Integrating automation into the supply chain has been a hot topic of conversation in recent years — especially as businesses seek new solutions for streamlining processes, decreasing costs, and overcoming many challenges, like global supply chain disruptions. And at the center of that change: technology.
Just as Airbnb has transformed the hospitality landscape, and Lyft has done the same for personal transportation, automation has made a solid footprint across many areas of life. Now there are Amazon Go stores cropping up, sans checkout clerks, to revolutionize the consumer shopping experience.
Digitization and tech-related advancements can help expose inefficiencies and strengthen the entire supply chain. For the logistics industry, autonomous vehicles are just one of the many factors shaping the future capabilities of the space.
For example, autonomous trucks (ATs) can completely transform the cost structure and utilization of trucking and consumer goods. As McKinsey & Company shares, “65% of the nation’s consumable goods are trucked to market. With full autonomy, operating costs would decline by about 45%, saving the US for-hire trucking industry between $85 billion and $125 billion.”
These cost savings can potentially be redistributed in many ways: lowering the cost of goods, investing in the workforce, exploring new markets or technology, and more. To further examine the impact of adopting autonomous vehicles, let’s look at four ways technology can affect the logistics sector.
1. Curb Transportation & Shipping Costs
The implementation of autonomous vehicles could significantly decrease reliance on human involvement. For instance, businesses could reduce the safety hazards and labor costs associated with long-distance and overnight road travel. Autonomous trucking could potentially trim some overhead costs that stem from utilizing solely human drivers, like worker's compensation insurance.
A collaborative approach, which leverages both humans and autonomous vehicles, could reduce driving errors and on-the-road accidents. Additionally, autonomous trucking can curtail the inevitable disruption of halting operations while drivers rest and recharge. It’s all about making the most of resources.
Companies will also see their fuel usage improve as well. Why? Because ATs are equipped with smart technology to maintain ideal driving speeds and adjust routes to avoid traffic jams (read: costly delays). The ability to optimize routes will also lessen travel time and cut down on shipping costs.
As corporate responsibility expectations grow, businesses will need to adopt new policies and practices to bolster their sustainability efforts. Electric-based autonomous vehicles are one potential energy-efficient solution to minimize gas emissions. And let’s face it: eco-friendly practices yield a gamut of benefits — for the environment, society, employees, investors, consumers, and your organization’s bottom line.
2. Resolve Driver Shortage Challenges
The U.S. has been grappling with a shortage of truck drivers for years. According to the American Trucking Association, the driver deficit hit historic highs in 2021, with an estimated shortage of 80,000 drivers. If this trend continues, experts anticipate a shortage of more than 160,000 drivers by 2030. “Combined with the pandemic and the supply chain crisis,” Forbes reports, “the truck driver shortage is causing major bottleneck issues in delivery.”
In the face of this shortage, there’s a temptation to neglect safe driving practices for drivers, or overload trucks to satisfy consumer demand. Neither option is sustainable. But autonomous vehicles offer a potential solution for alleviating the driver shortage. Paired with other autonomous technology, like drones, this can also provide a positive last-mile delivery experience for consumers.
The shift to autonomous vehicles would open up new job opportunities as well. Instead of getting behind a wheel, workers can control and supervise these modes of transportation remotely – providing new ways for drivers to help businesses move products. Handling a fleet of autonomous vehicles from an office (or an at-home, remote environment) can potentially attract more individuals to the logistics space and bridge these crucial labor gaps.
3. Automating the Supply Chain
Autonomous vehicles are just one way that leaders are looking to drive efficiency and improve the supply chain via automation. As we move closer to autonomous trucking becoming a reality, congruent conversations are taking place around other automation technology, like machinery and logistics software, that can improve processes across the supply chain – inventory management, order fulfillment, picking and packing, and so on.
For instance, autonomous mobile robots (AMRs) can be used to help load and unload shipments. And they aren’t confined by human limitations. Working for 20+ hours without a break? No problem for a robot! Lifting heavy objects that expose workers to safety risks? Only an issue for humans. AMRs are one strategy to accelerate lead times and streamline otherwise labor-intensive tasks. And that empowers employees to focus their efforts on more high-level tasks.
Automated equipment could set in motion a truly 24/7 supply chain. Leaders will need to establish the ideal infrastructure and leverage the right technology to support this level of automation. Artificial intelligence, IoT devices, and cloud-based technology will all be instrumental in automating the supply chain. From maintaining continuity to capturing pivotal data, the right software — like a warehouse management system (WMS) — will ensure workflow is optimized and provide greater visibility across processes.
As the demand for fast delivery continues to grow, autonomous vehicles can give businesses a way to get consumers their orders as quickly as possible. As a result, leaders must adopt the right framework and ensure their supply chain management strategy is evolving to support these new technologies.
4. Warehouse and Fulfillment Operations
Autonomous vehicles will be a game-changer for warehouse and fulfillment operations. For instance, picking and shipping can be performed through the night, during shifts that are virtually impossible to staff. This will help accelerate the fulfillment process and enhance the customer experience, which is imperative for a brand’s reputation. The use of autonomous vehicles can also decrease per-unit costs, as they can turn inventory more quickly.
There are already warehouses that have begun integrating automation into their infrastructure, providing businesses with the opportunity to drive their operations to new heights. When autonomous trucks hit the road in the future, they’ll also need to implement AT-compatible docks and entrances to ensure seamless connections. Everything from proximity to highways to the layout of the warehouse will need to be considered to ensure automation streamlined at every level.
The Future of Supply Chain Is Autonomous
As innovation and technology continue to shape how businesses operate, leaders can tap into the power of automation to optimize the supply chain. From the point of sale through product delivery, there are already solutions companies can tap into to optimize fulfillment, inventory, and workflow – all while capturing real-time insights to drive visibility and process efficiency.
At Smart Warehousing, we always strive to stay at the forefront of technology. That’s why we are keeping a pulse on topics like autonomous trucking and how it can impact last-mile delivery or make LTL and FTL shipping more efficient.
Today, we utilize cutting-edge technology to automate and streamline the supply chain. From order fulfillment to inventory management and logistics, we deliver customized solutions to help businesses scale. Whether your goal is to identify new revenue opportunities, expand an existing product line, decrease costs, or gain a competitive advantage, we’ll provide you with the tools and expertise needed to help you move the needle forward on key business objectives.
To learn more about how Smart Warehousing can help your company reach new heights, contact our team today.