This Week in Logistics News (July 16-20, 2018)

The closer my vacation date gets, the more work piles up for me to get done before I leave. How does that happen? Is this a law of physics that Sir Isaac Newton somehow overlooked?

Okay, focus Adrian.

Without delay, here’s the supply chain and logistics news that caught my attention this week:

Walmart and UPS: Using AI and Machine Learning to Work Smarter

“Work smarter, not harder.”

It’s not a new saying, but it’s found new currency in today’s hyper-competitive and dynamic business environment. And smarter today generally implies leveraging artificial intelligence and machine learning to analyze massive amounts of data to reveal insights about your business and operations, resulting in faster and more informed decisions.

This week, for example, Walmart announced “a strategic partnership with Microsoft Corp. to further accelerate Walmart’s digital transformation in retail, empower its associates worldwide and make shopping faster and easier for millions of customers around the world.” Here are some excerpts from the press release:

Walmart is already using Microsoft services for critical applications and workloads and is now embarking on a broad set of cloud innovation projects that leverage machine learning, artificial intelligence, and data platform solutions for a wide range of external customer-facing services and internal business applications.

There are also massive benefits to operating at scale as Walmart builds a global IoT platform on Azure – from connected HVAC and refrigeration units to reduce energy usage in thousands of U.S. stores or applying machine learning when routing thousands of trucks in the supply chain [emphasis mine].

“Walmart is a people led, tech empowered company, and we’re excited about what this technology partnership will bring for our customers and associates,” said Doug McMillon, Walmart CEO. “Whether it’s combined with our agile cloud platform or leveraging machine learning and artificial intelligence to work smarter [emphasis mine], we believe Microsoft will be a strong partner in driving our ability to innovate even further and faster.”

In related news, Sara Castellanos at the Wall Street Journal reports that UPS “is working on an ‘ambitious’ analytics and machine learning project to gather and consolidate data from various applications within the company’s logistics network to better predict package flow, volume and delivery status.” According to the article:

The predictive analytics tool, which has been in development for about eight months, will gather and analyze more than 1 billion data points per day at full-scale, including data about package weight, shape and size, as well as forecast, capacity and customer data.

It will give staff more accurate forecasts about the package volume that needs to be processed at UPS facilities on any given day, [Juan Perez, chief information and engineering officer at UPS] said. That will give employees enough lead time to determine whether they need more resources at package and sorting facilities in the event of a higher-volume day.

Interestingly, while Walmart has taken the partnership route to drive innovation on this front, UPS is taking the “build it ourselves” approach. As reported in the article, the UPS analytical tool is being “developed by an in-house team of developers using the agile software development method.”

Where are the name-brand supply chain software and enterprise software vendors in these efforts? Maybe they’re involved in some ways behind the scenes, but it appears that when it comes to the types of initiatives companies like Walmart and UPS are undertaking, there are no off-the-shelf AI and machine learning solutions that meet their needs at the moment. You either have to develop a strategic partnership with a technology company to co-innovate together or rely on your internal resources to build your own solutions.

What’s Wrong with Just Going to the Grocery Store?

I am the son of a bodeguero, and I worked at my family’s bodega as a kid and teenager. Back then, shopping at the bodega was a social experience, a way to connect with neighbors and the community. The aisles were loud with conversation and laughter, and everybody knew my name and I knew theirs.

Today, going to the grocery store is like going to the dentist for a root canal — at least that’s the reputation it’s gotten (or given), which is driving entrepreneurs to develop business models (e.g., home delivery, click and collect) to eliminate the need to ever step foot in a grocery store again.

For example, check out what Takeoff Technologies is developing. As reported in Fast Company“Boston-area startup Takeoff Technologies is developing what it calls micro fulfillment centers — small, heavily automated grocery distribution facilities that could be located inside existing supermarkets and used to quickly assemble orders for delivery or customer pickup.”

This video shows the concept in action:

Or you can just invest in making the in-store shopping experience more enjoyable, which includes hiring enough (smiling) people with the right knowledge and skills to help you navigate through the (wide) aisles more efficiently.

But what do I know, I’m just the son of a bodeguero.

And with that, have a happy weekend!

Song of the Week: “Saturday Sun” by Vance Joy