in areas such as customer satisfaction through more customer-specific approaches. Or it helps you with more efficient warehousing by e.g. continuous optimization of order picking strategies. Also, think about real-time processing of information flows from different sources for planning your (international) transport shipments. The possibilities are applicable in every logistics area, which makes Artificial Intelligence so interesting and thorough.

Artificial Intelligence: the most promising development

Despite the possibilities of AI, entrepreneurs remain reserved. Research shows that in 2018, 41% of the surveyed companies are still uncertain about the applicability of AI. At the same time, investments multiply within that same area. It seems like everyone puts their money on a horse they do not believe in, while statistics undisputedly tell us something else. If you, as a company, want to be future-proof, then AI is the horse you want to bet on. Do not get fooled by catchy names such as Thunderbolt, Dazzle, Moonlight or Hot Socks; Arthooficial Intelligence will take the price.

Many aspects show that now is the moment for logistic companies to get aboard. Never before AI was as mature, reliable and affordable as it is today. Without you realizing it, Artificial Intelligence is omnipresent. For example, it determines the life of the battery of your smartphone by predicting which apps you are going to use today. Or how about the video games your children play? The computer-controlled opponents act on the basis of AI, by anticipating the behavior of the human opponent. Not to mention self-driving cars, personal advertisements by retailers and ‘smart’ thermostats. In short: AI is everywhere.

The logistics branch is ready for Artificial Intelligence

So the technology can be found in many places. But (still) little in logistics. Is the ready perhaps not ready for it? As far as I am concerned: it certainly is. In fact, I think logistics is the right place to fully utilize the power of AI. Why, you ask? Because the logistics sector is originally a data driven industry. Every analysis, decision and planning is made based on previously recorded data. For a long time the idea prevailed that the amount of recorded data was inherently related to the competitive position of a company. This resulted in huge data warehouses and endless databases. This data has been built up in all those years and (if done correctly) is recorded in a structured way. However, practice tells us that at least as much data can be found in an unstructured form.

Until recently, there was no way to make this (unstructured) data suitable for analysis. With the help of Power BI, Boltrics does make this possible. With dashboards and reports specifically for logistics service providers, you get direct insight in the most relevant KPIs for your organization. Next, you are able to make correct decisions in no-time and respond effectively. In other words: based on historical data it is possible to identify at what point the ship started heading in the wrong direction. But you understand: at that point the wrong direction had already been headed in.

In the AI era, we can use this data even better. In addition to acting responsively, proactive and predictive acting is applicable. With the help of AI, processes can be started fully automatically and services are not standardized but (on a large scale) personalized. Consider, for example, personal advertisements from large retailers as Amazon: by mass collecting data, the service is improved on a personal level by means of data and algorithms.

Artificial Intelligence with Microsoft, Boltrics…

For you as a logistics company, it is currently important to investigate in which fields AI can apply and where you can gain quick wins. At Boltrics we want to do this together with our customers. Where they can indicate in which fields or directions they see the most potential for AI.
Of course, we also keep a close eye on developments in the field of AI. For your organization, our own and in my case, from personal interest. In doing so, we are provided with up-to-date information from Microsoft, where people are constantly looking for new application possibilities of AI. Next, we will look for ways to offer cutting edge technology to maintain the lead in this efficiency driven market.

…and you!

We understand very well that it is a considerable task for logistics companies to switch from a reactive analytical attitude to an AI driven proactive and predictive attitude. That is why we keep an eye on developments for you and in the coming period we will also go for an industry-wide, future-proof solution in which we learn from the current business with the use of future technologies. That is what we stand for and we do so with full conviction. Do you already have questions, ideas or ready-made requests concerning Artificial Intelligence? We would like to discuss with you, so do not hesitate to contact us.