The River Logic Blog

The Autonomous Supply Chain: Possible or Impossible?

Aug 17, 2017 River Logic logistics, Supply Chain

In the press, a great deal of attention is given to the concept of using drones to deliver parcels direct to people's homes as well as the use of autonomous delivery vehicles on the road. As exciting as these concepts are, a lot more work is needed before they are mature enough for large-scale implementation.

Nevertheless, the concept of autonomously delivering products is slowly starting to become a reality. While there are many hurdles to overcome before the point is reached where there's no human intervention in the supply chain, there are many industrial examples that indicate it's feasible and practical.

Definition of an Autonomous Supply Chain

An autonomous supply chain should have the capability to process a request to fetch a component from its location and to autonomously deliver this component to a specified delivery point, all without human intervention. Key elements of such a system include the ability to:

  • Interpret the request
  • Find the part's location
  • Load the part onto a transportation system
  • Identify the delivery point
  • Transport to the delivery point
  • Off load the part
  • Provide feedback to the supply system

If all steps are automated and do not require human intervention, then the supply system could be regarded as autonomous.

Is an Autonomous Supply Chain Feasible?

In a real-life situation, an autonomous supply chain needs to be able to process thousands of requests, often in a very short period of time. It also has to have the ability to find different components and transport them automatically to multiple delivery points.

From this definition, it's clear there has to be a high degree of order and standardization. Additionally, the entire process needs to be supervised by sophisticated software incorporating a comprehensive database that knows the location of every part and delivery point. It has to be able to compute the best route to the delivery point and to avoid congestion.

Provided these conditions can be met, an autonomous supply chain is feasible. There are many examples where such systems can be found. What is still far from feasible is an autonomous delivery system that's able to work outside of a rigidly controlled environment. For example, the technology does not currently exist for a robotic system to visit a grocery store, pick up a bag of apples and take it home to its owner.

Internal Supply Chain Autonomy Is Already Here

Manufacturers have been using MRP and ERP for many years to organize and control their manufacturing processes. These systems possess the raw intelligence needed to identify the parts required to assemble a complete article, such as an appliance or a motor vehicle. In fact, most systems are sophisticated enough to allow different products to be manufactured, in any sequence, on a single line.

Hence it was a relatively small step for manufacturers to organize automated and semi-automated delivery of components from the incoming goods warehouse to the production line, as and when required and in the correct sequence.

Tools used by such systems include:

  • Part identification: Machine-readable sensors and barcodes to physically identify components.
  • Robotic picking: Automated forklifts to locate and fetch items.
  • Intelligent transportation: The use of autonomous vehicles as well as transportation conveyors to deliver parts to specific locations.
  • Feedback: As components are used, automated orders raised for new components.

Obvious examples of such autonomy include baggage handling systems at airports and mail sorting systems. More advanced solutions include autonomous mining systems, autonomous delivery vehicles inside factories and autonomous conveyor systems.

External Autonomous Supply Systems

Most of the interest at present is on the autonomous delivery of goods from suppliers to customers. This is the realm of drones dropping parcels off on your lawn and platoons of trucks driving autonomously on highways.

Currently, all such systems are still in their infancy, especially in terms of mass deployment. Still, many exciting ideas are being evaluated. UPS recently tested a drone linked to a delivery truck that flew autonomously from the delivery truck to drop off a parcel and return while the truck continued on its route. Other exciting concepts include autonomous ships sailing the oceans and the use of autonomous delivery robots in U.S. cities.

The Importance of Autonomous Supply Chains

Although autonomous supply chain technology is fascinating and alluring, the move toward autonomous supply chains is really driven by four organizational needs:

  • Cost reduction: In lean manufacturing, every action that isn't directly productive is considered waste. The movement and delivery of goods adds no value and is always wasteful, so the use of autonomous vehicles and systems is beneficial because they reduce unproductive labor costs. Additionally, they limit the incidence of disruptive events such as vehicle accidents and breakdowns.
  • Increase efficiency: Autonomous systems don't need breaks, don't waste time and get the job done right.
  • Reduce errors: Autonomous systems make fewer errors than manual systems. The correct parts are always delivered to the exact address.
  • Faster response: A major goal of supply chain management is to reduce transit times because the longer it takes to deliver goods, the greater is the cost of carrying these goods. Autonomous systems are invariably faster than manual systems.

Future of Autonomous Supply Chains

While media attention is focused on the last link in the supply chain, that of delivery to the customer, autonomy embraces all the intermediate steps. Currently, the biggest advances have been achieved with internal logistics. This is where many companies still need to focus, because there are big gains to be made.

External forms of supply chain autonomy, which embrace autonomous delivery systems, are largely still in the future — but this doesn't mean they should be ignored. Those who initially develop workable autonomous delivery systems will lead the pack and profit at the expense of the rest.

Written by River Logic

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