Technology Payoffs: The ROI for AI, IoT and Advanced Analytics
The supply chain industry has been relatively cautious in adopting technologies, such as the Internet of Things (IoT), advanced analytics (AA) and artificial intelligence (AI). But that’s changing as companies realize the benefits of digital supply chain technology. IoT and predictive analytics, in particular, are providing payoffs for early adopters.
Companies use two main criteria to decide which technology to use and where to use it, according to Michael McSweeney, director of software at MHI member Vargo®. “One is internally focused: How do we become more efficient and reduce costs?” he said. “The second is from a competitive perspective: Will this particular type of technology allow us to present a competitive advantage to our customers?” That’s especially important in today’s “hyper processing” order taking and fulfillment environment, where customers are expecting Amazon Prime-type service.
Vargo’s COFE® warehouse system can incorporate information from IoT sensors to improve customers’ operations. “The more information we can get from where a product is moving around in a warehouse, the better we can be at making decisions,” McSweeney said. “That leads to predictive or advanced analytics. How do we understand what to do with this information and how do we use that result to get the product out the door faster?” The company will soon be introducing COFE, a dynamic consumption-ranking module that will enable customers to position products so that those in demand can be picked and fulfilled first.
The payoffs for IoT and predictive analytics systems should come fairly quickly if companies take the data they collect and use it to solve a business or operational problem, McSweeney added.
MHI member Fetch Robotics’ autonomous mobile robots contain a variety of sensors that report back data. “All of these individual robots, whether they be for material transport or for data collection, are endpoints within an IoT environment,” said Joe Lau, director of product marketing.