Artificial intelligence and automation are bringing new levels of efficiency and better planning capabilities to the supply chain.
While it’s improving business outcomes, there’s growing concern about its potential to eliminate jobs. Automation now not only includes robots on the warehouse floor, but also artificial intelligence and data processing technologies that can gather and process information more efficiently than humans can.
While some unskilled supply chain jobs will certainly be on the chopping block, automation will also create new jobs in the process.
Robots and AI will handle repetitive tasks and predictable roles
Automation is taking hold in nearly every sector of the economy. A study by Information Services Group found 72% of enterprises would be using robotic process automation (RPA) by 2019 to reduce costs, improve productivity and increase compliance. Research by Forrester also indicates that robots and artificial intelligence will replace 12 million jobs in the United States by the year 2025.
While robots have already been replacing some unskilled jobs in distribution centers, growing use of IoT and new software applications are also reducing the need for some clerical and administrative roles. Sensors, RFID tags, robots, cameras and smart solutions are reducing the need for manual inventory counts, and cloud-based solutions are eliminating the need for some accounting and order entry positions.
The changes are rippling throughout the supply chain from distribution centers and offices to retail floors. Walmart cut 7,000 back-office accounting and invoicing positions at its U.S. stores in 2016. In January 2018, it announced cuts of 1,000 corporate jobs while indicating it would also boost efficiencies in stores with more cashier-replacing capabilities and shelf-scanning robots for inventory.
“Automation won’t necessarily replace everyone in the supply chain, but it’s already changing many roles and what people do,” says Brandon White, director of quality assurance and regulatory affairs at Kenco.
In materials handling, the roles of “pickers” are already declining as robotic arms, sensors and artificial intelligence improves. More automated centers have fewer humans carrying and moving things and more using, managing or overseeing robotics.
The same intelligent processing powers that move these machines are also changing the roles of clerical functions in warehouses, says Rajat Kumar, vice president of research at MarketsandMarkets. Chatbots can now automate basic paperwork and reply to standard queries from vendors. Machine learning can also automate demand and inventory planning and use predictive analytics to account for variables such as weather, traffic, port congestion and other disruptions.
The most effective automation will improve human performance
White collar process automation is already happening in the supply chain and reducing the need for many lower level clerical workers, says Joe Fitzgerald, principal and leader of supply chain innovation at Deloitte. “Anything that is predictable and rules-based may be automated and it will span not just material handling but all work,” Fitzgerald says.
Earlier stages of adoption will augment, rather than replace humans, and enable them to perform tasks more efficiently and accurately by taking over mundane and repetitive tasks, Kumar says: “As the adoption increases and technologies mature, the role of humans will be in monitoring these technologies, handling exceptions which cannot be handled by these, and doing creative tasks that can’t easily be automated.”
Customer service agents will spend less time entering data and sending shipment updates and more time managing processes by exception and handling human-facing activities. Things like order entry, reverse logistics, supply chain forecasting and planning are all candidates for more automation because it can make them more efficient, says Neil Kinson, chief of staff at Redwood Software.
He says “supply chains have to move faster, modernize and evolve to meet the expectations of their customers, and many are looking to automation.”
While technology will take over many human-performed tasks, it won’t necessarily eliminate all positions. Data collection and processing will become more automated but humans will still drive many decisions, according to White. So instead of a dozen clerks manually gathering data or taking inventory, a more automated warehouse may cut back to a team of a few to manage the technology, handle exceptions, and chose the best paths for optimization.
“From a data standpoint, it’s going from corrective action to preventative action, so you’re able to proactively manage your business and little more effectively. So what [these workers] are focused on] will change,” White says.
Automation will “take the robot out of the human”
Automation can already offer superior performance in many areas. Robots and software solutions can work around the clock, don’t need breaks, vacation, sleep, or sick time. Most importantly, they can be “trained” in minutes by new programming, and they don’t have learning curves or a finite supply.
While things like analytics and artificial intelligence can help predict trends and automation some decision-making, they lack the capability of human judgment and human flexibility, White says. Machines and software solutions can also not automate relationships or human interaction when it comes to things like vendor negotiation, warehouse labor management, and handling complex, unique problems. Salespeople, human resource managers, customer service representatives, and systems engineers will still be required. “Human-centric career paths and roles can’t be so easily replicated by automation and will still be essential,” White says.
This wave of automation the supply chain will also create new jobs in engineering and development to continuously develop and upgrade these technologies. Rather than Six Sigma or other traditional models of improvement, new philosophies and skill sets will focus on optimizing the application of technology and humans. Optimal automation will “take the robot out of the person, not the person out of the business,” Kinson says.
Experts say it’s technological advances often produce jobs that we don’t know until further in the future. A white paper by the Association for Advancing Automation (AAA) found that as automation changes roles in the supply chain, it is actually creating new positions faster than employers can fill them.
AAA noted that as these technologies evolve, we can’t yet forecast what new jobs will be needed in the supply chain. “Even two decades ago, few could have anticipated the dramatic numbers of jobs related to cell phones, mobile apps, social media, Internet providers and cloud-based services,” the report said.