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3 Reasons Augmented Reality is the Future of Supply Chain
microsoft augmented reality

3 Reasons Augmented Reality is the Future of Supply Chain

Imagine you are in a store shopping for a wearable device and want to know how other consumers have rated a specific one that you are interested in. By glancing down at the product with your smart glasses, you will instantly see other information displayed alongside the device, like user ratings, supply information, and product price range, all of which empower your purchasing decision. This is what Augmented Reality (AR) can do. Before we look into why augmented reality is the future of supply chain, let’s consider some AR basics.

What is AR?

augmented reality is the future of supply chainAR is defined as the extension of physical reality by adding layers of computer-generated information to the real environment. In other words, AR has the capability to enhance every object you see with additional and valuable information. This information could be any kind of virtual content or object, including text, video, graphics, sound, GPS data, haptic feedback, and even smell.

Commercial AR applications have only been around for a few years. In fact, the first iPhone AR app was only released in 2009. Around this time, AR was largely perceived by the public as a marketing gimmick; a technology with no meaningful application.

But this perception has continued to change, with AR revenues expected to reach USD 5.2 billion in 2017 compared to just 181 million in 2011.

AR in Business

Today, there are concrete benefits of AR products in nearly every industry, including social networking, lifestyle and healthcare, multimedia and entertainment, games, location based, and enterprise.

For businesses working with different partners and suppliers, fulfilling orders through various warehouses and 3PLs, and selling on multiple channels to different consumer types using a range of devices, a critical component of their success lies within their logistics and supply chain framework.

DHL recently carried out a successful pilot project test for AR via smart glasses in a warehouse in the Netherlands. This test focused on the picking process in warehouses. But AR can be used in other areas of the supply chain beyond warehousing operations, like for optimisation of transport services, last-mile delivery, and enhanced-value services.

As per the DHL pilot test, AR proved to be very beneficial for warehousing operations, which account for an estimated 20 percent of all logistics costs. The picking process accounts for 55 to 65 percent of the total warehousing costs, and AR can help reduce these costs by improving the process. AR can also play a big role in training of both new and temporary warehouse staff, as well as with warehouse planning.

Here is a look at the value offered by AR in the supply chain categories:

1. Optimised picking process: Pick-by-vision

Most warehouses across the globe still rely on the pick-by-paper approach, which is slow and prone to errors. Additionally, picking tasks are usually assigned to casual workers who need cost-sensitive training to make sure that they work effectively with minimal errors.

AR offers vision-picking software that offers real-time barcode reading, object recognition, indoor navigation, and seamless integration of data with the Warehouse Management System. The result is hands-free intuitive digital support during manual picking processes.

With AR, the worker can:

  • View a digital picking list in their field of vision
  • Choose the best route from the navigation system
  • Quickly locate the right item on the shelf using the barcode scanning capabilities
  • Scan the item for real-time stock updating

AR can reduce the time required to train new employees; bridge any language barriers; reduce pick errors and search time; and increase number of tasks performed per day for profitability.

2. Optimised Warehouse Planning

Today, the warehouse is used for a lot more than simply storing and distribution of merchandise. Warehouses can be used for a range of value-added services, from product labelling to product assembly to repacking and repair. For warehouses to accommodate these extra tasks, they need to be redesigned.

AR can be used to visualise any planned layout adjustments in full-scale, allowing for the placement of interactive digital representations of proposed future modifications in the current, real warehouse setting.

So, planners can use AR to:

  • Test whether the measurements of the planned modification will fit in place through mixed-reality simulation
  • Model new workflows and adjust appropriately

The application of AR in warehouse planning can not only support additional services, but also reduce the costs associated with warehouse redesign and planning.

3. Transport optimisation

In recent years, the adoption of advanced information technologies by logistics providers has significantly improved the reliability, efficiency, and security of freight transportation. AR can further optimise cargo transportation in areas like:

Completeness checks – Currently, pick-ups involve manual counting or time-consuming barcode scanning with handheld devices. A wearable AR device can be combine scanners and sensors to perform more effective pick-ups, by assessing the number or volume of pallets or parcels and comparing them to predefined values. This can be used to determine if a delivery is ready for pick-up.

International trade – AR devices can be used to check printed trade documents to identify item code classification for real-time translation of parcel labels and trade terms. This will, in turn, facilitate trade documentation and international freight handling.

Dynamic traffic support – Traffic congestion inhibits the smooth running of economic processes that are dependent on smooth flow of physical goods. Replacing navigation systems in delivery vehicles with AR devices, such as glasses or windshield projection can facilitate the analysis of real-time traffic data and suggest alternative routes in the driver’s field of vision. This will optimise routing on the go, improve driving safety, and reduce driver distraction.

Freight loading – AR devices can be a great replacement for printed cargo lists and load instruction. The loader would, instead, receive a load plan and instruction of the sequence of pallets to load and where to place them directly on their AR device display, speeding up the freight loading process.

Augmented Reality is the Future of Supply Chain

One other point worth noting is that AR can facilitate the process of last-mile delivery, which is the final step in the supply chain, and usually the most expensive one. With AR, the staff can view critical information about each parcel (contents, weight, handling instructions, destination), which will facilitate the loading, handling, and delivery process.

Basically, the possible applications of AR in the supply chain are only limited by the imagination. The ability to place a non-tangible component of the business on top of the physical attributes of business will transform how businesses and consumers view typical process in the typical supply chain.

Augmented reality will truly transform the future supply chain, but one challenge it has to overcome is the limited battery life associated with such optimised function.

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