{"id":21340,"date":"2017-11-12T00:15:42","date_gmt":"2017-11-12T05:15:42","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-rctom\/submission\/augmented-reality-a-game-changer-in-dhls-logistics\/"},"modified":"2017-11-12T12:49:28","modified_gmt":"2017-11-12T17:49:28","slug":"augmented-reality-a-game-changer-in-dhls-logistics","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/augmented-reality-a-game-changer-in-dhls-logistics\/","title":{"rendered":"Augmented Reality \u2013 a Game Changer in DHL\u2019s Logistics?"},"content":{"rendered":"<h3><b>Logistics Market &amp; the Arrival of AR<\/b><\/h3>\n<p><span style=\"font-weight: 400\">After DHL\u2019s attempt to acquire Dutch parcel company TNT Express failed due to antitrust concern, EU approved its competitor FedEx\u2019s acquisition of TNT in early 2016, which not only significantly increased FedEx&#8217;s penetration in Europe, but also it was put almost alongside UPS in terms of market share.<\/span><\/p>\n<p><figure id=\"attachment_21328\" aria-describedby=\"caption-attachment-21328\" style=\"width: 637px\" class=\"wp-caption aligncenter\"><a href=\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2017\/11\/BT-AG302_FEDEXT_9U_20160108173908.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\" wp-image-21328\" src=\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2017\/11\/BT-AG302_FEDEXT_9U_20160108173908-300x183.jpg\" alt=\"\" width=\"637\" height=\"389\" srcset=\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2017\/11\/BT-AG302_FEDEXT_9U_20160108173908-300x183.jpg 300w, https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2017\/11\/BT-AG302_FEDEXT_9U_20160108173908-600x365.jpg 600w, https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2017\/11\/BT-AG302_FEDEXT_9U_20160108173908.jpg 700w\" sizes=\"auto, (max-width: 637px) 100vw, 637px\" \/><\/a><figcaption id=\"caption-attachment-21328\" class=\"wp-caption-text\">Logistics Providers Global Market Share [1]<\/figcaption><\/figure><span style=\"font-weight: 400\">In logistics value chain, warehousing operations are estimated to account for about 20% of all logistics costs, and the task of picking accounts for 55% to 65% of the total cost of warehousing operations[2].<\/span><span style=\"font-weight: 400\"> DHL saw the potential to significantly reduce cost by improving the picking process with Augmented Reality, which can also help with the training of new and temporary warehouse staff who usually require cost-intensive training to ensure they pick efficiently and without making errors.<\/span><\/p>\n<p style=\"text-align: center\"><iframe loading=\"lazy\" title=\"Vision Picking at DHL - Augmented Reality in Logistics\" width=\"640\" height=\"360\" src=\"https:\/\/www.youtube.com\/embed\/I8vYrAUb0BQ?feature=oembed\" frameborder=\"0\" allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share\" referrerpolicy=\"strict-origin-when-cross-origin\" allowfullscreen><\/iframe><\/p>\n<p><span style=\"font-weight: 400\">In the Vision Picking pilot test, pickers are equipped with advanced smart glasses which visually display digital picking list in their field of vision and the best route, reducing their travel time by efficient path planning. The automated barcode scanning capabilities can check whether the worker has arrived at the right location, and guide the worker to quickly locate the right item on the shelf. Over the three weeks of the test, 10 order pickers succeeded in fulfilling 9,000 separate orders by picking more than 20,000 items. The resulting productivity improvements and reduction in errors increased the overall picking efficiency by 25%[3]<\/span><span style=\"font-weight: 400\"> and cuts on-boarding and training times by 50%[4]<\/span><span style=\"font-weight: 400\">.<\/span><\/p>\n<p><span style=\"font-weight: 400\">After completing a series of pilot programs across the U.S., Mainland Europe and the UK throughout different industries including technology, retail and consumer, DHL has now established Vision Picking as the solution for the long run, and they\u2019re looking into additional applications for augmented and virtual reality such as training, maintenance, dimension calculations, transportation optimization, last-mile delivery and more.<\/span><\/p>\n<h3><b>A Game Changer?<\/b><\/h3>\n<p><span style=\"font-weight: 400\">Augmented Reality is a nascent business technology and it is not a game changer \u2013 yet. <\/span><\/p>\n<p><span style=\"font-weight: 400\">Before AR devices (especially wearable ones) can be widely adopted in logistics, we need to overcome a number of technical and societal challenges including battery life, high investment cost, network performance issues, privacy, and public acceptance, etc.<\/span><\/p>\n<p><span style=\"font-weight: 400\">DHL Supply Chain should deepen collaboration with partners Google, Vuzix and Ubimax to refine the vision picking solution and raise awareness for the potential applications in the logistics industry. According to Dr. Matthias Winkenbach, an MIT researcher with a Ph.D. in economics, augmented reality needs to gain more traction in the consumer sector before hardware and software that would allow supply chain managers to visualize data in 3-D gets advanced enough to be used inside corporations.<\/span><span style=\"font-weight: 400\"> Makers of hardware devices tend to improve the technology for commercial use when it catches on in the consumer sector. For example, the iPhone excelled as a consumer product, and is now a business tool that\u2019s frequently used in the commercial sector[5]\u00a0.<\/span><\/p>\n<p><span style=\"font-weight: 400\">To further revolutionize the logistics business, DHL could implement a wide range of digital technologies \u2014 the cloud, big data, the Internet of Things, 3D printing, robotics, drones, and others. Together, they are enabling new business models, the digitization of products and services, and the digitization and integration of every link in a company\u2019s value chain. For example, once the proper products are picked, they will be packaged for shipment by robots that can handle a broad range of product sizes while taking into consideration data on the product and the customer\u2019s packaging requirements. Software will also control the internal warehouse environment, including setting the proper temperature, light, and humidity according to predefined requirements. By shutting off the lights and heat in areas where all the work is being done by robots and autonomous vehicles, for example, energy consumption can be reduced significantly[6].<\/span><\/p>\n<h3><b>More Challenges on the Horizon<\/b><\/h3>\n<p>Just as is often the case with new and emerging technologies, there are risks never seen before accompanying the tangible benefits. A recent KPMG study estimates that the risks stemming from AR and VR technologies could generate potential losses to the value of US$20 billion by 2020[7]. For example, what will happen if logistics workers suffer accidents whilst using AR smart glasses? Who will be responsible for securely storing ever more sensitive information such as location data? What shall we do with labor if warehouses such as FedEx reaches extreme automation?<\/p>\n<p>&nbsp;<\/p>\n<p><b>(787 words)<\/b><\/p>\n<p>&nbsp;<\/p>\n<p><strong>References<\/strong><\/p>\n<p>[1] Wall Street Journal. &#8220;EU Approves FedEx Acquisition of TNT Express&#8221; Jan.8th, 2016 <a href=\"https:\/\/www.wsj.com\/articles\/eu-approves-fedex-acquisition-of-tnt-express-1452249744\">https:\/\/www.wsj.com\/articles\/eu-approves-fedex-acquisition-of-tnt-express-1452249744<\/a><\/p>\n<p>[2] DHL Research Team. &#8220;Augmented Reality \u2013 changing the way we see logistics&#8221; <a href=\"http:\/\/www.dhl.com\/content\/dam\/downloads\/g0\/about_us\/logistics_insights\/csi_augmented_reality_report_290414.pdf\">http:\/\/www.dhl.com\/content\/dam\/downloads\/g0\/about_us\/logistics_insights\/csi_augmented_reality_report_290414.pdf<\/a><\/p>\n<p>[3] PWC. &#8220;<span style=\"font-weight: 400\">Industry 4.0: How Digitization Makes the Supply Chain More Efficient, Agile, and Customer Focused&#8221; Sep.7th, 2016\u00a0<a href=\"https:\/\/www.strategyand.pwc.com\/reports\/industry4.0\">https:\/\/www.strategyand.pwc.com\/reports\/industry4.0<\/a><\/span><\/p>\n<p>[4] PR Newswire. &#8220;Vuzix Smart Glasses Used in DHL&#8217;s Successful Trials, DHL Making Smart Glasses New Standard in its Supply Chain Logistics&#8221; Aug.2nd, 2017\u00a0\u00a0<a href=\"https:\/\/www.prnewswire.com\/news-releases\/vuzix-smart-glasses-used-in-dhls-successful-trials-dhl-making-smart-glasses-new-standard-in-its-supply-chain-logistics-300498459.html\"><span style=\"font-weight: 400\">https:\/\/www.prnewswire.com\/news-releases\/vuzix-smart-glasses-used-in-dhls-successful-trials-dhl-making-smart-glasses-new-standard-in-its-supply-chain-logistics-300498459.html<\/span><\/a><\/p>\n<p>[5] Wall Street Journal. &#8220;Augmented Reality to Revolutionize How Companies Manage Supply Chains, Says MIT Researcher&#8221; Apr.4th, 2017\u00a0<a href=\"https:\/\/blogs.wsj.com\/cio\/2017\/04\/04\/augmented-reality-to-revolutionize-how-companies-manage-supply-chains-says-mit-researcher\/\"><span style=\"font-weight: 400\">https:\/\/blogs.wsj.com\/cio\/2017\/04\/04\/augmented-reality-to-revolutionize-how-companies-manage-supply-chains-says-mit-researcher\/<\/span><\/a><\/p>\n<p>[6] PWC. &#8220;Industry 4.0: How Digitization Makes the Supply Chain More Efficient, Agile, and Customer Focused&#8221; Sep.7th, 2016\u00a0<a href=\"https:\/\/www.strategyand.pwc.com\/reports\/industry4.0\">https:\/\/www.strategyand.pwc.com\/reports\/industry4.0<\/a><\/p>\n<p>[7] KPMG. &#8220;How augmented and virtual reality are changing the insurance landscape&#8221; Oct.19th, 2016\u00a0<a href=\"https:\/\/home.kpmg.com\/sg\/en\/home\/insights\/2016\/10\/how-augmented-and-virtual-reality-changing-insurance-landscape.html\">https:\/\/home.kpmg.com\/sg\/en\/home\/insights\/2016\/10\/how-augmented-and-virtual-reality-changing-insurance-landscape.html<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>From science fiction to real-life industry applications, Augmented Reality harnesses the potential to enrich our real environment by overlaying context specific computer-generated information to our line of sight. Although still in its infancy, could AR eventually empower logistics?<\/p>\n","protected":false},"author":9970,"featured_media":21341,"comment_status":"open","ping_status":"closed","template":"","categories":[2116,2306,3235,2029],"class_list":["post-21340","hck-submission","type-hck-submission","status-publish","has-post-thumbnail","hentry","category-augmented-reality","category-dhl","category-digital-supply-chain","category-digitization","hck-taxonomy-organization-dhl","hck-taxonomy-industry-transportation","hck-taxonomy-country-germany"],"connected_submission_link":"https:\/\/d3.harvard.edu\/platform-rctom\/assignment\/rc-tom-challenge-2017\/","yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.3 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Augmented Reality \u2013 a Game Changer in DHL\u2019s Logistics? - Technology and Operations Management<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/augmented-reality-a-game-changer-in-dhls-logistics\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Augmented Reality \u2013 a Game Changer in DHL\u2019s Logistics? - Technology and Operations Management\" \/>\n<meta property=\"og:description\" content=\"From science fiction to real-life industry applications, Augmented Reality harnesses the potential to enrich our real environment by overlaying context specific computer-generated information to our line of sight. 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