AI & Automation in Logistics: From TMS to AS/RS

Companies implement automation either to innovate and disrupt, or keep up with the competition to keep costs competitive. By deploying advanced tooling, organizations can rely on a more predictable and agile supply chain by exceeding customer expectations. This article covers logistics automation, the technologies behind it, its benefits, applications, and future trends.

Key Takeaways

• Using logistics automation, transportation, warehouse, and yard management processes are streamlined, improving efficiency, reducing costs, and minimizing human error.
• Robotics and artificial intelligence technologies, such as AGVs, AS/RS systems, palletizers, automated case and layer picking, contribute to supply chain optimization and real-time visibility.
• A warehouse and transportation management system (TMS, WMS) enables seamless integration, which improves inventory control, optimizes routing, and facilitates more agile decision-making.
• A yard management system (YMS) enables seamless orchestration of the perimeter of the facility from optimizing the guard shack to assigning workflow tasks for drivers, spotters, and warehouse personnel. By orchestrating the perimeter, inside the building inventory is optimized, customers know of any delays ahead of time, and trailer turn time is optimal, leading to no detention costs. 
• The future of logistics automation will improve scalability, sustainability, and operational resilience as autonomous vehicles and AI-driven solutions become more prevalent. Although regulations will need to be amended and these will vary by country, the consumer market has already seen the impact and benefit of automation.

What is logistics automation?

Logistics automation software allows for data to be ingested, cleansed, and optimized based on a toolset of algorithms and executed commands that are sent to machines, vendors, carriers, or customers. These commands relate to the movement, storage, or transport of goods across any more or region of the world. Automating repetitive tasks and processes significantly enhances efficiency, reduces human error, and improves outcomes. One of the areas that isn’t talked about as much is 64% of companies face a supply chain talent gap per CSCMP, making automation critical to keeping up. Without trained professionals, organizations need to find alternative ways to meet demand and perform tasks. These systems generate real-time data points, such as location, temperature, shipping costs, and carrier availability, which are crucial for improving visibility and end-to-end traceability.

Technologies, like automated guided vehicles (AGVs) and robotic picking systems, are revolutionizing warehousing by improving accuracy and speed. Real-time IoT technologies are also transforming the food supply chain, keeping our product fresh and safe, meeting FDA standards. With real-time IoT temperature, light, and shock sensors, food and beverage supply chains can protect products from outside factors, delivering on brand promises and consumer expectations. 

While other modernization strategies, such as blockchain, have struggled to improve the logistics field significantly, it’s essential to remain open to the rapid advancements AI is bringing to logistics and supply chains. AI has the potential to revolutionize these systems further, enabling smarter decision-making, predictive analytics, and more efficient operations across the board.

Key Technologies Shaping the Modern Supply Chain

Logistics automation spans six major categories, each playing a pivotal role in enhancing the efficiency, scalability, and responsiveness of the modern supply chain. By leveraging technology in these key areas, companies can streamline operations, reduce costs, and improve overall service delivery.

1. Transportation:

Transportation automation focuses on optimizing the movement of goods across various stages of the supply chain. This includes streamlining route planning to minimize fuel consumption and reduce delivery times. Automated delivery scheduling ensures that shipments are assigned to the most efficient carriers, considering distance, cost, and timing factors. Furthermore, carrier management optimization helps companies track their transportation partners, ensuring consistent performance regardless of whether carrier networks are changing due to their other customers. 

2. Warehouse:

In the warehouse and distribution sector, automation has brought transformative changes. Automated storage/retrieval systems (AS/RS) are used to efficiently store and retrieve goods to maximize space utilization while minimizing human intervention. Automated Guided Vehicles (AGV) operate on fixed paths to perform tasks while Autonomous Mobile Robots (AMR) use IoT, AI or sensors to operate dynamically with the idea of keeping humans at a station and bringing the work to them. Coupled with software technology, robotics such as picking, sorting, and packing are increasingly performed by machines, significantly enhancing accuracy, speed, and reducing human error. Automated sorting systems can direct products to a location based on real-time data, increasing efficiency and throughput. These technologies allow businesses to scale their operations without compromising quality or speed.

3. Yard Management:

Yard management automation is an essential part of optimizing warehouse operations. Technologies like autonomous yard trucks help manage and move goods around distribution centers and yards more effectively. Camera Vision systems are able to extract data from video and photo images to match the carrier entity information, such as DOT#, MC#, Carrier Name, truck #, and trailer ,# enhancing visual proof for security and deploying unmanned gate solutions.  Workflow-based task assignment allows shipping staff to use rules to automate the queuing of trailers, yard workers rely on tablets for instructions and priority, eliminating the back and forth on radios or having to go into the office to pick up and drop off paperwork. By relying on workflows, staff are safer, more efficient, and focused on value-added tasks in real time, reducing idle time and increasing overall operational efficiency.

4. Network Planning:

Network planning automation is critical for optimizing the entire supply chain network. Demand sensing aids forecasting tools and relies on sophisticated models to predict future inventory needs, helping businesses plan their stock levels more accurately and avoid overstocking and stockouts. Inventory allocation ensures that the right amount of goods is stored at the optimal locations, reducing transportation costs and delivery delays.

5. Systems Integration:

Systems integration is vital for creating a seamless data flow between logistics systems. As enterprise applications have been surrounded by point and micro technologies, integration is a major dependency for achieving outcomes. Integration is the connective tissue between systems such as Enterprise Resource Planning (ERP), Transportation Management Systems (TMS), Warehouse Management Systems (WMS), and Yard Management Systems (YMS), ensuring that all relevant data is synchronized. This integration enables real-time updates across platforms, reducing the risk of errors caused by manual data entry and enabling more accurate reporting. Effective system integration ensures that different parts of the supply chain work cohesively, resulting in better decision-making, improved coordination, and overall operational efficiency.

6. Workflow Productivity:

Workflow productivity automation focuses on optimizing repetitive tasks and improving overall operational efficiency. Robotic Process Automation (RPA) handles routine administrative tasks such as data entry, order processing, and invoicing, freeing human workers to focus on more complex tasks that require problem-solving or creativity. Additionally, AI-driven workflows are increasingly being employed to predict potential disruptions in the supply chain, allowing companies to take proactive measures before issues arise.

Benefits of Implementing Logistics Automation

Logistics automation enhances operations and reduces reliance on error-prone manual processes. Key benefits include:

• Labor Savings: Robotics automates repetitive tasks, improving employee safety and efficiency while reducing the need for manual labor.

• Cost Reduction: Automation optimizes routing, inventory management, and overall supply chain processes, leading to significant cost savings.

• Scalability & Sustainability: Automation enables businesses to scale operations without sacrificing quality or increasing costs. It also supports sustainability goals through eco-friendly technologies like electric automation.

• Improved Customer Service: Real-time shipment tracking enhances customer satisfaction by providing up-to-date information.• Culture Shift: Automation unlocks an organization’s most critical assets to focus on strategic initiatives, relationships, and delivering on a company’s competitive advantages. The most critical asset of any organization has always been and will always be its people.

Overcoming the Challenges in Adopting Logistics Automation

While the benefits of logistics automation are clear, companies face several decision points in implementing these technologies. Understanding and addressing these is essential for a smooth transition to more automated operations.

1. High Initial Investment

One of the primary obstacles is the high initial investment required for automation technology and infrastructure. Implementing automated robotics, AI-driven workflows, and real-time tracking systems can involve significant capital expenditure. For many companies, especially smaller ones, this cost can be a significant barrier to entry.

2. System Integration and Compatibility

Integrating new automation technologies with existing systems often presents compatibility issues. Many businesses rely on legacy software that may not seamlessly connect with modern logistics automation systems like TMS, WMS, or ERP platforms. This lack of integration can lead to data silos and hinder the smooth flow of information across the supply chain.

3. Skilled Labor Shortages

The shortage of skilled personnel familiar with automation technologies is another challenge. As automation becomes more advanced, companies need workers trained in robotics, AI, and machine learning. The scarcity of these specialized skills can slow down implementation and reduce the effectiveness of automation systems.

4. Master Data

Most organizations struggle with readily available and clean master data. The old phrase of garbage in–garbage out can be exacerbated by robotics and automation. Companies need to do a data health assessment to identify what projects or organizational changes need to be made to get master data to a place where it becomes an enabler for success, not a deterrent to success. 

Adapting to Logistics Automation: Effective Solutions

While these challenges may seem daunting, companies can implement several strategies to overcome them and adopt logistics automation.

1. Start with a Clear Automation Strategy

One of the first steps is to define clear automation goals that align with overall business objectives. This helps ensure that the chosen technologies and systems deliver the desired results. Businesses should identify key areas where automation can benefit most, such as route optimization, inventory management, or warehouse operations.

2. Invest in Scalable and Integratable Systems

To address system integration issues, companies should prioritize technologies that offer multiple integration methods and utilize robust internal audits such as SOC2. Choosing solutions that can easily connect with existing software (such as TMS, WMS, and ERP systems) will make the transition smoother and reduce the implementation complexity. Companies should also consider cloud-based solutions that offer flexibility and ease of integration.

3. Focus on Employee Training and Upskilling

The skilled labor shortage can be addressed through employee training and upskilling programs. Businesses should invest in continuous learning and development to ensure their workforce has the necessary skills to handle advanced automation systems. Partnering with educational institutions or providing in-house training can also help bridge the skills gap.

4. Embrace a Phased Implementation Approach

Finally, adopting a phased implementation approach can help manage the challenges of automation adoption. Businesses can start by automating specific areas or processes instead of overhauling the entire supply chain at once. This allows for smoother integration, testing, and optimization before scaling up.

Case Studies: Successful Logistics Automation Implementations

Real-world examples of successful logistics automation implementations provide valuable insights into the benefits and challenges of adopting these technologies. One notable case is US Cold Storage, which safeguards product integrity by using cutting-edge engineering and sophisticated automation in cold warehousing, advanced robotics, and sustainable practices. 

Another significant example is Dematic and Korber’s implementation of automated guided vehicles (AGVs) and automated storage and retrieval systems (AS/RS) in warehouse environments. These companies have integrated robotics and automation solutions to streamline their operations, demonstrating the transformative potential of logistics automation.

These case studies highlight the importance of adopting modern logistics technologies to stay competitive. Learning from these examples illustrates the benefits and practical applications of logistics automation, which can facilitate successful implementation.

The Future of Logistics Automation Trends

The future of logistics automation is real, with the market projected to grow at a rate of 14.3% per year, reaching new heights of innovation and efficiency. One key outcome of logistics automation is the ability to adapt quickly to unforeseen circumstances, improving overall supply chain resilience.

The late 1990s and early 2000s dot-com boom radically shifted logistics operations. E-commerce companies needed to keep pace with the growing demand for real-time inventory updates, faster shipping, and precise order fulfillment. As a result, the rise of real-time tracking systems and the integration of online inventory management systems allowed companies to meet consumers’ increasing demands while optimizing their operations. The potential for logistics automation to transform industry expertise is immense.

As technologies like AI, machine learning, and IoT evolve, we can expect even greater advancements in logistics operations. Future innovations may include more sophisticated autonomous vehicles, advanced robotics, and enhanced data analytics capabilities, all contributing to a more efficient and responsive supply chain.

Businesses that invest in these technologies, such as Yard Management Automation, will be better positioned to meet the demands of a rapidly changing market, ensuring long-term success and sustainability. Explore how Yard management automation can streamline your supply chain, reduce costs, and improve efficiency.

Summary

The future of logistics automation is bright, with ongoing innovations set to transform the industry further. Businesses that embrace these advancements will be well-equipped to navigate the challenges of a dynamic market, ensuring long-term success and sustainability.

Frequently Asked Questions

How does AI optimize logistics operations?

AI optimizes logistics operations by enhancing route planning, demand forecasting, and real-time inventory management, resulting in more efficient and cost-effective processes.

What are the benefits of logistics automation?

Logistics automation significantly enhances efficiency and cost savings while improving safety and scalability. It also contributes to sustainability and elevates customer service quality.

What are some applications of logistics automation in warehousing?

Logistics automation in warehousing significantly enhances efficiency through applications such as automated storage and retrieval systems, robotic picking and packing, and goods-to-person fulfillment systems. These technologies streamline operations, reduce labor costs, and increase accuracy in inventory management.

How should I go about a data health assessment?

Reach out via our Request a Demo option, and one of our logistics professionals will provide guidance on a framework for assessing your logistics master data.