Well, that’s another Christmas over! No doubt the UK media is now full of stories about how it was the best/worst trading Christmas period ever, and predicting what this means for the retail industry (certain doom for the high street or an end to the online boom perhaps). Meanwhile, customer service and supply chain management staff are heaving a collective sigh of relief because it is over for another year and for that they are grateful.
Executive thoughts are now turning to ‘what could have made a difference in our supply chain performance? How could we have better served our customers, not run out of stock, delivered more items on-time in full….?’
We’re willing to bet that an investment in Artificial Intelligence could solve a lot of it.
To the layperson, A.I. often conjures up pictures of an android or humanoid robot, helping in the kitchen or doing the cleaning and so on, but if we use the definition of artificial Intelligence, as supplied by the Oxford Dictionaries, English, 2018, we get:
The theory and development of computer systems able to perform tasks normally requiring human intelligence, such as visual perception, speech recognition, decision-making, and translation between languages.
Siri, Google assistant, Bixby and Alexa – to name but four – are examples of Artificial Intelligence on our phones or linked to our phones, which can schedule appointments, give reminders, keep lists, play music, give weather forecasts, order from websites, and update us on the news. With the development of wi-fi smart home systems, you can now use your phone to set the heating, turn off the lights, set the oven and far more. Using voice activation, mobile data and blue tooth, cars can carry out a google search, it can phone a friend and send a text. We may not be able to ‘see’ our domestic assistants, but they are already here.
Another ground-breaking concept:
“Data is the new oil” Shivon Zilis, a partner with the venture capital firm Bloomberg Beta, said about data’s increasing value.” (Vanian, 2016).
Expounding upon the comment, (Satell, 2016) stated that “much like oil, data is largely useless without effective machinery to transform it into something of value”. That machinery is Artificial Intelligence.
Real World Applications
In the realm of production, packaging and despatch, automated production lines are becoming ever more advanced and reliable for repetitive tasks, especially where RFID (radio frequency identification) is being used to trace finished goods or raw materials from end to end of the warehouse, or even, from source to shop. Automated distribution centres are a thing of quite extraordinary technical beauty when they run smoothly; granted when the system breaks down, nothing comes close to the mess it creates, but even there, the safeguards against breakdown are becoming more advanced.
Driverless or A.I. assisted vehicles are becoming more mainstream; certainly, many premium car brands on the roads today can park themselves, if not take responsibility for the whole journey, and cruise controls are becoming more commonly available to assist in fuel efficiency and smoother driving techniques. Pilots have had autopilot for years – it’s not such a new concept after all. The logistics industry has long suffered an issue with a shortage of HGV drivers, and those drivers they have will always be at some level of risk of human error in judgement or health. Perhaps the way forward is to have no drivers at all? It is not an unimaginable future.
Routing systems are increasingly becoming faster, better, and more able to report in real time – aside from the industrial packages for fleet management, we have the freely available google maps which can talk you through your directions, re-route in the event of a hold up in traffic, and divert you via a local ‘point of interest’ – it will even tell you where to park. You can share the progress of your journey with selected participants, and you get almost perfect calculations of estimated time of arrival.
Many courier firms now offer apps on which you get reports tracing goods deliveries – “your driver is four stops away…” Even local taxi firms, together with their equally small local counterparts, have invested in technology. To compete against Uber, they now offer as standard a live dots-on-map representation of where the driver is, and we can pay by credit card. All of this is giving rise to ‘Crowd Shipping’ – a new concept of final mile delivery done by individuals instead of courier firms. It is a way of tackling the traditional difficulties of road haulage and making it more agile, smaller, neater, and more suited to city centres or demanding customers who want it delivered yesterday, but at no extra cost.
Ongoing Development
The ongoing development of A.I. is really quite extraordinary. For example, at many online or omni channel retailers you can order items today that arrive same day or next day, or can be collected almost immediately, and the systems that enable this in such short lead times are unparalleled when you consider how much effort it used to take to program a BBC computer to draw a line of asterisks. That item(s) has to be located, picked, packaged, labelled, dispatched, and then it has to physically make the journey. All in an afternoon in some cases!
One of the biggest growth areas for the application of A.I. is retail: the online vs physical retailers can come together exquisitely through clever use of website analytics if the brand is prepared to invest enough in the technology to do so.
Imagine if you could use A.I. to forecast every single consumer’s demand in every single store/market across the globe. What if you could see what grocery items were commonly purchased and add them to a ‘favourites’ list by tying up the items purchased with the customer’s credit card, to speed up their next visit by giving them a shopping list? Imagine if you tracked their interest in certain clothes or certain footwear or saw they had visited your website and had wandered off in their browser windows without completing a purchase?
Not only can retailers now capture what was actually purchased, they can capture the lost sales – the sales that [almost] didn’t happen or even the sale of Y that replaced X given it was out of stock. What if you could use all of this to forecast future demand?
That time is now, with the right investment in technology.
Is there a downside?
As computer processing capability gets faster and more advanced, this ‘new oil’, data, can be more deeply exploited to reveal far more than perhaps the users would like. However, it is open to being abused – it can become intrusive; like being ‘stalked’; A sad story published online by BBC News, 2018, showed how a woman who had excitedly posted Facebook status updates about her pregnancy and due date, was then devastated by the subsequent still birth of the child and ongoing Facebook adverts about goods relating to a birth despite her attempts to stop them. A heartbreakingly brutal misuse of data. To quote Uncle Ben in the 2002 movie Spiderman: “With great power comes great responsibility”. Never was this truer, than in this digital world where the internet of things stores so much information, perpetuates urban legends, and, according to at least one world leader, “delivers fake news”.
Humans and AI
As individuals we supply this data. Willingly or sometimes unknowingly, it streams almost 24/7 from our phones or tablets or computers to the internet via cookies with every tap of our keys or swipe of our screens. All the corporations have to do is capture it, analyse it, and apply it.
Anyone who is familiar with the works of the late, great Douglas Adams will be aware of the computer “Earth” commissioned by a ‘pan-dimensional, hyper-intelligent species of being’, in that legendary story ‘The Hitch Hiker’s Guide to the Galaxy’. (Adams, 1986). ‘Deep Thought’, a computer that was created by humans as part of the wider algorithm, was intended to calculate “the Answer to The Ultimate Question of Life, the Universe, and Everything”; the answer, as you may be aware, is 42. However, it was quickly realised that they needed to come up with the actual question itself, so that the answer would make more sense. The Uber-super computer, Earth, was subsequently designed and built by Deep Thought, to carry out this epic task.
In his fantastic and eerily predictive story, every being on Earth played a part in the calculations that ran over four and a half billion years, by being a live real-time program of analysis and interpretation of data. At a very real level, we ourselves are becoming an intrinsic part of Artificial Intelligence’ computations – maybe Adams wasn’t so far off after all.
Another application of our cookies is a new concept whereby windows can play adverts or displays specifically geared towards a person stood in front of them.
Omer Golan in an interview published in (Emarketer.com, 2018) is quoted as saying:
We create video displays in storefronts that give consumers interactive experiences, and we use machine learning and computer vision to understand everything we can about what happens in front of the displays—who is there, what they’re looking for, how they behave, how they respond and how they engage with the content. We leverage many different types of data to do this. And we do this in real time, so retailers are able to personalize the content. Consumers can also buy the product they see, so as a result, a window advertisement becomes another ecommerce platform.
In conclusion
How was your Christmas accomplished (if indeed you celebrate it)? Like many others no doubt, countless householders – parents, friends, and relations – spent the year between 27th December 2017 and circa 24th December 2018 making subliminal observations, or remembering conversations, about what A, B and C might like for Christmas. Thanks to the wonder of the cookies on the internet or we found where we could buy said gift, wrapped it and delivered it, sometimes with extraordinary cunning and stealth.
This year, like most years, pretty much everyone who participated will have got at least one thing which is almost exactly what they wanted – and sometimes, a perfect something they didn’t even know they needed.
En Masse, we forecast, made/sourced, and delivered hand-selected gifts. In the background, innumerable algorithms and programs watched us and listened and recorded us, so the wheel that is the global supply chain turned and turned and turned again. It is extraordinary.
A collective consciousness aided and abetted by our computers and the systems of the manufacturers/producers/retailers, using (at some point surely) robots and perhaps driverless vehicles or drones, ensuring that everyone has something perfect delivered on time and in full, all thanks in no small part, to Artificial Intelligence.
Is the future of Artificial Intelligence dystopian or utopian? Only time will tell, but precious few businesses can afford NOT to be a part of it, because Artificial Intelligence is defining the Now, recording History, and predicting what is to come.
Contact us now to see how your business can benefit from Artificial Intelligence as it gains momentum in the Supply Chain and Logistics industry. As Supply Chain Consultants, we can best advise how AI can revolutionise supply chain management.
References
Adams, D. (1986). The hitchhiker’s guide to the galaxy. London: Heinemann, p.129.
BBC News. (2018). ‘Facebook baby ads taunted me after stillbirth’. [online] Available at: https://www.bbc.co.uk/news/av/uk-45901514/facebook-baby-ads-taunted-me-after-stillbirth [Accessed 18 Oct. 2018].
Emarketer.com. (2018). How Artificial Intelligence Can Transform the Digital Out-of-Home Marketplace – eMarketer. [online] Available at: https://www.emarketer.com/Article/How-Artificial-Intelligence-Transform-Digital-Out-of-Home-Marketplace/1016866 [Accessed 20 Dec. 2018].
Satell, G. (2016). 4 Ways Every Business Needs To Use Artificial Intelligence. [online] Forbes.com. Available at: https://www.forbes.com/sites/gregsatell/2016/09/18/4-ways-every-business-needs-to-use-artificial-intelligence/#2910600211e0 [Accessed 18 Sep. 2016].
Vanian, J. (2016). http://fortune.com. [online] Fortune. Available at: http://fortune.com/2016/07/11/data-oil-brainstorm-tech/ [Accessed 12 Jul. 2016].
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