Editor’s note: William Salter is CEO of Paragon
Software Systems. The views expressed here are solely his and do not
necessarily reflect those of FreightWaves.
Huge new strides
in technology mean computers can do the heavy lifting of processing data and
filtering for exceptions, freeing up humans to do what bits and bytes can’t –
make nuanced, strategic decisions crucial to running and growing a business.
But, for an ideal result, computers and humans need to work closely in tandem.
The buzz around
what artificial intelligence (AI) will bring to the world of freight and
logistics is ubiquitous in the media and at industry conferences. So much is already possible. Light detection
and ranging (LIDAR) and Global Positioning System (GPS) technologies, combined
with AI software, are making self-driving vehicles such a looming reality that
the U.K. organization Zenzic predicted in November that, by 2027, there will be
no need for road signs. Radio frequency identification (RFID) and
Internet of Things (IoT) devices can alert a supply chain manager in Ohio, in
real time, that his shipment of frozen chickens in the Netherlands has strayed
beyond a safe temperature range or that the container security seal has been
breached.
Online platforms
are already making freight requests for proposals (RFPs), bids and spot-rate
buys more data rich, efficient and fast. The vast data-crunching power of
servers, or even your average laptop, means that route planners can solve in
just a few minutes the complex challenge of figuring out the most efficient
routes for dozens – or even hundreds – of trucks carrying out dense, multi-drop
deliveries.
But it’s not about
the technology alone. In order to make the most of these astonishing new
capabilities, we need to embrace a future in which AI supports and enables
human intelligence, bestowing upon us mere mortals what amounts, in many ways,
to superpowers. This is more properly called intelligence augmentation (IA) – the
magic that happens when sophisticated software and hardware give us abilities
to act faster and smarter than we can without them.
Forbes magazine
describes IA as “an alternative conceptualization of artificial intelligence
that focuses on AI’s assistive role in advancing human capabilities.” Described
by IBM, IA “enables cognitive collaboration, rapid co-learning … between
multiple stakeholders and subject matter experts where the computer is an equal
participant.”
In the sector of
the logistics industry that has occupied me for the last 30 years – delivery
route optimization – computer intelligence has brought transformative change.
Route planning used to be, by necessity, a laborious and inexact process,
involving pieces of paper pinned all over a map or at best a behemoth of a
spreadsheet. Teams of route planners worked long and hard, often late into the
night, to do the best job they could of figuring out the least-inefficient way
of sending multiple trucks and drivers from different origin points to dozens
or hundreds of delivery locations. Sadly, despite easily implemented and
affordable technology that automates the process, many still do.
With this old
methodology, even when a good-enough plan is set, it can fall apart before the
first truck leaves the depot because the dispatcher might find a driver is
unavailable. Or it can become unworkable as the driver finds he or she is about
to blow hours of service (HOS) restrictions. Or a customer wants to change or
generate a new order after the plan is created, throwing it all up in the air
again. From the advent of modern computing, the emerging technology presented itself
as a near-magical solution to these problems.
We started with
computer algorithms that could quickly and easily run millions of different
route combinations and come up with a plan that took the least time to complete
all required deliveries, then spin it all up again in a heartbeat when there
were last-minute changes. Then we added in the ability to incorporate myriad
other parameters that create delays and complexity – preferred delivery time
windows, average road speeds, average time needed at delivery locations,
congestion zone restrictions, driver HOS status, driver special skills – the
list keeps growing.
At every turn,
we’ve been able to get closer to an absolutely optimized route plan for our
customers’ delivery fleets to follow. We’ve turned route planning into a
science.
Does that mean we
are close to getting rid of humans when it comes to planning and managing
deliveries? No, it does not. What it means is we are providing the people in
charge of this crucial operation with the intelligence needed to make smart,
sometimes bold, business decisions that propel the business forward.
We’ve watched our
customers gain so much confidence
in their ability to rapidly plan routes that they’ve been able to extend the
order cutoff deadline for next-day delivery, gaining a powerful advantage over
rival distributors while still being confident that the warehouse can pick the
orders in time. We’ve seen customers close down expensive distribution centers (DCs)
they didn’t need or move to DCs in locations that made much more sense
operationally. Several customers have been able to expand to serve new regions
with existing resources, enabled by business modeling tools that allow them to
use actual data to understand the impact of this and many other changes. These were
all the result of strategic decisions made by humans, requiring deep knowledge,
judgment and big-picture thinking but, crucially, aided by computer programs
that could calculate every conceivable impact of doing things differently.
The wider benefits
of route optimization software, in the end, spring not purely from the number
of miles or minutes you can trim from delivery operations or how much fuel you
can save or how many more destinations you can fit into a multi-stop run. The
greater advantage comes when human brains are freed from the time-consuming
drudgery of planning what trucks go where, when and how. Routing software cuts
the planning process from hours to minutes. When transportation professionals
go from laboring over spreadsheets to pondering how to leverage better data to
truly delight customers, the business – and the customer – wins. It also
enables significant strides in sustainability through massively increased
efficiency.
The advent of
affordable automobiles didn’t just allow people to get to work faster; it
generated the Interstate Highway System, suburban living and drive-in movies.
The internet does more than allow people on opposite sides of the planet to
have a conversation; it has resulted in crowdsourcing cures for cancer, catching
international criminals and giving access to university education to people in
remote villages.
The real value of
technology is in what humans can do with it. In the logistics industry, IA is
set to transform how we do business – the only limit is our failure to imagine
what can happen when technology empowers humans.
