Artificial Intelligence and the future of Warehousing

December 7, 2020

Artificial intelligence is steadily becoming the new normal in our daily lives with the 5G revolution which is no longer regarded as the future, but the present. Gaming, medicine, business, and all works of life are fully focused and based on new innovations and quantum leaps in machine learning and artificial intelligence. The supply chain industry is not left behind. Artificial intelligence has started to impact the logistics industry, along with the supply chain. We are seeing innovations such as smart roads and autonomous vehicles. The potential value to be gained in these incoming innovations is huge. Research shows it can generate from $1.3 trillion to $2 trillion per year globally.

The primary purpose of many AI implementations in the logistics industry is to automate time-consuming actions and save money. Artificial intelligence can be used to predict demand, modify orders, and re-route in-transit goods to warehouses where needed. Such planning in logistics means better service and lower logistics costs.  There are different ways AI is already being used in the warehousing industry, the most common being via automated warehouses.

AI in warehouse automation is mainly used to predict the demand for different products, drilling down to specific SKUs. Based on this data, orders can be modified and the most in-demand items can be delivered to the local warehouse. This new and efficient way of predicting demand enables planning of logistics well in advance and this means lower transportation costs. These automation systems for warehouses provide an opportunity to conquer a lot of routine tasks. The leading technology used in these systems is computer vision that can identify and help organize the inventory.

Self-driving cars are the new in-thing in the automobile world and it has proven as ground-breaking enough to transform the same technology into trucking and transportation. The use of automated vehicles in the logistics industry promises to save time and money, and statistics have shown that when perfected can reduce accident rates due to the removal of human error and other scenarios that are known to cause mishaps. There is a lot of work still to do, as currently, drivers are required to be at the wheel of autonomous vehicles, and it will take some time before the technology and regulations allow for fully autonomous vehicles to drive on roads without human supervision.

In the same vein, there are now warehouse ground vehicles and drones, and autonomous business processes such that robotic process automation (RPA) manages.

Some AI features enable warehouse wearable technology. Natural language processing makes voice-picking possible so that workers can operate hands-free and safely. Smart glasses are also equipped with cameras that use computer vision to automatically recognize barcodes. Also, cameras placed around the warehouse enable end-to-end product tracking.

Even with all these changes happening, it is still not widely adopted all over the west. In the MHI Annual Industry Report 2018, only 6% of respondents were currently using AI technology. Despite the low number, more than half of the respondents believe that AI has the power to disrupt the industry and create a competitive advantage. In 3–5 years, 47% of respondents expect to have adopted the technology.

So with all these new changes and efforts in the developed world, where does Nigeria standing in terms of making sure we are not left behind in this AI revolution? A general problem in the supply chain world remains the extreme dearth of trained professionals in the basics and a rudimentary knowledge of warehousing. With this, it becomes even harder to seek our already existing professionals to retrain and upgrade to begin to apply AI technology for the Nigerian warehousing industry.

With expansion plans and a fast-growing supply chain space in Nigeria, there is a lot to look forward to and a lot to prepare form on the part of organisations, supply chain professionals, the industry, and the nation at large. Some predictions for 2020 and the nearest future according to multiple industry sources and news outlets include the following:

  1. Nigerian Government is likely to expand contribution to the manufacturing sector to 20% by building more industrial parks near Lagos.
  2. 15 new solar-powered cold storage are expected to open in Kano state that will enhance the revenue from the agricultural segment in the warehousing market.
  3. The Federal Government officially commissioned its medical warehouse facilities in Abuja and Lagos worth more than NGN 1.56 billion to MDS Logistics.
  4. The government has set up Nigeria SEZ Investment Company to finance industrial parks in the commercial capital of Lagos and currently raising capital of USD 250 million from lenders such as African Development Bank, African Finance Corporation, and Nigerian Sovereign Investment Authority.
  5. The government has prohibited the importation of 41 products due to the recession in 2016-17 and will focus on building manufacturing and industrial units that will make the country self-reliant.
  6. The agricultural sector will be better off due to 15 solar-powered cold storage built by the government in the future in Kano State.

The Minister for Science and Technology has recently revealed that the Federal Government has put plans in place to create an agency for artificial intelligence and robotics in the country. The minister explained that the Ministry had been working in the background for a long time to facilitate the establishment of the agency and that after having gone through a number of processes and finally were getting ready to start the agency.

While there is no specific mention of how this agency will work directly with the supply chain industry for field-specific Intel and innovations for the sector, we can only hope that this is the beginning of bigger and better things for us as we move forward with the world.

 

AI and Warehouse Efficiency

These innovative technologies which hitherto were seen as future technology, are already developing at a swift rate, that more sectors are witnessing their introduction.

From the look of things, sooner than late AI could be completely transforming warehouse operations. These technologies are set to be a key component in the improvement of efficiency, profits, and targets.

The divisions of the warehouse that are going to be most impacted by the influx of AI include:

1. Productivity

In order to perform above and beyond quotas, businesses need to ensure that the productivity of their workforce is a vital aspect of their business strategy. AI has the ability to improve productivity in pick-and-pack warehouses with proven results.

2. Communication

Communication between workers is vital to the smooth running of day-to-day tasks. In order to achieve targets and ensure tasks are fulfilled successfully, workers and line managers need to have the ability to communicate with ease in a time-efficient manner. With the use of AI, such as robots used by online supermarket Ocado that can converse back-and-forth at a mesmerising 10 times a second, human inaccuracies are eliminated and profits have the potential to grow.

3. Warehouse Operations

Multiple operations in the warehousing and logistics industry are expected to become fully automated by 2030. 30% of UK warehousing jobs will become automated as AI becomes more integral. The operations with the highest risk of automation are predictable physical activities (81%), processing data (69%), and collecting data (64%).

4. Wages

It’s not just warehouse operations and running costs that could save money with the support of intelligent AI systems; money that would usually be spent on employee wages has the potential to be saved too.

5. Robots

Can you imagine a warehouse where staff could operate on just five minutes of sleep an hour? No lunch breaks, and no shift patterns? With the use of AI in warehouses, this is exactly the case. Robots, such as Amazon’s Kiva robots, can pick up goods and distribute them to different stations within the warehouse in mere minutes, and only need 5 minutes to charge every hour.

6. Inventory

Smart warehouses that use AI to their advantage will be able to spend money – that was previously spent on inventory expenses – on more productive business growth opportunities.

Although people have the fear that so many jobs will be lost, only 30% of jobs have the potential to become automated, employees are not expected to be fully replaced by robots. Automation will be integrated into current operations to be used as an aid; something to work alongside workers and help with routine tasks.

 

AUTOMATION IN NIGERIAN WAREHOUSE OPERATIONS

This has been highly limited due to the high cost of installations and so many other constraints in the business environment. Below are the efforts of some forward-looking organisations towards automating their warehouses and delivering excellent services to their customers?

  1. Skyway Aviation Handling Company Plc (SAHCO) serves as a major gateway to import and export in the Nigerian Aviation Sector, ensuring that cargo, courier, and mails are properly handled, managed, and warehoused in its custom bonded warehouse, pending the due process of clearing. SAHCOL operates a fully automated cargo warehouse, which ranks with the best anywhere in the world. Our Cargo handling service is famed for an impressive record of consistent efficiency, as tons of freight are handled daily, with operational ease.
  2. GMC Warehousing & Distribution: We run an automated warehouse facility that functions on a Logistics Automation, with operators that work and handle tasks from Storage to Retrievals & Conveyance. So you can rest assured that your packages will get to you at the right time and in the best conditions.
  3. NAHCO Aviance commissioned the biggest air cargo warehouse in sub-Sahara Africa. The Nigerian Aviation Handling Company (Nahco Aviance Plc) has said it will raise a ₦5 billion bond from the Capital market for the building of an automated warehouse at the Murtala Muhammed International Airport, Lagos.

NAHCO Aviance places a high premium on safety and security in line with international conventions and standards. Right from the aircraft through the bulk breaking to warehousing, cargo is maximally secured. NAHCO Aviance’s security operatives work 24/7 in concert with other security agencies at the airport to secure clients’ shipments and ensure hitch-free operations.

Our warehouses have acres of space and the ability to accommodate all sizes of cargo. Information on stacked cargo or any cargo entering the warehouse is controlled by our Galaxy system for easy tracking. We have special storage facilities to take care of perishables, dangerous goods or radio-active cargo and valuables.

 

REFERENCES

Ankur@kenresearch.com. (2019, October 18). Nigeria Warehousing Market is Expected to Cross USD 170 Million by 2023: Ken Research. Retrieved from https://www.openpr.com/news/1852298/nigeria-warehousing-market-is-expected-to-cross-usd-170-million

KuprenkoTechnical, V., & Kuprenko, C. V. (2020, January 7). Artificial Intelligence in the Logistics Industry. Retrieved from https://supplychainbeyond.com/artificial-intelligence-in-the-logistics-industry/

Sunol, H. (n.d.). Warehouse Technology: Artificial Intelligence (AI). Retrieved from https://articles.cyzerg.com/warehouse-technology-artificial-intelligence-ai

Adebowale, A. (2019, September 24). FG Has Concluded Plans to Establish an Artificial Intelligence and Robotics Agency in Nigeria. Retrieved from https://technext.ng/2019/09/24/fg-has-concluded-plans-to-establish-an-artificial-intelligence-and-robotics-agency-in-nigeria-minister-of-science-and-tech/



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