- 10 October 2018
- Written by: Supply Chain
- Category: Supply Chain
The Fourth Industrial Revolution consists of emerging technologies such as artificial intelligence, the Internet of Things (IoT), self-driving vehicles, renewable energy, and biotechnology to name a few. Those disruptive technologies have a great impact on the corporate world, mainly the Supply Chain.
According to a report by Frost & Sullivan, shipments of mobile robotics will rise from 4 million in 2012 to 25.4 million in 2020, with unit shipments of logistics-related robotics driving the expansion as they go up from 1,400 to 95,000 in the same time frame. Moreover, in a survey by logistics industry group MHI and Deloitte, 35% of respondents said they’d already adopted robotics into their supply chains, rising to 74% in the next six to 10 years.
It is certain that artificial intelligence and automation are bringing new levels of efficiency and better planning capabilities to the supply chain. Because of this explosion of new fields, new markets will emerge which will require a new set of skills for employment. Increasingly smart robots will take over some jobs, and jobs that didn’t exist before will be in-demand. But the question is: does this mean that machines will eventually replace humans?
AI and Robots will mainly take over repetitive and predictable roles
Automation is certainly being adopted in almost every sector of the economy. Based on a study by Information Services Group, 72% of enterprises would be using robotic process automation (RPA) by 2019 to reduce costs, improve productivity and increase compliance. Another research by Forrester also points out that robots and artificial intelligence will replace 12 million jobs in the United States by the year 2025.
We have already been witnessing robots replacing some unskilled jobs in distribution centres. Today, the increasing use of IoT and new software applications are reducing the need for some clerical and administrative roles as well. For instance: sensors, RFID tags, robots, cameras and smart solutions are reducing the need for manual inventory counts, and cloud-based solutions are eliminating the need for some accounting and order entry positions.
In fact, these changes are moving throughout the supply chain from distribution centers and offices to even retail floors. Let’s take for example Walmart which has cut 7,000 back-office accounting and invoicing positions at its U.S. stores in 2016. Besides, in January 2018, it announced cuts of 1,000 corporate jobs while indicating it would also boost efficiencies in stores with more cashier-replacing capabilities and shelf-scanning robots for inventory.
The Wall Street Journal recently reported that brands such as ‘Gap Inc. is using automated arms and artificial intelligence to sort the retailer’s clothing orders. Walmart Inc. is testing robots that roam store aisles to check inventory and tell workers where to find goods. And logistics providers are sending mobile step-stools mounted with shelves through fulfillment centers to help pull online orders for toys, apparel and Disney Corp. products.’
This explosion of new fields will lead to the emergence of new markets which will require a new set of skills for employment. Progressively smart robots will take over some jobs, and jobs that didn’t exist before will be in-demand. However, your workforce will still remain an asset.
Both machines and humans are essential in this modern era
Creativity is surely one of the skills that even AI is struggling to replicate, which is why it will be one of the skills a worker needs to succeed in the future. For example, Toyota has been doing things differently by replacing its robots with humans. This is because robots may be faster, but humans are capable of innovation and coming up with ideas that eventually result in improvement.
Machines and software solutions can also not automate relationships or human interaction when it comes to things like vendor negotiation, warehouse labor management, and handling complex, unique problems. Salespeople, human resource managers, customer service representatives, and systems engineers will still be required. Hence, modern solutions for supply chain training is a must; such as scenario-based video training, gamification, simulation etc.
A new book by Paul Daugherty and H. James Wilson exposes the prevalent misconception that AI systems will replace humans in one industry after another. There is no doubt that AI will be used to handle certain tasks, including higher-level decision making. However, the technology’s true power lies in boosting human capabilities, mainly in the supply chain. For instance: by collaborating in roles such as supply chain planning and inventory management, the combined power of humans and machines will create new sources of value for businesses.
The most effective automation will improve human performance
The interesting part is the collaboration of human and machine to achieve tasks creatively at a faster rate. Technology might take over many human-performed tasks but it won’t necessarily eradicate all positions. Data collection and processing will become more automated but humans will still drive many decisions. That is instead of a dozen clerks manually gathering data or taking inventory, a more automated warehouse may cut back to a team of a few to manage the technology, handle exceptions, and chose the best paths for optimization.
Combined with advanced analytics, AI will allow supply chain planners to make more forward-looking, strategic decisions and spend less time on reactive problem solving. Such approach will help to move away from a traditional supply chain operating model, which is inflexible and slow, to a new dynamic model. Hence, the importance of strong analytical skills will grow with the demand for human workers with a digital engineer’s skill set.
The use of robotics and other automation technology in industrial operations is growing but it doesn’t mean that manpower will no longer be needed. A good move would be investing in skills that will still be relevant even after 5 or 10 years from now to secure your spot in the workforce of tomorrow. Above all, what sets human apart from a machine of codes and algorithms is their creative ability to learn, innovate and create.