Driverless Vehicles and Autonomous Supply Chains
Usually at Vanguard Software, we talk about integrating and automating supply chains on the digital front, namely through advanced analytics and automated planning. But we can’t ignore the strides being made toward the autonomous supply chain with respect to logistics and distribution.
Driverless vehicles are poised to disrupt both last mile and long-distance distribution in the near future. A McKinsey study suggests that 80% of global deliveries will eventually be automated. With intensely short delivery windows a new norm, it is safe to say most distributors will need to find a solution to inefficiencies in the delivery process, while keeping an eye on costs. These high expectations will require a streamlined delivery approach driven by driverless vehicles.
Long distance travel between distribution centers will most likely be the first sector of distribution that is driven to change. Since highway traffic is far more predictable than roads in urban settings, automated vehicles have an easier time navigating these scenarios. Although the current understanding is that these long-distance shipments would still have human operators as backup, their time would cost less and they would require fewer stops. Driverless vehicles that travel together in groups (called platoons) would also reduce fuel consumption and costs because of the drafts they create.
Last Mile Delivery
Another common challenge faced by distributors is last mile delivery. In the current consumer climate, next-day or same-day delivery is becoming a norm, making “the last mile” a growing focus. But last mile delivery tends to be a bottleneck in the delivery process, causing frequent delays and added costs.
Forward-thinking companies are experimenting with driverless vehicles that could deliver goods to the end consumer over short distances without the need for a driver present. Companies like Amazon are already testing out this idea with their own robots, while Walmart and Kroger are partnered with third party Nuro for autonomous grocery delivery. In either case, when faced with the challenge of meeting high customer demand at a low cost – automation is a recurring solution.
The Autonomous Supply Chain is Physical and Digital
As business and supply chain leaders look for innovative ways to meet customer demand at a lower cost, the advantages of automation are evident. While the IoT and Robotics band together to digitize the physical supply chain, putting fewer drivers on the road, facilitating fewer delays, and causing fewer accidents, supply chain operations become more streamlined and optimized. Similarly, the digital supply chain will benefit from Artificial Intelligence and automation, allowing Supply Chain Management to achieve operational excellence with more accurate predictions, fewer human errors, and fewer labor hours dedicated to analysis and planning. To learn more about “the autonomous supply chain” from a digital perspective, read this blog article.