Optimization of logistics systems through artificial intelligence
Artificial intelligence plays a special role in logistics in two areas. Firstly, the optimization of the logistics system as such. Here, artificial intelligence offers the best prerequisites to enable optimization on the basis of data.
Locations of logistics hubs and their connections can also be determined with the help of artificial intelligence, just as AI can optimize routes. AI in logistics also enables the best possible utilization of logistics service providers.
This optimization requires the evaluation of huge amounts of data that logistics service providers constantly collect themselves and also have to obtain from external sources.
Artificial intelligence replaces warehousing
The second area in which AI is being applied to logistics is the creation of predictive analytics. The aim is therefore to make reliable predictions for the future from the data collected. It’s about reliably estimating what customers will actually buy in the future.
With this knowledge, classic warehousing can then be reduced. It is no longer necessary to pre-produce all products on demand to ensure delivery capability.
Predictive Analytics Enables Instant Delivery
Today, this is not yet possible, but in the future, predictive analytics will become possible through the integration and further development of AI in logistics. Companies will then know with a high degree of probability what the customer will buy tomorrow, at what place, at what time and via which channel.
The AI systems recognize patterns and probabilities that make predictions about where to expect a certain amount of sales in the near future. In the future, companies will optimize their production and logistics planning enormously. It can go so far as to send deliveries to cities that haven’t even been ordered yet but that artificial intelligence predicts with 99 percent probability that these orders will arrive tomorrow.
If the time periods of the forecast are even further into the future, it will become increasingly difficult for artificial intelligence to maintain the accuracy of the forecast but it will be possible to identify population centers where a certain number of people are very likely to need certain goods.
Thus, it will be possible to increase customer satisfaction through instant delivery. Only artificial intelligence in logistics will enable instant delivery to become established across the board and across product groups.
Act now, or miss opportunities
In the area of predictive analytics, proprietary historical data such as delivery volumes, sales figures and empirical values play a decisive role. That’s why it’s crucial for logistics service providers to collect data today, even if the concrete benefits are not yet apparent today. Those who miss the entry into the agglomeration of data today will be excluded from the markets in just a few years.
The company’s own historical data and real-time data must be supplemented by external data such as weather phenomena, consumer activity on social media, or volumes of search terms and hashtags. In the future, the interplay of all this data will make it possible to use AI to predict what makes customers tick at the moment and what needs are emerging in the market.
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Have a bright future!