Operations outlook: Are we ready for the robots?

A report published by PWC shows that for Industry 4.0 to be realized, most enterprise processes must be digitized. This can include analytics, smart warehousing, logistics visibility, and a plethora of other areas along the supply chain.

McKinsey & Company defines Industry 4.0 as the next phase in digitization of the manufacturing sector, driven by disruptive trends including the rise of data and connectivity, analytics, human-machine interaction, and improvements in robotics.

According to Gartner’s 2022 “Supply Chain Technology User Wants and Needs Survey” (UWaN):

• 96 percent of respondents have already deployed or plan to deploy cyber-physical automation by 2024.

• There will be more than two million intralogistics smart robots by the end of 2024.

• By 2027, 50 percent of companies with warehouse operations will leverage AI-enabled vision systems to replace traditional cycle counting processes.

• And by 2028, there will be more smart robots than front line workers in manufacturing, retail and logistics due to labour shortages.

But the shift in processes and technology will also heavily impact the talent section of our human operated processes. This evolution of the AI generated supply chain will require current employees and new employees to continue to increase their skill levels and techniques for current roles and for future roles that we haven’t even heard of yet.

Nick Nanos, chief supply chain officer at LCBO, Ontario’s liquor retailer, views AI and digitization as something we should embrace, not fear: “I think that human connection is critical. There will always be jobs in certain areas, they’re just going to be different. It’s like automated warehouses today versus the conventional buildings of thirty years ago; there are better jobs in most cases with better trained people that are more technicians and engineers working in these automated facilities. And I think it’s the same in so many other roles. I think it’s going to make our lives that much better.”

When it comes to AI, Nanos says, “the reality is I welcome it, and I think it will be interesting and it’s a good skill to have for success, being open to change, embrace it.”

While attending the Manifest trade show and conference in Las Vegas in February 2024, I was able to hear about the implementation of generative AI from Nate Robert, CTO and chief product officer at Ryder Systems.

Robert described the adoption of generative AI as a three-wave process. The first wave is the advent of foundational models. The second wave utilizes shallow use-cases built on top of the foundational models using public data. The third wave is a long-term solution, where you have large companies with proprietary data sets and training them on top of the foundational models – that’s when you get deep insights.

The digitization shift can also be seen in port and drayage markets. Toni Ann Careccio, chief customer officer of the drayage operating platform PortPro revealed: “Drayage is such a critical component of our supply chain; it’s been the black sheep for a long time and now it is really being looked at. It’s important because a lot of these drayage trucking companies are running on paper and pen, spreadsheets and EDI, and it’s really hard to create sufficient and sustainable supply chains when these companies themselves aren’t running efficiently.”

PortPro is providing full digital visibility in the first mile delivery model, allowing online booking, real time tracking, and document access to drayage carriers. Careccio believes that over the next 10 years the market will see as big a digital transformation in supply chain, specifically within drayage, that car services saw with Uber.

During a panel discussion at Manifest 2024 focusing on recent advances in connected and smart warehouses, A.K. Schultz, CEO and co-founder of SVT Robotics, explained that the future will showcase multiple types of technologies working in concert with each other. “One of those technologies is human beings. Right now, most systems cannot coordinate a manual picker with another picker, so you can’t handle peaks, and you have to treat human beings almost like robots that are just not made of metal.”

He further explains this concept, saying this is where multi-agent systems would come into play and employ a common data system allowing them to operate in the same field. But according to Shultz, “There is no one robot to rule them all.”

From smart robots and automation to AI-generating operating platforms, the supply chain is benefitting in the tech blitz currently buzzing around the world. However, I believe that in a world full of technology, it is human interaction that will be the glue keeping it all together. We can have machines and robots working to make us more productive and efficient, but without the human touch, without the human consumer, what is it all for? Only time will tell, and I’m ready to buckle in for the ride.