Digital and AI in Transport Logistics Explained

1 Shares

When we ran a workshop on the uses of Artificial Intelligence (AI) in Supply Chain & Operations Management at last year’s CILT Conference in Windsor, transport logistics was mentioned as one of the areas where AI is being deployed by manufacturers, aftermarket service and logistics companies.

This strategic move not only enhances operational excellence but also significantly boosts customer satisfaction and loyalty.

Here’s a look at how modern AI tools are helping manufacturers to grow and develop their aftermarket opportunities.

Current Uses of AI

As well as the general uses of AI that we discussed, such as:

Telematics;
Internet of Things (IoT);
Digital blockchain ledgers;

there were others that were specific to the transport and logistics industry. Examples included:

Designing and planning transport routes;
Vehicle load optimisation;
Matching vehicle routes to charging points for electric vehicles.

Download the free Aftermarket Growth Guide for OEMs

Benefits of AI and Digital Transformation

Many of the benefits that early adopters of digitalisation technology are enjoying are those typical of digital transformation generally.

However, AI is a new kind of digital technology which IBM defines as:

“Technology that enables computers and machines to simulate human intelligence and problem-solving capabilities.”

So let’s explore some of those benefits…

1. Cost Savings

Digital transformation enables much larger amounts of data to be analysed in faster time than is humanly possible.

AI allows the data capture and analysis to be automated, thus reducing the amount of labour cost involved in the process.

Labour time, fuel costs, vehicle maintenance costs, etc. are further reduced from optimising transport routes, avoiding unnecessary journeys and optimising vehicle loads.

2. Increased Efficiency

Process automation, logistics optimisation and labour reduction increases efficiency.

AI can enhance this further through the real-time visibility of issues, opportunities and removal of human errors.

This reduces the need for people resources as your business grows.

As well as reducing the knock-on costs of HR resources, people management overheads, unions and so on.

If you want to know how to do this for your business, book time with me here

3. Improved Customer Service

Digital web and mobile AI solutions enable personalised recommendations to be offered.

This helps you to meet increasing customer expectations for fast, transparent delivery, thereby building more trust.

Customers can also track their own orders/deliveries and communicate issues promptly.

Interestingly, AI chatbots provide instant self-service support around the clock, when people may not otherwise be available.

This avoids the reduced customer satisfaction that often occurs when overseas call centres are used instead.

AI-driven dynamic pricing tools can analyse market conditions, competitor pricing and customer behaviour enabling real-time price adjustment at the point of sale.

This ensures your business remains competitive whilst maximising your revenue and profitability.

Furthermore, AI can help design targeted promotions and discounts based on customer segments and purchasing patterns.

By offering personalised promotions, manufacturers can stimulate demand and drive sales to create a win-win situation for your business and its customers.

If you could offer personalised promotions, do you think customers:

would pay more for your offerings?
would be more likely to recommend you to others?
would re-purchase more and/or more often?
would show more loyalty to your business?

Hence, improved customer service, dynamic pricing and personalised promotion are major benefits of digital/AI adoption.

4. New Business Models

In some industries, digital/AI transformation has spawned new business models.

Autonomous trucks, last-mile drone deliveries and digital freight marketplaces for trading excess capacity are some obvious examples.

It also seems like new ones are emerging every day – it is hard to keep up with the fast rate of AI progress.

Challenges of Digital and AI Adoption

Change and new opportunities always bring new challenges.

Some of those mentioned in our conference session were typical of those we see when implementing a modern ERP or supply chain management system.

Especially when that implementation is in a business that is not yet computerised, beyond the use of personal computers.

These challenges often include:

Replacing outdated legacy systems and IT infrastructure;
Resistance to change;
Re-training the workforce in the use of new systems;
Ensuring that the data used is cleansed and of the best quality.

However, as AI replaces human interactions in a new way, it brings additional challenges.

Trusting new AI tools;
Authenticity of non-human responses;
Unintended bias;
Protecting confidentiality and brand image clashes.

As someone who has been performing digital transformations for many companies and industries since the 1980s, these are challenges that I see growing in importance.

Dangers of Using AI

Using modern AI tools and processes also brings new dangers that you need to be aware of and protect against.

These include:

Losing the uniqueness of human involvement;
Loss of expertise due to fewer staff;
Bias of various kinds;
Cyber security issues;
Becoming overly dependent on the use of AI.

Moving Into the AI World

Satisfying customers who demand lower costs, 100% equipment uptime, localised service and a branded service experience is challenging.

Digital transformation and AI have become a major opportunity (or problem) for manufacturing, aftermarket and 3^rd Party Logistics (3PL) companies.

It’s a major opportunity if you are embracing the new digital/AI technologies.

But it’s a huge problem if you are still trying to run your business with outdated systems, processes, people skills and organisation solutions!

And it is time you flipped that huge problem into an opportunity!

Success requires rethinking, updating, reconfiguring and reintegrating your business processes, systems, people and logistics service partners across your global, end to end, support chain.

So ask yourself:

To what extent are you using AI in your business today?
How big is your AI opportunity?
Is it time to embrace digital and AI more fully?

How Servispart Consulting Can Help

Our aftermarket growth service is called Aftermarket 360™ and is specifically designed to assess your aftermarket capability strengths and weaknesses to create an aftermarket growth strategy that delivers high impact results in minimum time.

This has always included the latest thinking on digital transformation but now includes the latest thinking on AI adoption too!

If you’d like an informal conversation about how you could develop your aftermarket strategy and improve your aftermarket growth with digital and AI, click here to get in touch.