Ever had something the size of a credit card delivered in a box that could house the whole telephone exchange? Jonnie Penn describes how AI is cutting packaging down to size, literally.
You order a new phone case online, and it arrives in a box bigger than your fridge. Then you have to dig through packaging material to find the case.
It’s a common experience. In fact, 73% of consumers have received packages that were twice as big as necessary.
Not surprising, 40% of the average shipping box is wasted space, according to one estimate.
Not only is it annoying, more than half 54% reported they would think twice before ordering again from a company that had excessive space in their packaging.
It’s frustrating for customers, it’s expensive for businesses and terrible for the environment. Since we’re all shopping online more, isn’t it time something was done?
Luckily, technology has the answer.
One company, PackSize, created a machine that automatically detects the item you’re shipping, then folds a cardboard box to the perfect size.
That means more boxes per truck for a more efficient load and less carbon footprint.
And the right-sized boxes cut down on packing materials, saving USD $0.50 materials per box. Goodbye plastic air pillow packaging!
Smarter boxes also means better protection and less damage, says PackSize.
That’s important when the average package is dropped 17 times before it arrives.
How does it work?
PackSize combines clever automation with artificial intelligence (AI). It assesses the size of a product, then chooses the best fit from hundreds of possible box dimensions.
It’s just one way AI is changing our industry for the better.
In fact, McKinsey identified supply-chain management as one of the top sectors that will benefit from significant cost decreases due to AI.
Where exactly will these changes be felt? The 2019 Global AI Survey isolated spend analytics, logistics-network optimisation and sales and demand forecasting as three areas in which AI high performers have reported savings in the supply chain sector.
Customer demands are changing
The idea of this highly sophisticated technology might seem scary.
A lot of people in supply chain are worried about the robots taking their jobs. But actually, technology is needed to meet the changing consumer demand.
“Customers want products and services in their hands more quickly; they expect a more personalised experience and all this at a lower cost,” says Vikram Murthi of Llamasoft.
“Which means more customised products and services, faster order fulfillment times and super efficient delivery. This will require an entirely new way to architect, design and manage supply chains across broader ecosystems, new technologies and new roles and skill sets.”
How AI is changing supply chain
Everyone throws around terms like AI, but what does that actually mean for supply chain?
“Tech leaders herald artificial intelligence as ‘the next electricity’ or fire,” says Jonnie Penn, an artificial intelligence expert at the University of Cambridge and keynote speaker at the 2020 Big Ideas Summit.
“These bold claims convey that AI will be disruptive, but not why or how such technological change will unfold. “
AI at work
That’s why AI makes most sense when you see it in action, Penn says.
Like Attabotics, a Canadian company specialising in high-density vertical storage using machine learning and 3D robotics.
Their compression system reduces warehouse footprints by up to 85%, a reimagining that promises new micro-fulfillment centers around the globe.
Or Caterpillar using ship-board sensors to calculate that cleaning the hulls of their eight ships more frequently (e.g. every six months rather than every two years) reduced drag and minimised energy waste.
“That insight saved them five million dollars per year,” says Penn.
Saving the planet
Clever application of AI could also go a long way for sustainability.
“Since 80 percent of greenhouse-gas emissions are due to supply chain management, this pressure will not abate in the decade to come,” Penn says.
“Even small gains made through AI could mean large steps towards the UN’s 2030 Sustainable Development Goals.”
Jonnie Penn is a Rausing, Williamson and Lipton Trust doctoral scholar researching artificial intelligence at the University of Cambridge. Follow him on Twitter at @jonniepenn