How Will Autonomous Vehicles Change Supply Chain

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Image Credit: - Danielle Gregory

By Danielle Gregory

Automation is transforming our lives at almost all levels. It has changed how we interact, work and how we behave. It has changed how we look at our lives.  

Automation has already made its way into the supply chain industry. From the manufacturing of a product to its final delivery, many operations are automated.

Automation in the Supply Chain:

Moreover, the development of disruptive technologies transformed the supply chain at its very core and has changed the manner of 

  • Manufacturing
  • Distribution
  • Tracking

The technologies that have impacted supply chain working the most include IoT, self-driving vehicles, drones, 3D printing.

Autonomous Vehicles:

Advancement in technology is re-shaping the logistics realm. Freight forwarders are adopting technological solutions for shipping cargo. Whether it’s sea freight forwarding, air or land, automation has become a significant component to carry out logistics operations. 

For land transportation, self-driving vehicles are slowly becoming a trend in the logistics and transport industry. Innovations like GPS, camera and sensor technologies in self-driving cars have reduced human intervention to a minimum.

Future of Autonomous Vehicles:

Several companies, like uber and tesla, have their self-driving cars. Self-driving vehicles’ main aim is to give users a safe and efficient driving experience with minimum risks or worries of getting tired, distracted.

More and more companies like Google and Apple are showing interest and planning to invest in autonomous technology. Moreover, some grocery stores like Walmart have just begun delivering essential food items via self-driving vehicles.

How are they Affecting the Supply Chain?

According to analysts, with the current supply chain digitization speed, the trucking and logistics industry will be dominated by self-driving vehicles by 2030.

So how precisely will self-driving vehicles impact Supply Chains? 

The effect of self-driving vehicles on the supply chain is extensive. With efficient performance, autonomous vehicles would lead to

  • An increase in cargo volume
  • Lesser number of stops
  • Quick and efficient delivery of products
  • Reduced cost
  • Less congestion on roads
  • Reduced or no chances of errors

Truck platooning, driverless cars, robots in the distribution centres will become a norm. All these things would bring considerable profits to the organizations as there will be

  • Better utilization of fuel.
  • Less Labour cost,
  • Improved efficiency 
  • Fewer mishaps.

Cost Reduction

Technology has always played a significant role in supply chain operations. It has changed and continually affects how organizations do work. By significantly reducing operating costs, these technologies promise potential long-term benefits.  

As per research, by 2030, the digitization and automation of vehicles will reduce logistics costs for standard transport approximately by 47%.

Fewer Delivery Charges

As there will be no need for drivers, the companies would save a considerable chunk of money. Self-driving vehicles will bring efficiency to the jobs as there will be no breaks for drivers. Moreover, autonomous cars will reduce idle time with algorithms. 

Self- driving vehicles are being tested worldwide, with companies continually investigating how autonomous cars could assist them in the future.

How Does it Help?

With the help of technology, human interference can significantly reduce in autonomous vehicles. This way, organizations can save the money spent on overnight driving

  • Long-distance journeys
  • Insurance money
  • Accidents
  • Stopovers and resting times

Not only this, the autonomous vehicles will efficiently manage fuel consumption as you can adjust the autonomous vehicles at a specific speed. Moreover, the vehicles can choose the most efficient route to the destination and change it accordingly to reduce travel time and reduce delivery costs. 

Improved Safety

A study by Mckinsey indicates that self-driving vehicles could prevent as much as 150 thousand people from dying in fatal accidents. Many people are still doubtful about the safety of autonomous vehicles.

Comparison of Autonomous and Manual Vehicle:

According to reports, cars driven by people’s accident rate remains at nearly two accidents for every million miles. However, one crash that involved google autonomous vehicle had already completed more than 1.3 million miles. 

So, instead of jumping to conclusions, one must consider and compare the two types of vehicles’ success rate. Moreover, with research and investigation, the shortcomings in autonomous car systems will be reduced to a minimum. 

Subsequently, by taking out driver-related mistakes, self-driving vehicles altogether improve vehicle security and guarantee that the products are delivered safely.

Solving the Driver Shortage Issue

Though the idea of autonomous vehicles taking up human jobs seems brutal yet according to statistics, presently, there is a shortage of truck drivers. There aren’t sufficient drivers out and about today. 

Research conducted in 2017 suggested a shortfall of almost 50 thousand drivers in the logistics industry of the U.S. alone. A few organizations are over-burdening their trucks, pushing drivers past beyond safe driving practices.

How to tackle the issue?

Autonomous shipping can deal with this driver lacking issue without any problem. To tackle this issue and save costs, companies are more interested in autonomous vehicles than ever for efficient delivery of their products. 

Managing and controlling trucks remotely will open up new ways for drivers to help organizations transport items. The capacity to remain at home or in an office while maintaining self-driving trucks fleets may attract more individuals to join the transportation business.

Companies that rely on trucks to ship their products throughout the nation and the world are likely to encourage these vehicles’ increased manufacturing. Due to the desire to save money combined with a lack of drivers, it seems that there will be more enthusiastic demand for autonomous trucks soon.

Impact on Distribution and Manufacturing

With time, supply chains worldwide have evolved from a linear and simple structure to becoming non-linear and complex. Advancing technology of automation in the logistics industry will also affect the distribution and manufacturing centres.                         

Distribution centres were based in areas where highways and resources could be accessed easily in the past. But it is the need of the current times that all the services are provided quickly and efficiently. Companies can either develop the centres they already have or built into different areas.

Changing Location and Number of Distribution Centres 

Be that as it may, quick deliveries are what the customer wants with the changing consumer needs. This goal can be achieved if the distribution centres are located nearer to the purchaser. So, instead of distributing from one big centre, companies are going for smaller centres closer to the cities. 

The number of centralized distribution centres are decreasing since organizations need to be found near numerous urban communities rather than simply appropriating from one focal area. 

As evident, the investment cost in this case increases, but according to analysts, it can be sufficiently reduced by incorporating autonomous vehicles in the supply chain for the last-mile deliveries.

Platoon-Based Truck Fleets 

Organizations can make platoons of trucks with the help of automation. A lead truck controls the rest of the rucks and driving. These trucks would show up in the same area simultaneously. 

One individual can control the platoons and split up trucks when required. This thing could help companies in a lot of ways, including

  • reduced shipping time 
  • Delivery of a huge volume of shipment in lesser time. 
  • Less labor forces

 Hurdles

A lot needs to be done to bring autonomous vehicles on the road. Companies looking for autonomous driving solutions should be ready to 

  • invest in research
  • Look for demand-based improvements
  • Follow international guidelines 
  • Beta testing
  • Hiring experts to execute technology, etc.

Other challenges could include

  • The proper training to utilize the technology 
  • It’s the ability to replace workforce labour
  • Strategic shift

Importance of Training

Advancement in technology and broad testing with new working models have led to a supply chain transformation. Many organizations have proposed they face problems due to lack of talent.          

Data analytics has helped companies a great deal to learn about customer’s behaviour. The supply chain officers need to be aware of this knowledge and respond to the collected data efficiently. It could help them efficiently 

  • Learn predictive behaviour
  • Manage Inventory 
  • Plan sales 
  • Mange transportation 

Training could guarantee that your workers are prepared to confront challenges. For instance: with the new skill advancement program at Supply Chain Academy, workers will acquire top to bottom digitalization experiences and investigation in Supply Chains giving the company a competitive edge in the market.

We need to concede that supply chains aren’t generally productive. However, let’s face it; there’s consistently opportunity to get better.

Conclusion

Automation is often criticized for replacing humans or eliminating many jobs. However, including automation in supply chain operations makes the jobs more efficient and secure. This technology can take over repetitive and high-risk employment and focus on things that require their attention more.

About the Author: –

Danielle Gregory

Danielle Gregory is a full-time Writer, Traveler, and Marketing Expert who is Currently Working for QAFILA. Danielle’s writing relates to a range of subjects such as logistics and IoT. Besides writing, she enjoys travelling, Cooking, and Riding.

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