AI through the lens of sustainability in logistics and supply chains
A recent FCAI Industry and Society webinar dived into the future demands and challenges in sustainable logistics and supply chain management. Many aspects of sustainability, the role of AI, and data in supply chains were discussed. This article highlights a few key thoughts from presentations and discussions. Click this link to see all the recordings and materials from the webinar.
In his talk about the challenges of future supply chain management and possibilities of AI, research team leader Ville Hinkka from VTT saw many opportunities. However, he raised the concern that there are not enough economic incentives for the supply chains to invest in sustainability. “The companies may be short-sighted and afraid of losing their market share or margins when investing in new, potentially more expensive radical innovations.”
For instance, there may be conflicting interests within the supply chain, as described by Aki Elovehmas, Lead Data Scientist from RELEX: “Food waste is a big cost for food retailers; however, for food suppliers, cutting the waste reduces the sales.” RELEX develops forecasting and supply chain optimization solutions for consumer goods value chains.
When it comes to the requirement of taking sustainability seriously, Kalmar Global has been feeling it for a while already. They have seen the increasing pressure from the public and customer side, from investors and the developments around legislation. Also, the internal pressure of the organization has been growing, as the sustainability image of the company affects recruitment.
The change for Kalmar has been huge. “During the past ten years we have had to alter our organization, gain totally new competencies, onboard new people and subcontractors as well as build different kinds of networks,” said Pekka Yli-Paunu, Director of Automation Research at Kalmar.
These changes alongside the investments in data have given Kalmar a strong basis to develop new services and implement ideas much faster than before.
“Because the global changes around us are happening quite fast nowadays, we have recently invested quite a bit on foresight work to really predict the next big steps,” continued Yli-Paunu.
Professor Laura Ruotsalainen from the University of Helsinki and FCAI brought up the idea of using simulations in analyzing systemic changes and seeing the consequences on a larger scale.
“One of the main strengths of AI is that it enables simulations that can help in evaluating the effects of changes,” Ruotsalainen elaborated. “In FCAI there is ongoing research to use reinforcement learning methods in developing simulations.”
At the end of the webinar, professor Ville Kyrki from Aalto University and FCAI summarized by saying that automatic planning and optimization as well as autonomous systems are already widely and successfully deployed in supply chains. Additionally, there are already many new AI tools that could be tried and used to improve the current applications and sustainability of operations.
So, the AI journey has begun, and it keeps on developing and progressing in many fields.
The main bottleneck in using AI and data seems to be the challenge of collaboration, especially in terms of data. There are many areas where more widespread sharing of data would help actors in different parts of the supply chain, but we still need to develop better models of collaboration to distribute the profits across all the collaborators.