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Build Streamlined Logistics with Route Optimization Algorithms

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3pls, Global Logistics, Global Trade Daily

Build Streamlined Logistics with Route Optimization Algorithms

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Today’s fleet owners and other logistics professionals seek practical solutions to boost competitiveness and cut unnecessary costs. Many are beginning to explore route optimization algorithms as the answer to their problems.

What Is Route Optimization?

Route optimization assesses numerous factors to find the most cost-efficient ways to make all deliveries. Field technicians, home care assistants, and sales professionals who visit customers at their homes or businesses are some examples of people outside logistics who benefit from route optimization.

How Does Route Optimization Work?

A well-optimized route is not necessarily the shortest one. Planners must consider things such as:

  • Drivers’ hours and break requirements
  • The number of parcels to deliver
  • Areas of heavy traffic or road construction
  • Access methods and related challenges
  • The number of drivers working at a given time

Dispatchers and other specialists crunch all the available data — often using advanced route optimization algorithms — evaluating it when deciding which vehicles and drivers should handle a particular day’s needs. The algorithms process the information and make tailored recommendations. They can also propose changes based on developing conditions, such as traffic backups or severe wrecks.

Drivers usually must continually interact with route optimization tools throughout the day. However, the engagement is generally minor. For example, they might tap a button in an app to indicate when they’ve delivered each parcel, are on a scheduled break or must go off the clock to deal with an unforeseen situation. Those inputs give the algorithms real-time feedback to update people’s routes as necessary.

What Are the Benefits of Route Optimization?

One of the biggest advantages of route optimization algorithms is better productivity. Drivers can make the most of their time because there’s usually no need to make spur-of-the-moment decisions. Instead, they can periodically check dash-mounted smartphones or tablets, and follow the instructions there.

These algorithms also help fleet organizations save time because vehicles are moving for larger percentages of time instead of being stuck in traffic. Since they usually work constantly in the background, these algorithms continuously update routes according to conditions in the driver’s area. Many also make suggestions based on historical data, combining that information with what’s happening in real time.

They enable better decision-making capabilities for the dispatchers, managers and others overseeing the routes, too. Even the most experienced and detail-oriented professionals likely can’t process as much information as quickly as today’s algorithms. Technologies are like people in that they can both make mistakes. However, combining humans and advanced technologies is typically very powerful, especially when applied to dynamic situations.

Customers also benefit from route optimization algorithms when they receive more accurate information about when parcels will arrive. They appreciate that convenience, particularly when they’re about to receive an expensive, signature-required, or long-awaited delivery and can’t feasibly wait at home all day for it to come.

People often receive emails specifying one- or two-hour windows during which their parcels should show up at their doors. However, route optimization algorithms can do even more by supporting real-time tracking.

Making the Most of Route Optimization Algorithms

People interested in using algorithms for route planning should start by thinking about the challenges they most want to overcome. Another way to analyze the present situation is for fleet owners and other leaders to consider how algorithms could help them succeed in the future.

In one example, a leading less-than-truckload brand used algorithms as part of a digital transformation strategy. An executive said this application allows the firm to increase flexibility and manage line-haul costs during market fluctuations. Additionally, decision-making within the business has improved.

Once leaders identify how route algorithms could address their current and future needs, they should begin exploring which software vendors best suit their budget, size and other specific factors. After creating a shortlist of possible enterprises, people should develop questions for sales representatives, anticipating that the answers will help them make the best decisions about which products to purchase.

Many decision-makers are already using advanced technologies for reasons other than route optimization, such as to help them determine when to do maintenance. That’s important because the timing depends on driving conditions.

For example, air filters prevent contaminants from damaging vehicles’ engines. Replacements of said filter can occur about every 20,000 miles for trucks experiencing average dirt and pollution levels. However, those driving on dusty roads and in more polluted areas need changes sooner. Some fleet owners use sensors and algorithms to learn precisely when to do maintenance on specific vehicles.

Anyone already depending on algorithms in other parts of their businesses should confirm whether their route planning tools will integrate smoothly with the other technologies. There’s a good chance they will, especially as many fleet owners gradually increase their reliance on algorithms in their operations.

Route Optimization Algorithms Support a Greener Future

Many leaders begin using route optimization algorithms after recognizing doing so will save them time and money. However, people may also notice such technologies align with their sustainability strategies.

In a broad sense, these algorithms can reduce idle time, improve fuel efficiency and significantly reduce failed delivery attempts. These benefits combine to minimize individual vehicle emissions. However, route optimization algorithms can also make entire organizations more sustainable.

Such was the case with a trucking company established in 1934. An executive said he and his fellow leaders were immediately excited about the efficiency gains they could achieve by adding the algorithms to an 80-vehicle fleet. However, the results of a trial revealed some unexpected benefits.

More specifically, after bringing the algorithms into its workflow, the brand had a 15% reduction in mileage and emissions. When executives from such firms can show how route optimization algorithms support a shrinking carbon footprint, eco-minded consumers will be more likely to give them their business for the long term.

The leaders of brands in this position can also use the algorithms to prove their actions to regulators and other authorities requiring the progressive reductions of emissions and the prioritization of greener practices. Demonstrating gradual progress in this area could help logistics providers avoid fines and confirm their sustainability commitments.

Route Optimization Is Worthwhile 

Logistics is a fast-paced and high-demand industry. Algorithms help enterprises save time and make deliveries more strategically. Regardless of a leader’s fleet size or goals, they should strongly consider investigating how these technological tools can help.

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Global Logistics, Global Trade Daily, Uncategorized

Mastering the Art of Navigating Global Trade Agreements in Logistics

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International trade agreements — sometimes called free trade agreements — play essential roles in facilitating global commerce. They enable cooperation between facilitating nations by reducing or eliminating otherwise burdensome factors such as tariffs and duties. How well do they work, and what should logistics professionals know about them? 

Understand the Primary Types of International Trade Agreements

Countries participating in international trade agreements typically abide by one of three types.

The first is unilateral agreements. These are one-sided arrangements granted by developed countries to developing ones. Then, the latter nations enjoy numerous advantages, such as export activity expansion and the associated economic growth accompanying it. 

Then, there are bilateral agreements. These mutually benefit the two participating countries, providing the nations with numerous advantages of economic cooperation. 

Multilateral agreements are the final primary category. In these cases, three or more countries arrange to ease and promote trade between all participating nations. 

All logistics professionals should familiarize themselves with the agreements in force within the nations where they typically operate or plan to soon. That way, they can understand all the particulars and use that knowledge to avoid the pitfalls that could otherwise disrupt their businesses, productivity levels and budgets. 

Know the Subcategories of These Agreements 

Besides these three main categories, international trade agreements sometimes fall into several subcategories. For example, regional trade agreements occur between at least two regions, affecting the associated economic activity related to goods and services. Additionally, the nations can determine that regional trade agreements will create free trade or preferential trade areas, a customs union, an economic union or a common market.

Then, bilateral investment treaties allow the investing nation to receive the either national or most-favored-nation treatment in the other country, whichever is the superior classification — whichever is the superior classification. Then, the participating nation treats the investing one the same way as its domestic investors or provides treatment equal to other foreign countries with similar attributes to the investor. 

The World Trade Organisation also has agreements. They’re legal frameworks for international trade in 164 countries, providing extensive coverage of trade-related matters. Many government leaders use WTO agreements as templates to improve trade in their respective nations.

Some international trade agreements help nations affected by curbing unwanted trade behavior. For example, suspension agreements occur when foreign governments commit to changing trading behavior to stop dumping. 

Products affected by dumping get sold in importing countries for much less than their market prices in the exporting nations. These arrangements promote domestic growth in nations benefiting from them because those countries can trade without competing with foreign locations. 

Finally, intellectual property agreements allow a product’s creator to retain the respective patent, copyright or trademark while permitting all benefiting nations to use some or all of those IP rights for a fee. These agreements received worldwide attention during the COVID-19 pandemic as people investigated the best ways to get more vaccines in developing countries by boosting domestic production in those nations. 

Staying abreast of these subcategories and knowing how they affect trade in places where logistics professionals do business will help those parties maximize their efforts and reduce friction. 

Confirm How Newer Developments Will Affect Global Trade 

Many people can buy products located across the country and receive them in a few days. Thanks to expedited postal service options, customers also experience such speed when ordering products from abroad. A package’s size and weight may affect the total shipping costs paid by a seller or the receiving customer. However, international developments can simultaneously affect trade and customers’ experiences. 

A good example happened in Ireland after Brexit. Since that country is part of the European Union, Irish customers can order from e-commerce sites located in any other European country and not pay customs charges on the delivered items. Once Brexit the United Kingdom left the European Union, many Irish customers got unpleasant surprises when ordering from merchants in the region. Northern Ireland is part of the United Kingdom, but the Republic of Ireland is not. 

However, some counties in the Republic are minutes away from the Northern Irish border. A person could easily cross through parts of Northern Ireland and go back to the Republic again several times within five minutes of driving time, never seeing a physical border. The sole visible sign is that the Republic’s road signs’s show distances as kilometers, while Northern Ireland uses miles. 

After Brexit, Irish customers ordering products from the North or elsewhere in the United Kingdom received customs charges to pay before the postal service or any courier would deliver their items. Merchants also struggled during this transition, often failing to provide the correct and complete documentation that allowed parcels to clear customs quickly. 

Logistics professionals are in excellent positions to educate their customers about developments impacting trade. Offering the details in easy-to-understand language will encourage people to see their chosen logistics providers as authoritative partners. 

Take Inspiration From Global Brands

Another practical way to operate in a world defined by numerous international trade agreements is to see what global brands have done and which strategies were most successful. Making progress may require cooperating with stakeholders and working toward mutual goals. When leaders at footwear brand Nike wanted to expand the global supply chain, the first had to overcome a bad reputation developed due to allegations of unethical labor practices. 

The decision-makers developed a multipronged approach to create fairer working conditions and reduce the environmental impacts of worldwide production. One of the goals was to create an incentive program that supported and urged suppliers to adopt greener operations. 

Additionally, Nike executives engaged with stakeholders to discuss innovations intended to cause systemic changes. Those leaders knew doing anything at a surface level would be insufficient to bring the desired outcomes. 

The logistics professionals working with today’s top brands must have in-depth knowledge of international trade agreements. The most popular modern companies receive and send shipments from and to all over the world. 

A thorough understanding of the respective trade agreements supports their success. That’s especially true when brands with global footprints move into new countries, or their supply chain professionals create agreements with more suppliers in different nations than where procurement formerly occurred.

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Global Logistics, Global Trade Daily

What Drives the Evolution of IoT in Fleet Management Today?

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The Internet of Things (IoT) has thoroughly disrupted the logistics industry. Many fleets have already adopted and seen promising results from connected technologies, but this transformation is far from over. The use of the IoT in fleet management is still evolving.

Despite rapid growth in a relatively short time, IoT fleet management technologies are still in their infancy. As they mature and related innovations advance, so will the benefits, uses and concerns around tech-driven fleet management.

Predictive Maintenance

The biggest drivers of IoT adoption in fleet management today will continue to grow. Predictive maintenance is the perfect example.

Some fleets have saved as much as $1 million in just four months after implementing IoT-driven predictive maintenance practices. Across the board, adopters of this technology typically see 25% reductions in unscheduled downtime and savings of $2,000 per vehicle annually. With ROIs that high, this IoT use case will likely be around for a while.

As more organizations catch on to these benefits, predictive maintenance will become less of a competitive advantage and more of an industry standard. Those savings are impossible to ignore and will only become more enticing as IoT sensors improve. With significant savings achievable today, this use case will lay the foundation for future IoT applications.

Driver Monitoring

Many fleet managers have also discovered IoT technologies provide an ideal tool for driver monitoring. After years of frequent disruptions, logistics companies can’t afford preventable delays or costs. That means cutting down on unsafe driving behaviors and the IoT provides the means to do so.

On top of tracking truck maintenance factors, IoT sensors can also detect noncompliance with some safety policies. These include seatbelt use, speeding, harsh braking or driving for extended periods without breaks. Real-time insight into these practices helps enforce safe driving protocols.

This IoT application can help fleets prevent accidents and avoid tickets to ensure safe, efficient, and cost-effective transport. It’s also an easy jump for companies already using telematics systems for maintenance or insurance reasons.

Sustainability

As the IoT in fleet management grows, it’ll also see a shift towards sustainability. Supply chains already face increasing pressure to go green, but that’s hard to balance with simultaneous demands for efficiency. Packing more on one vehicle to run fewer trips could reduce emissions and save time, but with some roof racks holding up to 1,000 pounds, those trucks will burn more gas per mile.

IoT-driven insights help balance these complex considerations. Data from routes and real-time insight into vehicle emissions provide the information fleets need to find the ideal middle ground between fuel efficiency and throughput. More efficient routing would address both sides.

The IoT can also improve sustainability by enabling more efficient maintenance practices. As electric trucks become more common, IoT connectivity could help drivers find nearby chargers to plan routes around these stops. Those benefits will become more enticing as green initiatives grow.

5G Connectivity

Specific applications aren’t the only parts of IoT fleet management evolving today. Improvements and expansion in complementary technologies will spur further IoT adoption in the sector. 5G connectivity is one of the most prominent examples.

While many fleets recognize the IoT’s benefits, implementing it can be tricky. All the data these systems create needs a reliable platform to support it going back and forth between devices. Many existing network technologies fall short, but 5G promises the speed, latency and bandwidth necessary for large-scale IoT adoption.

Technologists have made big promises about 5G’s potential for some time, but these networks are finally becoming widespread enough to deliver on that potential. Consequently, logistics companies should expect IoT adoption within the industry to grow in size and complexity now that they have the necessary network infrastructure to support it.

Edge Computing

As 5G promotes faster IoT data transmission, edge computing will push fleet management technology further. The edge refers to splitting computing tasks between nearby devices. It lets relatively simple, low-power gadgets perform impressive work and enables faster data-driven actions. However, it requires fast and highly reliable networks.

Those networks are now here, thanks to 5G. Improvements in IoT device functionality make edge computing even more practical. As these trends continue, they’ll take IoT applications in fleet management to new heights.

Edge computing will enable almost instantaneous analysis of vehicle data. That means faster maintenance alerts, immediate safety warnings about emerging traffic concerns and even opening the door to more reliable driverless functions.

Autonomous Driving

That last benefit of edge computing will undoubtedly drive IoT fleet management’s evolution in the future. Autonomous trucks aren’t a reality yet, but IoT connectivity and edge computing are keys to enabling them.

Driverless vehicles need extensive real-time data to navigate and recognize obstacles safely. A larger network of IoT sensors provides this capability. They also need to analyze and act on that data in an instant — edge computing enables those processing speeds.

Fleet managers can capitalize on the benefits of autonomous driving features before fully self-driving trucks become a reality, too. High-level driverless features reduce fatal traffic accidents by letting human drivers rest more, even if they sometimes need to take the wheel. Features like this could also attract less experienced or younger, tech-savvy employees, addressing the ongoing trucker shortage.

Cybersecurity Concerns

Of course, the negative side effects of IoT fleet management will push further evolution in this field, too. Most notably, increased IoT adoption will bring IoT-related security concerns into the spotlight.

Transportation is among the top 10 most-attacked industries and IoT vulnerabilities account for much of this cybercrime. For all their benefits, IoT systems are notoriously difficult to secure, thanks to their interconnected nature and typically weak built-in protections. Evolving IoT usage will put more emphasis on these risks, driving a focus on cybersecurity for future IoT fleet management initiatives.

While the cause behind this shift is bad, the change itself is ultimately good. The logistics sector will take cybercrime more seriously and, hopefully, adopt better security practices, such as data encryption, multi-factor authentication and real-time monitoring. Fleets may also become choosier about the kinds of IoT devices they use, looking for those with better built-in security.

The IoT in Fleet Management Is Evolving

Including the IoT in fleet management has already changed the game for many logistics companies. As this technology grows and related trends evolve, the extent and way this sector uses the IoT will likewise shift.

Getting ahead of these trends will help fleets get more out of their tech adoption. Evolving IoT usage may be tricky to navigate, but adapting alongside these considerations could be key to remaining competitive.

reusable packaging
Global Logistics, Global Trade Daily

How to Make Reusable Packaging Scalable for Better Sustainability

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Manufacturers, supply chain workers and the packaging industry must collaborate to make reusable packaging scalable for a greener planet. Single-use containers should have never become the norm, as the byproducts litter landfills, oceans and communities. Reusable packaging at scale is possible with commitment, overcoming financial fears, and understanding its long-term benefits and eco-conscious impact. 

These imperative suggestions will guide every sector to ethical packaging to reduce greenhouse gas emissions.

Recognize Price Is Not the Issue

Many manufacturers refuse to transition to more ethical packing materials because of costs. Industries have created a narrative that reusable packaging is more expensive, but this is not true, even with a rise in overall demand and consumerism. Single-use packaging makers know they can upcharge their products because of heightened demand, making prices competitive. 

Manufacturers have never challenged their mental associations with single-use options and cost-effectiveness because single-use has historically trended cheaper. Now is the time to reevaluate. The cost of materials has risen 23% in two years. Compounding that with the energy and labor costs of making it usable for clients marks it up even more to a staggering 80% spike. 

By 2024, reusable alternatives will be cheaper than single-use when considering the big picture.

Outside of internal costs are recycling and disposal charges called eco-taxes. Concepts like carbon taxes and extended producer responsibility add millions more to budgets to account for wanton waste disposal. Manufacturers and packing companies avoid these fees with reusable packaging at scale.

Abate Hygienic Concerns

Public concerns over the cleanliness of reusable packaging are a primary deterrent to consumer buy-in. Around 38% of customers say reusable products need to be cleaner. These feelings are leftover from events like the COVID-19 pandemic, which prevented reusable packaging in places where it had become ubiquitous, like coffee shops. 

Companies must tackle this issue, not consumers. It is a scaling concern because the more confident customers become about the safety and cleanliness of products, the faster supply chains rewrite assumptions about sustainable packaging. Eliminating fear increases profits, making eco-conscious options even more inexpensive. These are a few routes manufacturers can take to ease concerns:

  • Offering sanitation stations in bulk stores for consumers and staff
  • Publishing footage on in-house cleaning processes throughout the supply chain
  • Posting educational resources for customers on how to detect unclean or defective reusable packaging and how to clean their own 

Lobby for Legislation

Regulations unfold at the speed of sound when corporations make their voices heard. If all manufacturers gathered together to tell their national governments how much of a priority reusable packaging was, meaningful collaborations and conversations would manifest in trying to make that happen. It would become a forced priority instead of a voluntary one. 

Reusable packaging does not scale well right now due to a failure in commitment. Many companies run trials or tests for research purposes to see how well circular packaging performs. Enterprises see the data, obtain the press for embracing environmental, social and governance goals, and continue business as usual. Higher customer engagement must motivate continued efforts instead of representing a temporary boon in publicity. Trials should continue. Supply chains must see it as the first step to commercial adoption.

Further testing allows corporations to hone in on the key performance indicators that match their ESG and corporate social responsibility objectives. Businesses must make testing reusable packaging an even higher priority if results are not as expected or wanted from a single trial run. Companies should experiment until they find the hidden value potential behind a reusable packaging model.

Optimize Reusable Packaging for Shipping

Many reusable packages are heading to pallets, into trucks and across nations to customers. Transporting it and what is inside might be the most expensive part of the process. It does not have to be if companies optimize the containers for efficient shipping, making it easier to scale in even the most considerable quantities.

For example, creating a bottle with a square base allows more to fit in a box or truck while minimizing the negative space circular versions would create.

Reinforcing packaging during transport is another way to save costs. Workforces will mark less inventory as waste if fewer units are damaged from shipping vibrations and collisions and collisions in transit. Reusable packaging creates sustainable reinforcement solutions that solidify financial foundations while improving the product’s scalability.

Create Refills Without a Need for Packaging

Developing infrastructure to return materials is the ideal setup for most supply chains. Corporations could have local kiosks, drop-off points, pickup services or other solutions to reclaim materials consumers purchased. Supply chains and manufacturers would then clean, recycle and repurpose the same packaging materials for new products. It requires choosing infinitely recyclable materials like glass or using more creative alternatives. 

For example, compostable packing peanuts can stay with customers for their piles or go back to providers to nourish the lands they use for sustainable lumber for paper and wood-related packaging products.

A take-back system is ideal, but plenty of reusable packaging models exist. Cleaning company Blueland and supplement business Mushroom Design sell glass containers for their products only once. Customers purchase refills and concentrates with less or no packaging to place back into the glass containers. People may buy refills online or supply chains can partner with grocery stores or other local programs to create waystations for topping off products without unnecessary shipping costs and packaging.

These structures make reusable packaging at scale simpler. It reduces packaging costs because more products do not have it. Additionally, providing refill points for consumers is infinitely scalable, reducing the obstacle of convenience customers associate with reusable packaging.

Reusable Packaging at Scale Is a Reality Now

These are the best ways for manufacturers to make a difference in sustainable packaging. Modern research shows how cost-effective it is to consider the planet first and profits second. In the next few years, sustainable packaging will be an avenue for scaled growth and more resilient bottom lines. The transition garners brand loyalty and the likelihood of locking customers in for the long term. 

The only action manufacturers must take is to be transparent about their reusable packaging decisions and advocate for standardization to make it a global norm.

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Global Logistics, Global Trade Daily, Trucking

4 Missteps to Avoid When Implementing AI in Truck Cabs

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Artificial intelligence (AI) is rapidly affecting numerous industries, and many people are eager to see how it could improve their businesses and workflows. Applying this technology could help fleet owners manage routes and prioritize safety, but these decision-makers must be aware of common mistakes when using AI in trucking. 

1. Failing to Hear Drivers’ Concerns 

The trucking industry attracts many people who appreciate their independence and want to make a living outside the confines of a typical office job with near-constant oversight from bosses. Understanding that initial appeal makes it easy to understand why some drivers don’t like the idea of AI in trucking applications. 

Some people with extensive experience in and knowledge of the logistics industry say many drivers see the change as an insult to the self-understanding and road knowledge they build up over years in their roles. Upset drivers may view high-tech, in-cab systems as tools to erase their livelihood rather than supplement it. 

Any successful plans to rely on AI in trucking must recognize the real-world insights and skills drivers bring to their work. In-depth, respectful conversations with concerned drivers about what artificial intelligence can and cannot do should anyone who’s hesitant feel more open about the positive sides of implementing the technology.

Artificial intelligence excels at processing vast amounts of data, and many algorithms improve with use. Even the most aware drivers can’t feasibly notice everything happening in their environments. However, AI could fill the gaps, helping them feel well-equipped for anything. 

2. Putting Too Much Trust in a Solution 

AI gets a lot of hype, but there’s some well-deserved positive feedback mixed into it all. For example, one study of AI dashcams found a commercially available solution could notify drivers in 86% of cases involving potentially dangerous behind-the-wheel behaviors. The hazardous actions ranged from having cell phones in their laps to following other vehicles too closely. 

However, as it becomes more common to see AI in trucking industry applications, interested persons must remember that no technology is perfect, and some products may misinterpret situations. One driver for a major e-commerce brand said his company used in-cab technology to determine bonus eligibility. However, he described numerous occasions where the product incorrectly attributed safety aspects to him that were beyond his control. 

For example, the technology gave him an audible reminder to keep a safe distance when the issue was that other cars cut him off — which happened frequently along his routes. He found it discouraging to get that feedback after doing nothing wrong, especially since it made it more challenging to receive safe-driving incentives. Other drivers echoed his account, with many saying employers refused to let them contest what the technology concluded about their performance. 

Anyone considering installing AI technology in truck cabs must realize that even the most advanced technologies won’t pick up everything, and some may give the wrong impressions. Refusing to meet with drivers who feel unhappy about how an in-cab product perceives them will quickly erode morale and may cause workers to look for positions elsewhere. 

3. Reserving Too Many Resources for AI in Trucking

Some logistics industry leaders become fixated on artificial intelligence solutions for truck cabs, spending too much time and resources on those products while overlooking other necessities. The outcomes of such mindsets could overshadow many of the safety and efficiency benefits artificial intelligence can provide. 

For example, worn tires can reduce fuel efficiency by up to 3%, highlighting the importance of tire tread monitoring. People should assess their company’s circumstances to see what percentage of their budget they can put toward AI without sacrificing the other essentials of running a trucking business. 

Investments in artificial intelligence or other emerging technologies only make sense if the company can afford them without excessive financial strain. Many people applying AI in trucking do so to improve their maintenance processes. Algorithms can help them become aware of problems sooner, preventing costly downtime. 

Choosing a goal-oriented approach will help people stay committed to using AI for well-defined reasons, such as to overcome known challenges. They should also investigate whether vendors offer monthly plans, allowing them to try artificial intelligence without committing to large upfront payments. 

4. Overlooking the Importance of Privacy

Many trucking professionals appreciate road-facing cameras for the peace of mind they offer. The captured footage can show how traffic conditions or other drivers contribute to unwanted outcomes. Then, people in truck cabs can show they did everything right, but the situation still went badly. Such insights can be beneficial if another road user wants to sue a trucker for something that happened.

However, many industry professionals have a much different view of cameras aimed at drivers. One Utah-based owner-operator with three decades of driving experience said he would never install driver-facing models, even if an outside party mandated it. He explained that his truck is his home on the road, meaning the cab crosses professional boundaries and enters personal space. 

A camera installed in a cab doesn’t just track what a driver does at work, but it shows what someone does to make the space more comfortable and pleasant. Others raise concerns about what happens to the collected data and who sees it. Will footage of drivers’ faces get permanently stored on distant servers, handled by strangers?

Some tech companies tackle these challenges by assuring potential customers they can turn off the cameras during non-driving time or that drivers’ faces get blurred by built-in features. Even if decision-makers are strongly interested in using these options, they must take drivers’ concerns seriously. 

It’s especially important to do that if those considering using AI in trucking have not been behind the wheel for years — or ever. Such cases can make it difficult to understand drivers’ worries and why they may not want cameras trained on them at all times. 

Carefully Choose When to Rely on AI in Trucking

Adding artificial intelligence to truck cabs can give people better oversight, allowing them to make confident, data-driven decisions. However, this technology has valid downsides, and people must weigh all those against the anticipated benefits. Considering the associated costs, driver feedback and other aspects will increase the chances of reaching well-informed decisions that will help their companies and lead to measurable outcomes. 

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Global Trade Daily, Technology

Innovative Automaker Adopts VR for Collaborative Design Efforts 

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The past few years have been challenging for automakers and the fleets that rely on them. Supply chain troubles and rapidly shifting consumer demands have led to price volatility and extensive backlogs. However, amid all these obstacles, GM was able to put out the BrightDrop Zevo 600 in record time.

Going from idea to full-scale production in under two years would be impressive in any context. Doing so at the peak of pandemic-era disruption is staggering. The only way it was possible was through extensive digitization and immersive collaboration — a practice that may rewrite the future of the transportation industry.

The Challenge of Modern Industry

To fully grasp the benefits of immersive collaboration, businesses must first recognize where conventional approaches fall short. It starts with the industry’s labor challenges. Manufacturing could have 2.1 million unfilled positions by 2030, and logistics and supply chain operations face similar shortages. As current workers retire and fewer enter the sector to take their place, it’s becoming increasingly difficult to remain productive — at least by traditional means.

Amid the COVID-19 pandemic, many office jobs transitioned to remote work, but industrial workplaces couldn’t, leading to long periods of lost productivity. Now, home-based jobs are becoming the norm in some sectors, attracting more young workers and worsening the labor crisis in industries where that’s not an option.

As these labor challenges persist, output demands are rising. Manufacturers must produce higher-quality products in less time at lower costs to remain competitive in an increasingly agile market. Fleets must support that growth and expand to deliver more in shorter time frames. Achieving that is challenging enough on its own, much less amid dwindling in-person workforces.

The pandemic also revealed how fragile conventional supply chains are. Companies must adapt to new challenges at a moment’s notice, but standard manufacturing and supply chain practices don’t support that kind of agility.

The Record-Breaking BrightDrop Zevo 600

Despite all these challenges, GM managed to put out its fastest vehicle to market in company history. Engineers began designing the BrightDrop Zevo 600 in early 2020, and despite shutdowns they released it 20 months later. The secret to this project’s success was a quick pivot to immersive virtual collaboration technologies.

Virtual reality (VR) was at the center of this technological shift. Engineers used VR to work together in immersive digital environments, replicating in-person cooperation despite being miles apart.

The VR system BrightDrop used is more advanced than a simple headset. It also features tracking sensors called lighthouses and pucks that give users a more grounded sense of position and direction in the virtual world. These sensors also prevent collisions with physical objects. VR-capable design software and gaming computers to run it completed the system.

Through these technologies, BrightDrop employees were able to collaborate from their homes. VR provided the convenience of videoconferencing with the ability to interact with the same digital elements as physical objects in conventional workflows. 

What the Zevo 600 Means for Transportation

The Zevo 600’s development showcases immersive collaboration’s potential for industrial sectors. While VR meetups were a health necessity at COVID’s peak, they’re valuable time-savers under normal circumstances. Employees can work together without wasting time traveling to the same physical location.

Because VR is immersive, it’s easier to remain productive and ensure virtual models more closely reflect their real-world counterparts — whether they represent specific products or their larger supply chains. This advantage further shortens turnaround times by minimizing physical iterations and avoiding time waste other digital solutions may foster.

As these solutions speed up auto manufacturing, they open new possibilities for the fleets relying on these providers. New vehicles offering needed improvements in efficiency, reliability or sustainability will come out faster, enabling rapid fleet expansion. Shorter lead times can also reduce prices, further supporting logistics growth.

VR and similar technologies could also address logistics companies’ labor problems. Companies can hire employees from other cities, states and countries when people no longer have to be in the same place to work together. The labor pool broadens dramatically as a result.

VR-powered remote work doesn’t necessarily apply to drivers but can ease the burden on logistics businesses’ office staff. It also opens the door for remote onboarding and early training for drivers or mechanics, even if they must move to work in person eventually.

Similarly, some companies have started using VR to train mechanics and other personnel. Adopting this approach could let supply chain organizations bring new hires up to speed faster. Immersive digital environments are better teachers than noninteractive presentations but are safer than real-world workplaces and support remote hiring.

This digital collaboration also has benefits outside of speed and labor issues. Because it lets automakers create more in-depth designs in less time, they don’t have to sacrifice efficiency for high-quality products. That’s good news for transport companies seeking to grow their fleets while capitalizing on newer technologies for driver comfort or safety.

Despite its rapid development, the Zevo 600 brought several delivery-focused innovations to its design — including larger cupholders and a cabin that’s easier to enter and exit. Other automakers can use the same approach to equip their vehicles with in-demand features and functionality without long lead times. As a result, they can meet changing market needs faster, helping transportation and logistics become more agile.

Bringing Immersive Collaboration to New Applications

The BrightDrop Zevo 600 isn’t the only product to benefit from this technology, and it certainly won’t be the last. Maserati used a similar approach to design a car in eight weeks, aiming to have a working prototype in under two years. Computer-aided design software and 3D printing accelerated the process. As this design philosophy becomes standard, fleets can expect new vehicles to roll out faster, enabling quicker expansion or EV adoption.

Immersive, tech-centric collaboration has applications outside of automotive design. VR and its adjacent technologies enable real-time remote collaboration in workflows where simple video meetings aren’t sufficient. Logistics companies can use these solutions to connect maintenance professionals in different areas, learn to work with new equipment faster or collaborate on virtual models of supply chains for more effective planning.

 

This technology also has promise for fleets’ workforce and HR operations. Managers can train workers in VR so they learn important safety steps before handling potentially hazardous equipment in the real world. These immersive environments can shorten onboarding times to support faster expansion and higher productivity.

VR collaboration lets maintenance personnel train on virtual representations of different vehicles without needing the real thing. That way, fleets can prepare to work with newer equipment in less time. This advantage will become more important as autonomous driving and EVs transform logistics operations.

Supply chain management can benefit from immersive collaboration, too. VR meetings make communicating with global partners easier, informing faster, more effective operational decisions. Faster, more in-depth communication will become increasingly important as workforce struggles continue and demands for quick shipping rise.

Immersive Collaboration Is the Future of Transportation

BrightDrops’ Zevo 600 proves that digitization’s benefits for the auto industry are more than just theoretical. It enables the changes the sector needs to compete in a fast-paced, tech-centric world. While this shift is starting in manufacturing, it has ripple effects across the transportation and logistics industry.

New technologies will become essential in remaining productive as supply chain and logistics companies face mounting challenges. Immersive collaboration is the first and one of the most important steps in that goal. Now that companies are starting to see massive real-world benefits from this innovation, it won’t be long before it transforms the industry.

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Global Logistics, Global Trade Daily, Technology, Trucking

4 Emerging Tech Tools for Managing Heavy-Haul Regulations and Compliance

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Heavy-haul regulations can be challenging, especially since they vary by state and load size or weight. Fortunately, many companies now offer technology for heavy-hauling compliance. Using it can provide peace of mind and better productivity for logistics professionals. Some solutions can also assist people in learning how to haul heavy equipment while achieving safer outcomes.

1. Mobile Apps Streamline Document Management

Many people have their smartphones in perpetually easy reach these days. Unsurprisingly, many businesses providing technology for heavy-hauling compliance have focused on the app space. Not long ago, the paperwork associated with individual loads was all hard copies, so the risk of losing or misplacing those critical documents always existed. Now, many smartphone apps keep digital versions of paperwork.

That way, drivers or other relevant parties can quickly pull up the necessary data even if something happens to physical copies. These apps also allow users to confirm details or provide proof of delivery — for example, perhaps the information entered into the app by a fleet supervisor doesn’t match the load’s actual size. Drivers or other responsible parties can provide corrective information without concerning themselves with changes to physical documents.

Similarly, drivers or other logistics professionals can report cargo damage through these apps. The ability to provide details immediately after discovering issues is a great way to maintain accountability. Conversely, a driver could use the app to verify they delivered the cargo in excellent condition. If the recipient complains afterward, there’s a digital document trail for future discussions.

2. Artificial Intelligence Makes Heavy-Hauling Compliance Manageable

Some corporate representatives are also exploring how artificial intelligence (AI) could ease people’s compliance-related concerns or requirements. That might mean they offer an AI chatbot users can access 24 hours a day to get quick answers about their situations.

Another possibility is to improve oversight of heavy-haul regulations with automated software that use AI to pull text from printed documents, provide translation help or direct emails to the correct inboxes. Those tools don’t remove the need for human supervision but often allow small or overworked teams to do more with fewer people.

Some of the most ambitious AI applications focus on how to haul heavy equipment with fewer or no drivers. One system handles autonomous merging and lane changes, and can apply the brakes, but people behind the wheel can always override the technology. Training data for the technology also comes from footage occurring 10 seconds before and after an unusual event. That approach familiarizes the AI with uncommon scenarios and makes it work in various traffic patterns.

Although some brands have invested in AI technology for heavy hauling compliance that does not require drivers in the cab, most of those efforts are in the early stages. As AI becomes more widely used and capable in the real world, it’ll be easier for people to learn how to haul heavy equipment while technology assumes significant parts of the task. Such outcomes will help leaders manage heavy-haul regulations regarding hours behind the wheel and rest periods.

3. Smart Sensors Show How to Haul Heavy Equipment Safely

People wishing to buy trailers must consider specifics such as the load’s size and weight before committing to their purchases. It’s also wise to think about user-friendly designs for loading the trailer. Heavy lifting results in approximately 30% of accidents at work, so risk minimization pays off. One option is to choose tilt trailers, which transform the bed into a ramp for easy loading.

However, some decision-makers also purchase trailers with built-in sensors that promote safety throughout fleet companies. Specifics vary by vendors and products, but commonly available offerings can detect poorly secured loads, open doors and other issues that pose safety hazards. 

Some versions of this technology for heavy-hauling compliance extend to operator safety, such as sensing an unfastened seatbelt or drowsy person behind the wheel. Those solutions enforce a safety culture throughout an organization, even with its drivers spread throughout the country.

Businesses even have driver bonus programs that reward participants for taking specific actions, such as activating the vehicle’s GPS. Once operators utilize technology and prove they know how to haul heavy equipment safely, they get points redeemable at well-known partner retailers.

Sensors can provide constructive feedback, too. Suppose a driver repeatedly disobeys a company’s safety rules and sensors record the incidents. Then, that employee’s manager has leverage and evidence to use during conversations about the matter. Once the involved parties recognize and agree there’s bad behavior to address, sensors can indicate whether improvement has happened.

4. Cloud Computing Keeps Heavy-Haul Regulations Accessible

Cloud computing has also emerged as an essential technology for heavy-hauling compliance. It’s especially valuable as enterprises grow and expand into other states. Cloud-based platforms eliminate the need for on-site servers and offer features to improve efficiency. Many automatically update, giving people the latest software refreshes to keep their tools current.

Solutions often have project management features, communication capabilities and user-friendly search engines. Then, whether a fleet company operates in one state or worldwide, managers can stay abreast of everything happening at each location and with every team member.

One trucking company that adopted a cloud-first approach did so to stay competitive in a challenging market while adapting to meet customers’ needs. Cloud products allow collecting and referring to data, and tackling operational shortcomings. People could also use them as document repositories for verifying which heavy-haul regulations apply during each part of a load’s journey across the country.

Many cloud products are highly customizable. Logistics professionals interested in using them should begin by considering their needs and looking for suitable possibilities.

Start Improving Hauling Compliance Today

Managing regulations and compliance in the heavy trucking industry isn’t easy. Fortunately, technology offers ample opportunities for process improvements that could boost driver satisfaction and support the bottom line.

Setting a tech budget is a great first step in integrating some of the options described here or elsewhere. People should also consider which operational duties take the most time or have frequent errors. Those may be the best candidates to enhance with technology. In any case, it takes time for employees to learn to do things differently, so being patient and staying motivated about the eventual outcomes will pay off.

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Global Logistics, Global Trade Daily, Uncategorized, Warehousing

The Top 5 Inexpensive Warehouse Automation Solutions

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Logistics leaders may hesitate to implement upgrades due to their estimated warehouse automation cost calculations. They can be substantial, climbing into the millions of dollars. However, there are various types of warehouse automation to consider, so people can prioritize the least expensive possibilities rather than ruling out automating some processes. 

1. Motor-Driven Roller Conveyors

Warehouse workers don’t make the best use of their time when moving goods from place to place. This approach also prevents them from doing other, more valuable tasks. However, motor-driven roller (MDR) conveyors are affordable ways to automate product movement through a warehouse. 

MDR conveyors can also alleviate warehouse automation cost concerns if people switch to them after using other types. For example, replacing a 5-foot chain-driven live roller with an MDR of the same length could save as much as 81% in energy usage, making the change an excellent investment. That’s partially because they only use electricity when moving things. 

People with modest conveyor belt budgets should make the most of their resources by considering which processes or areas of the warehouse could most benefit from this type of automation. Ordering conveyors in precisely the length needed will keep costs down and help them immediately start taking advantage of this investment. 

2. Warehouse Management Systems

A warehouse management system (WMS) can automate numerous tasks, and people will get the best results if they take the time to learn what’s possible and how to take advantage of the various features. These systems are ideal for eliminating manual tasks such as monitoring inventory levels or counting items. 

Many facilities achieve significant accuracy and product volume gains after implementing WMS. Even if the initial costs are higher than desired, they often pay for themselves over time by enabling process improvements and reducing errors. 

People can also use WMS platforms to create digital guides showing all merchandise locations and storing similar products together in the warehouse. Those are more reliable than paper copies, which can easily get lost or damaged. Plus, a document showing how to find different products is particularly valuable for newer employees who need to become more acquainted with a warehouse’s layout.

WMS providers often allow customers to opt for monthly or yearly billing cycles. The latter type is usually less expensive. However, when decision-makers are on tight budgets and not ready for long-term commitments, they may go with monthly bills to see whether the chosen solutions work as well as expected. 

WMS platforms may also include free trials that let people see what they offer before making billing cycle decisions. Alternatively, product walkthroughs led by sales representatives provide similar information without as much freedom for potential customers to explore the software themselves. 

3. Predictive Maintenance Sensors

Statistics suggest that 90% of maintenance work involves addressing crisis breakdowns. In an ideal situation, people would spend much more time keeping critical machines in good condition, making those urgent circumstances much less common. Predictive maintenance sensors enable this. 

Many commercial solutions automatically collect data and alert the proper parties to abnormalities. Sensors are extremely versatile compared to other warehouse automation types with more limited applications. People can use them on almost any piece of equipment and enjoy the assuredness of getting real-time information streams. 

People can also customize the total warehouse automation cost for this approach by deciding how many sensors they want to use and for what reasons. Being strategic about the options lowers expenses and helps decision-makers get the desired results. 

One possibility is determining which warehouse machinery pieces break down most often.

Alternatively, people can choose those that take the longest to fix or cause the biggest disruptions when issues arise. Next, they should purchase sensors to measure the most common symptoms of abnormalities, whether elevated temperatures, strange vibrations or something else. 

4. Pay-Per-Use Types of Warehouse Automation

Automating a warehouse requires financial resources, even when people aim to do it as affordably as possible. That’s one of the main reasons for the increase in services that allow access to various types of automation without the typical high upfront costs. This trend has resulted in the automation-as-a-service market. 

The specifics differ by provider. Generally, customers pay fees depending on how much they use the automated equipment in a given month. Their subscription prices usually include all maintenance, repair and upgrade costs. 

One company that recently began offering a pay-per-pick model to customers requires them to pay upfront fees to cover the necessary grid infrastructure. The estimated warehouse automation cost in such instances is 20%-40% of the total expenses. After installing the grid, clients budget for recurring subscription fees based on how many robots and other associated technologies they require to meet goals. 

5. Automated Mobile Robots 

Automated mobile robots (AMRs) provide the material-moving capabilities of conveyor belts with even more flexibility. AMRs have sensors and built-in computer vision technology, allowing them to automatically map out a warehouse and recognize obstacles. This means they can move safely around facilities without requiring extra infrastructure. 

People with cost-related concerns should discuss them with their preferred automation providers. Many companies offer finance plans so customers can spread the costs over time. Some may offer refurbished machines priced more reasonably than newer ones. 

Keeping AMRs affordable also means scaling up gradually. A decision-maker might initially only buy a few for some of the most labor- and time-intensive transport-related tasks. That’s an excellent strategy for ensuring people get the anticipated return on investment before purchasing more. 

Warehouse leaders should also ask for feedback from employees, learning about which movement-related tasks are most cumbersome or often take them away from other duties. Those responsibilities could be among the best to automate first. 

Control Warehouse Automation Cost Hesitancy

These types of warehouse automation solutions are among the most affordable possibilities, provided the people involved think carefully about how and why to use them. Although automating a facility requires investments, people can keep costs down by remembering they can gradually implement their plans and wait to see results before committing to additional technologies.

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Global Logistics, Global Trade Daily, logistics, Technology, Warehousing

Leveraging Warehouse Simulation for Faster and Accurate Operations

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As decision-makers cope with fluctuating variables, many use warehouse digital twins for better preparedness. This warehouse simulation method involves creating highly detailed digitized versions of buildings, equipment or even entire supply chains.

People can then look forward to warehouse simulation benefits ranging from improved predictions to better space utilization. Creating digital twins takes time and financial investment, but these advanced tools allow users to maintain competitiveness in fast-changing landscapes.

Reduce Equipment Failures With Warehouse Digital Twins

Everything from overly heavy loads to corrosion can cause warehouse equipment to fail. The associated downtime is often prohibitively costly. However, digital twins can increase people’s awareness of parts, activities and other aspects that may lead to future machine malfunctions.

People can build equipment-based warehouse digital twins for fixed or moving components and then run simulations to see which elements cause the most stress on the machinery. Alternatively, this approach could show what people should do to ensure the equipment lasts at least as long as its expected life span.

A digital twin could also help people make comparisons between different equipment models. Does a newer conveyor belt break down less often than one three years older? If so, how do the parts differ between the two? Studying the variables could increase equipment reliability or help people decide when to upgrade a warehouse’s machines. 

Let Warehouse Simulation Tools Highlight Bottlenecks

Modern warehouses are busy places, and slowdowns could cause ripple effects across operations. However, increased visibility is among the often-cited warehouse simulation benefits executives love. They can create digital twins to show baseline performance in the facility, making it easier to spot deviations. 

When leaders see something different from the norm, they can analyze the digital twin’s data to understand the cause and its effects. Which areas of the warehouse get the most traffic throughout the day? What are the most common picking locations? If one production line gets backed up, how does that problem affect the facility’s other workflows?

The answers to these questions are not always immediately obvious. However, noticing the issues and identifying solutions is often easier with digital twins. Warehouse simulation products can also show whether training improvements would bring the desired gains to relieve bottlenecks.

Sometimes, slowdowns occur because of physical issues, such as too many staff members working in a confined area and causing delays. However, non-optimized processes can also cause them. Once a simulation shows the cause, people can start working on practical solutions. 

Choose the Best Ways to Use Space

Whether people are having new warehouses built or altering the current layout of an existing facility, digital twins enable individuals to see the options without making changes in the real world.

For example, warehouses generally use combinations of three different aisle widths. Those categorized as very narrow start at 72 inches wide, although the widest options are at least 156 inches. The significant variation between the options makes it more challenging to see which aisle widths are best for particular spaces. 

However, individuals taking advantage of warehouse simulation benefits can test numerous configurations before finalizing decisions. Such an approach is also convenient when planning to invest in new fixed equipment or warehouse robots. Can the facility safely accommodate more assets without disrupting traffic flows?

Depending on a digital twin for space-planning reasons can also help people make better choices about the necessary equipment. Most modern warehouse ceilings are up to 40 feet high. Taller heights require specialized equipment, such as high-reach forklifts. 

Learn the Effects of Time in Transit

What happens in a warehouse is only part of the story. Inappropriate travel conditions could mean perishable goods arrive in unsellable condition. Even if a warehouse’s managers had no influence or control over what occurred, they could still receive the blame. 

Warehouse digital twins can remove much of the uncertainty about what happens once products begin traveling to their destinations. In one case, researchers tracked 47 container loads of citrus fruits during a 30-day journey. They wanted to learn how time affected the consumables’ arrival condition and whether the fruits traveled in conditions outside their optimal temperature ranges. Digital twins revealed the best ways to extend shelf life, showing the best environments. 

Decision-makers could also take a similar approach to see which packaging materials withstand road jostles, rough handling and other likely outcomes of goods traveling long distances. People increasingly choose to ship goods in sustainable, sturdy containers. However, it’s best to test the options in a simulator before purchasing possibilities that may not be as good as they first seemed. 

Become Proactive About Disruptions

As supply chain specialists hear about warehouse simulation benefits and use cases, many become excited about how digital platforms could help them anticipate and respond to disruptions. The alternative typically involves reacting to issues once they’ve happened. 

Warehouse digital twins are especially beneficial for companies with sprawling supply chains extending to multiple countries. Automotive brand Ford requires 35 billion components to make 6 million vehicles annually. Things get even more complex since Ford relies on 1,400 suppliers linked to 4,400 manufacturing sites. A simulation could show the likely consequences of severe weather, labor strikes or any other event that could lengthen the time required to receive goods. 

Reliable data about shipping time frames also improves customer satisfaction. Many people willingly pay more if merchants guarantee they’ll get their goods in one or two days. It’s less appealing if shippers provide larger ranges, such as 7-10 business days.

Warehouse simulation tools allow users to see if everything’s on schedule or remain flexible when uncontrollable circumstances arrive. Although logistics managers cannot manipulate a storm’s impact, a digital twin allows them to route goods to avoid inclement weather.

Anticipate Warehouse Simulation Benefits

These offers can become excellent long-term investments for those willing to learn how to use them and customize the features to their precise needs. 

However, since most users cannot develop digital twins for all warehouse assets, they should prioritize those most likely to give them the biggest payoffs over time. As leaders see the possibilities and workflow enhancements, they’ll be more open to expanding how the warehouse uses digital simulations. 

Setting specific goals will also help digital twin projects stay on track for success. What are the facility’s biggest current challenges? Which workflows do employees report as being most time-consuming or error-prone? The answers to these questions can illuminate appropriate use cases, giving leaders the confidence to pursue them and set examples for others.

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Global Logistics, Global Trade Daily

How to Adapt Procurement Skills in the Era of AI Innovation

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The age of artificial intelligence (AI) is here. It’s not a question of if AI will change the industry, but one of when and how. As this shift approaches, employees and leaders alike must prepare for the impact of AI in procurement.

AI will become more common in procurement, changing what skills are most important in the industry. Those who can get ahead of that trend could thrive over the coming years, while those who don’t may fall behind.

The Impact of AI in Procurement

AI’s impact on procurement will be significant. Digitization remains the second most-cited procurement strategy today, and analytics and robotic process automation are the most deployed and value-driving of these investments.

Analytical applications are the most promising in procurement circles. AI can compare multiple suppliers to identify the best one for each job faster and more reliably than humans. Alternatively, it could analyze spending patterns to highlight cost inefficiency and find new ways to save.

The rise of AI in procurement also has significant implications for compliance and risk management. Machine learning models can automate regulatory assurance tasks to ensure all forms meet applicable standards or alert managers to compliance issues with supply chain partners. Similar tools can look for supply chain risks to inform better decision-making.

Automating repetitive tasks is another key use case for AI in procurement. Models can manage billing, data entry, basic outreach, summarizing feedback and similar time-consuming tasks to give employees more time. Businesses can then accomplish more, even without a larger workforce amid labor shortages.

Preparing for an AI-Driven Future

Because there are so many use cases for AI in this field, the procurement workforce will shift in response. The skills employees need to succeed will change, so it’s important to prepare for this shift.

Learn to Work With AI

The most important part of that adaptation is learning to work with AI. That’s crucial both for effective AI implementation and remaining competitive as a worker.

AI is impressive, but it’s only a tool. Procurement operations need people who know how to use it properly to experience all its benefits. At the same time, 51% of IT decision-makers say they lack the in-house talent to meet their AI goals. That leaves both an opportunity and a challenge for the procurement workforce.

If more existing employees learn general AI skills, businesses wouldn’t have to scramble to find outside talent. Workers who pursue this career development would also better their chances at employment and promotion in the future. That skills shift will take time, but it’ll be worth it long term for everyone involved.

Foster Tech Talent

Procurement professionals can take this trend further. As AI grows, so will the other technologies that support it, like digital data, cloud computing and the Internet of Things (IoT). Employees who get more familiar with tech will be better suited to thrive in these more tech-centric environments.

Automation through AI will leave employees with more time but fewer of the same tasks to complete. Consequently, they’ll have to perform different roles. Making sure all the company’s new technology works as it should is one of the most crucial of these roles.

The shift to tech talent lies on both employer and employee. Employers can provide upskilling opportunities to foster these new skills and employees can pursue them on their own time to get ahead of the trend.

Emphasize Strategy, Communication and Creativity

Previously, humans had to do much analytical work to find the best procurement options. Open tendering was the most transparent but most time consuming, so employees had to be able to make complex choices quickly. AI in procurement removes that inefficiency barrier and automates decision making, so the same skills won’t be as in demand.

In the age of AI, it’ll be more important to be strategic, communicative and creative. AI can handle analytical, efficiency-focused tasks, so it’s up to employees to find ways to apply its insights effectively.

Real-world implementation, communicating with other stakeholders and finding creative solutions based on data aren’t strong suits for AI. However, humans excel at them. Consequently, the workforce of tomorrow will center around these skills while AI manages the administrative and analytical side.

Cultivate Soft Skills

As procurement professionals develop these new talents, they shouldn’t overlook soft skills. Job-specific hard skills were more important in the past, but as AI changes jobs, businesses will need people who can adapt amid the shuffle. Soft skills are the key to meeting that demand.

People skills are some of the most crucial of these talents for procurement. As AI handles more of the paperwork, employees will likely need to spend more time on maintaining supplier relationships. Being personable and a good communicator is essential for that role.

Developing these soft skills also gives employees an edge AI can’t beat. That’s hard to ignore amid rising fears of job displacement as AI automates more roles.

Apply AI and Human Talent Where They Fit Best

Those fears over job loss deserve more attention. In a perfect world, AI in procurement will help human workers do their jobs more efficiently, not replace them. However, it can be tempting to automate some roles entirely to save money.

Replacing humans with AI may seem profitable, but it’s not ideal for anyone in the end. AI has several significant risks that could endanger procurement workflows that rely too heavily on it. The best solution is to learn AI and humans’ distinct talents, and distribute tasks accordingly.

AI is great at data-heavy, repetitive and analytical tasks, whereas humans are better at roles requiring adaptability or intrapersonal communication. As the workforce shifts in response to AI, employees should focus on developing the latter to solidify their value. Employers should note this distinction and view AI as a complement to people, not a replacement.

It’s Time to Adapt to the Age of AI in Procurement

Jobs and their required skills have always shifted as new technologies have emerged. The difference with AI is this change could happen much faster than previous innovations.

Employers and employees alike must get ready for the changes AI in procurement will bring. If they can adapt early, they can ensure AI and the workforce work together to achieve optimal results.