The symphony of data: How AI harmonises modern logistics

Not so long ago, the logistics industry viewed data as little more than a byproduct of its day-to-day operations. It was only with the advent of truly advanced computing that this mindset began to change. Ahead of our upcoming in-depth report on the subject, the following is a summary of how artificial intelligence (AI) is orchestrating data to transform how we work. 

Today, the best logisticians recognise that data is the key to moving from the old reactive model to a unified and smart supply chain management (SCM) system that responds to problems as, or even before, they arise. Data, in short, is essential to the next evolution of the full-service logistics industry.  

“In many cases, the information has almost as much value as the product,” notes Eric Siebering, Supply Chain Innovation Director at FM Logistic. “For the customer of our customer, what is important is the ability to know when a product is arriving so they can manage the situation in the event of delays.”

Current estimates show that around half of all companies lack end-to-end visibility, a gap that costs an estimated $184 billion annually. This lack of mission-critical data is the single biggest bottleneck to achieving supply chain excellence. 

Information is often trapped in disparate legacy systems, requiring slow and manual methods to make sense of it. Logistics operators that can replace these bottlenecks with fast, automated systems that leverage AI will be the success stories of the future.

“Data is really the key to everything, especially for artificial intelligence,” says Jean-Pierre Le Pogam, AI Project Manager at FM Logistic. “We could have lots of data, but if everything is sourced poorly, we can’t do anything with that. So, data quality is also key.”

FM Logistic sees this transformation process as having three distinct phases:

To illustrate how these tools aid operations at warehouses, Florent Martin, Data & AI Manager, FM Logistic explains: “We use an algorithm to optimise the picking path on the warehouse floor. For instance, if a customer orders shoes, there is a high probability that they will also order socks, so on the floor, you keep them together. If you optimise the path, you optimise time, and you optimise productivity.”

But is this triple-phased evolution really needed? After all, anyone can use AI, and many already do. There is, however, a difference between using AI superficially for episodic pieces of advice or as a glorified search engine, on the one hand, and integrating it deeply into workflows to deliver long-term efficiencies on the other. 

FM Logistic takes the second approach, including deploying AI models like Vertex AI from Google, to analyse transport proof of delivery (POD) documents. Our AI models extract handwritten dates from the documents, to compare them with the records in the system. This ensures compliance and the detection of potential discrepancies while allowing human agents to focus on complex problem-solving rather than rote data retrieval.    

“We are also building on our platforms like My-SCM and Control Tower to make sure that we don’t end up using AI in an improvised or ad hoc way, but rather as a compounding driver of business value that supports our asset-light strategy,” Florent Martin notes. “For that, the underlying data lake must be deep and crystal clear, and our technology base sophisticated and scalable.” 

Noting that FM Logistic operates on an asset-light model, Eric Siebering points out: “We are managing the network, but it’s not our own network. It is a network of our partners. We are buying what we need and we are managing this network for the customer, which is more cost-effective and presents fewer problems.”

Quality of information determines the quality of execution in the digital economy. Companies that embrace a centralised, analytics-first platform can transform their supply chain from a necessary operational cost into a future-ready profit centre.

Organisations that strategically leverage the flexibility of an asset-light 3PL model alongside smart SCM platforms can turn operational challenges into a distinct competitive advantage. And the timing of this transformation will be equally crucial. 

As Eric Siebering notes: “AI is going to be a game changer to help us manage supply chains in a sustainable way… But one key differentiator will be integrating new technologies at the right time. Because the technology has to be at the right level of maturity to work well at scale.”