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How Augmented Reality is impacting logistics

6 minutes | 19 Dec 2018

Concept showing augmented reality and smart logistics in the supply chain

Augmented reality (AR), does what it says on the tin: it augments the real world. Using a screen and camera, it superimposes a digital image onto the real world around you. If you remember the frenzy around Pokémon Go, which dropped elusive monsters into various environments, then you’re already familiar with what it can do.

Given Augmented Reality’s capabilities, it shouldn’t be a surprise that logistics has been one of the early adopters of this technology, specifically in the form of glasses, and their use is expected to keep growing. According to an ABI Research report, shipments of smart glasses for logistics will reach US $4.4 billion in 2022.Given Augmented Reality’s

Why the growth in AR?

AR can give logistics providers quick access to information anytime, anywhere. This is critical for the prospective and precise planning and operation of tasks that include delivery and load optimisation. It also enables providers to offer higher levels of customer service. Here’s a look at specific areas that AR especially affects.

How does AR apply to logistics?

It serves several functions, of which we’ll take a closer look:

- Warehouse operations

- Transportation optimisation

- Last-mile delivery

AR in warehouse operations

In the logistics value chain, warehousing operations are estimated to account for about 20% of all costs, according to DHL. The task of picking accounts for 55% to 65% of the total cost of warehousing operations. This is why many companies rely on automation, such as amazon who uses 100,000 robots worldwide – the cost savings can be significant.

Most companies have no need for that technology at such a scale. Some of them, in fact, still use manual processes: a picker carries the paper orders around the warehouse and picks the items needed from bins.

Not only is carrying around papers cumbersome and inefficient, but the margin for error can be costly. For instance, if the wrong items or quantities are picked, and the workers at the pack bench don’t notice, the package is dispatched to customers who’ll require a refund or replacement.

Granted, the pick-by-paper error rate is very low, according to DHL, estimated at a rate of 0.35 % – but that’s not the point. Every error must be avoided because of the costs involved in rectifying each mistake. Those costs include shipping and returns costs, repicking the correct items – so more labour costs – and then, of course, customer service work is needed to soothe angry or, at best, disappointed customers.

Lady looking at virtual graphics through smart glasses

How AR gets it right

In 2017, DHL reported some interesting test pilot results with vision picking. They equipped pickers with wearables: advanced smart glasses, which displayed digital picking lists in their field of vision. Viewing their orders was only a matter of shifting their eyes to view those lists on their smart glasses. Those smart glasses also saved them valuable time by showing them the most efficient route to where they needed to go to pick their items.


Not only did the advanced smart glasses’ guide workers to the right area, they also check if the workers were where they should be, and then guided them to the right shelf. The workers scanned the item with the smart glasses’ automated barcode, which simultaneously registered this process in the Warehouse Management System (WMS). This, in turn, provided real-time stock updates.

The results were stunning over the three weeks the test took place. Ten order pickers fulfilled 9,000 separate orders by picking more than 20,000 items. Workers hands were freed from carrying paper, so they could work easier and faster.

Productivity improved by 15% while the number of errors fell by 40%, increasing the overall picking efficiency by 25%. The advanced smart glasses were also tested in training pickers, with on-boarding and training times falling by 50%.

AR in warehouse planning

Warehouse-planning processes can also benefit from Augmented Reality. For example, warehouses are often used as storage and distribution hubs, where value-added services are performed. These services include product assembly and labelling, repacking and repair. Space must be redesigned to accommodate the performance of these tasks.

This is where AR comes in. It can help visualise in full scale how new interiors could work. Rather than relying on scaled drawings, planners can see modifications in place and design new workflows.

AR in transport optimisation

Augmented Reality could also enable logistics firms to optimise:

Completeness checks

Traditionally, collectors have to manually count their pick-ups or if they’re lucky, use a time-consuming handheld device to scan barcodes. Imagine how much faster a wearable AR device could do the completeness checks. Scanners and 3D-depth sensors could tell you the number of pallets or single parcels or, using measurement devices, their volume.

‘This measurement is compared to predefined values and the result – hopefully a match – will be displayed to the collector, says DHL. ‘This AR system could also scan items to detect any damage or faults.’

International trade

With emerging economies comes the challenge of managing transport flows around the world and different trade regulations and requirements. Here again, AR could offer an efficient solution to facilitate international trade by ensuring that shipments comply with the relevant import and export regulations, and that trade documentation is as it
should be.

How? An AR device could scan the relevant documents or goods, looking for key words. The device could propose necessary amends or correct the commodity code classification. AR could also reduce port and storage delays after shipment by translating labels, documents and trade terms in real time.

Driver navigation

According to the European Commission, traffic congestion costs Europe about 1% of gross domestic product (GDP) each year. In 2017, traffic congestion hit the U.S. to the tune of $305 billion. Keeping drivers and their shipments on the move requires route optimisation with real-time traffic data. Augmented Reality can make this easy, either with glasses or a windscreen display putting useful information in the driver’s field of vision. This is effectively the evolution of GPS/Sat Nav.

In future, we will see increasing use of dynamic traffic support with real-time traffic data to optimize routes or re-route shipments on the fly. AR driver assistance apps (either with glasses or a windshield display) could be used to display information in real time in the driver´s field of vision. In effect, AR systems will be the successors to today’s navigation systems, with a key advantage that the driver doesn’t have to take their eyes off the road.

Freight loading

These days, data and planning software are part of the loading process. Content, weight, size, destination and more processing for each item are all issues to consider. Despite these advances, the holdup is usually the loading itself.

Where Augmented Reality can make a difference is by replacing the printed cargo lists and load instructions. As DHL explains it, “At a transfer station, for example, the loader could obtain real-time information on their AR device about which pallet to take next and where exactly to place this pallet in the vehicle. The AR device could display
loading instructions, with arrows or highlights identifying suitable target areas inside the vehicle. This information could be generated either in advance by planning software or on the spot by ad-hoc object recognition.”

The key advantage here is that current paper-based lists are static, while AR-supported cargo lists allow for real-time changes, which speeds up the entire process.



AR and last-mile delivery

The global market for parcel deliveries hit U.S. $350 billion in 2017, according to Apex Insight, up from $310 billion the previous year. North America and Europe combine to account for 50% of deliveries. While the U.S. leads in market value, China has already surpassed them in volume. According to McKinsey the biggest driver is coming from e-commerce, which has seen the B2C segment surpass B2B. Consequently, customer demands are now ‘re-shaping’ last-mile delivery.

Boxes on a conveyor in a warehouse

E-commerce players for both B2C and B2B deliveries have cited last-mile services – the final step in the supply chain – as the key differentiator that impacts their success. Last-mile delivery also tends to be the most expensive part, amounting to up to 28% of a product’s total transportation cost, says Supply Chain Dive. The reasons have to do with warehousing and fulfilment, and that’s before you even get to fuel, vehicle and labour costs.

The real-time visibility that Augmented Reality devices is critical here. It can optimise last-mile delivery and cut product costs, thereby increasing profit.

What’s driving drivers?

According to DHL, drivers spend between 40% and 60% of their time looking for the right boxes within their vehicles for the next delivery. How do they typically find the boxes their looking for? They depend on their memory of the loading process.

Here’s what AR devices could do to help drivers:

1. Give the information they need about a particular parcel while still at the distribution centre. That information could tell them everything they want to know:
- Parcel’s weight

- What it actually is

- Delivery address

- If it requires special handling to avoid damage

2. Calculate the space needed for parcels in real time
3. Scan the vehicle for the perfect empty space and indicate where the parcel should be put, based on an optimised route.

Less damage

This is intelligent loading, making the process more efficient and drop off faster. AR could even reduce the number of parcels that are damaged because the driver had to put them on the ground or hold them under their arm in order to close the vehicle door. Instead, the driver could use an AR device to give a voice instruction or simply gesture with their head.

Help finding the right building

Buildings and entrances are sometimes obscured or hidden or not even obvious. Think how easy it would suddenly be if a driver needed only to point an AR device at a building or series of buildings and instantly get information such as Google Street View and details from other databases. The AR device could even build its own database to make it easier on other drivers who can rely on that information. It could even help with indoor navigation, which GPS/Sat Nav can’t do because of signal interference.

The AR device could even build its own database to make it easier on other drivers who can rely on that information. It could even help with indoor navigation, which GPS/Sat Nav can’t do because of signal interference.

Vehicle repairs

Finally, there is yet another possible application for Augmented Reality in logistics. Consider that in the U.S. alone, 8.7 million people are employed in the transportation industry, with a large proportion being truck drivers, Freight Wave reports.

Breakdowns are costly in terms of both time and money. Rather than wait for a skilled technician, an AR device could give the driver basic instructions to fix minor problems themselves. For instance, with AR smart glasses, the driver can get a visual assessment of the fault and visual instructions for what to do. True, it’s a stop-gap solution, but one that could save considerable costs.

logisitcs under influence