In logistics and supply chain management, cool techs like Virtual Warehousing and Augmented Reality (AR) are changing the game. This is all thanks to the need for quick and precise delivery in the age of global trade and online shopping. According to a MarketsandMarkets report, the AR market is set to blow up from $4.21 billion in 2020 to $18.8 billion by 2025, with a 34.8% compound annual growth rate (CAGR). This growth is pushing logistics and supply chain management companies to spend big bucks on AR technology.
What is Augmented Reality (AR)?
AR technology revolutionizes the way we view the world by blending digital elements with the physical environment, resulting in an interactive experience for the user. You can access AR applications through your smartphone, tablet, AR headset, or smart glasses, which can overlay digital information, such as images, sounds, or videos, onto the real world. AR technology enhances your perception of reality by incorporating computer-generated sensory input, viewable through your device. This technology leverages sensors, cameras, and algorithms to recognize and track real-world objects and then superimpose digital content onto them, allowing you to interact with the digital content in real time. The virtual and real world merge seamlessly, making AR technology useful in various industries like entertainment, education, manufacturing, and logistics, and always advancing to provide more advanced and impressive experiences.
Let’s say you’re walking down a street with your smartphone that has AR capabilities. When you aim your phone’s camera at a building, the AR app will add information about the building’s history, ratings, and reviews, making your experience more engaging and informative. Another example is a logistics company that uses AR to show workers the exact location of a package in the warehouse, helping them locate and retrieve it more easily.
How augmented reality is transforming logistics and supply chain management
AR technology is transforming logistics and supply chain management by providing real-time and contextual information to users, allowing them to make more informed decisions.
As technology continues to evolve, the potential for AR in logistics and supply chain management seems limitless. Let us delve into how augmented reality is transforming the logistics and supply chain industry.
Improved Warehouse Management: AR can help enhance warehouse operations by providing workers with real-time information on inventory levels, item location, and order fulfillment. AR-enabled smart glasses can display digital data and instructions that help workers pick and pack items more efficiently and accurately. AR can also reduce the need for printed documents and labels, save time and reduce errors. According to a report by DHL, AR can help reduce errors in warehouse picking by up to 40% and improve productivity by up to 25%. Companies like GE, Boeing, and DHL are currently using AR-enabled smart glasses to enhance their warehouse operations. For example, GE Aviation uses AR to display digital instructions to workers on how to assemble complex jet engine parts.
Enhanced Training and Safety: AR can facilitate training workers on new equipment, processes, and safety protocols. Workers can view instructional videos and images overlaid in their work environment, which can help them learn and retain information more effectively. AR also helps enhance worker safety by highlighting potential hazards and providing guidance on how to avoid them. According to a survey by Capgemini, 82% of logistics companies believe that AR can improve safety and reduce accidents in the workplace. Walmart uses AR to train workers on new technologies and safety protocols. The company reported a 10-15% improvement in task completion time and a 90% reduction in training time.
The delivery process and customer service: Augmented Reality (AR) technology can improve the delivery process and customer service in logistics by providing real-time information on delivery routes, traffic conditions, and weather. It can also update customers on the delivery status and estimated delivery times. AR can enhance customer service by enabling virtual product demonstrations and helping customers visualize how products will look in their environment. By 2025, the logistics industry is expected to generate $30 billion in revenue from using AR. Companies like UPS are already using AR to provide real-time information on delivery routes and weather conditions.
Increase efficiency and accuracy: AR can also increase efficiency and accuracy in logistics and supply chain management by providing workers with real-time information on inventory levels, order status, and other metrics. This helps workers make informed decisions and resolve issues quickly. A survey by DHL found that 69% of logistics companies believe that AR can improve efficiency and accuracy in warehouse operations. Companies like DHL and FedEx use AR to improve their picking and sorting processes. For example, DHL displays real-time inventory information and item locations to workers, which has improved accuracy and reduced picking errors.
Key Challenges of Implementing Augmented Reality in the Supply Chain
Implementing augmented reality in the supply chain has its own set of challenges. One of the main hurdles is the cost, as it can be expensive to invest in this technology. There are also technical limitations due to the evolving nature of AR, which can be difficult to overcome. Another challenge is getting customers or employees to adopt AR technology, as not everyone is familiar with this. Creating high-quality AR content requires specialized skills and resources, which can be time-consuming. Finally, privacy and security concerns need to be addressed, such as the potential for cyber-attacks or the collection of personal data.
With more companies integrating AR technology into their logistics and supply chain operations, we can anticipate seeing more substantial advancements in the industry. As the technology improves and becomes more affordable, the use of AR technology will likely become more widespread. Ultimately, this will result in increased productivity, improved efficiency, and greater profitability. AR technology is rapidly transforming the logistics and supply chain management industry, creating an exciting time to be part of this innovative development.