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Despite AI – the Supply Chain is Human

AI in supply chain blog image

Human connections are essential to the supply chain industry.

What is the Potential Impact of AI on Jobs? We Don’t Fully Know

recent survey by Microsoft reports that 49% of the people they surveyed worried about AI replacing their jobs. This study included data from 31 organizations around the world, surveyed over 30,000 people, and analyzed data from Microsoft 365 and LinkedIn. But what does this mean for people working within the supply chain?

The outlook is cautiously hopeful. The World Economic Forum expects new technologies will create a “net positive” on job growth within the next 5 years. What does this mean? Some jobs will be replaced, some jobs will be changed, or new jobs will be created. Experts are divided on the impact of AI and forecasting a wide range of numbers.

In 2018, the Harvard Business Review published, “The Death of Supply Chain Management” predicting, “Within 5-10 years, the supply chain function may be obsolete, replaced by a smoothly running, self-regulating utility that optimally manages end-to-end workflows and requires very little human intervention.”

In 2023, we have experts like MIT Professor Dr. Yossi Sheffi, Director of the MIT Center for Transportation and Logistics, speculating that the development of things like autonomous vehicles will require an infrastructure that will create more jobs.

What Does Automation/AI in the Supply Chain Look Like Now?

Supply chain professionals are finding a middle path between AI/automation and placing value on the human element and relationships. Not everything is automated and not everything is manual. In 2023, two thousand supply chain professionals were surveyed by MIH and Deloitte. Out of the surveyed group, at least 74% reported their companies increasing investments in innovative supply chain technology, with AI as a primary focus. While that percentage is large, there are practical complications in implementing some forms of AI technology.

For every Amazon Kiva system, there’s evidence of companies hastily implementing AI into their supply chain with mixed results. In 2021, researchers from the Open University of the Netherlands explored the use of collaborative robots or “cobots” across several different businesses including a logistics provider, a produce supplier, and an automotive manufacturer. The cumulative success of the cobots was mixed at best. Several factors that kept the adoption of cobots from being fully successful included, “resistance to change” from employees, a piecemeal rollout of training by the cobot suppliers, and a lack of cobot-friendly infrastructure. In some cases, the cobots created more work for human employees.

Don’t Forget About Self-Driving Cars

An area of supply chain/logistics that has seen growth is the development of autonomous vehicles aka self-driving cars. The implementation of a convoy of self-driving freight trucks, also known as platooning, is growing. These solutions might be a great solution to supply chain issues in cities where access to items like fresh produce and other goods is limited, but figuring out the infrastructure can be difficult.

Researchers in Japan found that a centralized facility in an ideal location and developing traffic rules for autonomous vehicles are two of the central concerns in implementing platooning. The truck or truck fleet’s route must be carefully considered, rerouting vehicles to form a platoon can waste time and labor.

As a result, some platoons do not go for the shortest route – A to B – but will go for a route that cuts costs in other areas such as fuel and labor.

Despite being “self-driving,” truck platoons require human monitoring and maintenance. While there may be automation powering the platoon, there is human operator monitoring of the vehicle’s progress. There are also safety engineers and technical analysts who must plan for the same technical difficulties a human-driven truck faces – from a flat tire to inclement weather.

What’s Next?

Automation and machine learning have been around for a while, but we’re seeing new forms of AI (ChatGPT and the line) scale quickly. In the Microsoft survey mentioned at the beginning of this article, more than 70% of respondents are comfortable offloading small administrative tasks to AI (even people who may be nervous about AI). Despite this rapid growth, there are still major areas where people are not quick to trust AI.

Instead of moving to either completely or rejecting AI, supply chain professionals are finding a middle path by practically combining the technical capabilities of AI/automation with the human element/relationships that are at the heart of supply chain/logistics – creating essential connections with each other.