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Five Ways Augmented Reality Enhances Supply Chain Management

Senior analyst at ABI Research

Monday November 5, 2018


In 2016, DHL partnered with augmented reality (AR) hardware companies Vuzix and Google, as well as software provider Ubimax, to test AR solutions for logistics activities. After completing AR smart glasses trials at numerous pilot sites across the United States and Europe, the company noticed a 15 percent average productivity improvement as a result of greater worker efficiency and reduced error rates. DHL Supply Chain leaders therefore decided to expand the use of AR solutions across numerous industry sectors.

DHL found that AR offers unique solutions to tackle some of the operational pain points for warehousing and logistics and helps streamline work processes at the individual and enterprise levels. ABI Research conducted an analysis of the key advantages of using AR in supply chain management and developed this list of the top-five benefits.

  1. AR increases efficiency: Smart glasses allow workers to take a heads-up approach to their tasks. The information they need to do their jobs — such as what items to pick next, how many items to pick, where to pack them, how to navigate a facility and how to repair or install equipment — is right in their fields of vision. This means they don’t have to keep looking down at information sheets or flipping through instruction manuals while they are trying to work. Plus, because some smart glasses can be controlled through head movements or voice commands, workers’ hands are free to constantly be working, rather than fumbling with other papers or devices.
  2. AR reduces costs: AR devices enable remote users to see what the wearer is seeing. This allows original equipment manufacturers, consultants, repair experts, offsite managers and others to offer remote assistance to a worker. This can cut down on unnecessary travel costs as well as expenses related to downtime while a worker waits for an expert to arrive onsite.
  3. AR improves safety: Smart glasses can display safety warnings right in the wearer’s field of vision. In addition, because AR devices enable users to work with their heads up, they are less likely to be distracted or injured.
  4. AR minimizes errors: AR devices overlay virtual models and instructions on the user’s field of vision. This makes it possible to directly apply instructions to the task at hand and receive specific, visual feedback about how to complete the work. Because of the clarity these instructions can provide, workers are less likely to make mistakes.
  5. AR delivers a fast return on investment: AR devices have been proven to quickly train new employees — or even seasoned employees — learning a new task. This means employees are productive sooner. Smart glasses also help workers find needed items more quickly and accurately through dynamic inspection functions with internet-of-things and machine-vision synergies. In addition, if a problem is encountered while completing a task, information can be immediately pulled up on the smart glasses in order to find a solution, rather than having to leave the work area to find a helpful guideline, checklist or diagram.

Connected anywhere

A sixth, bonus benefit is available for certain devices: Some AR tools are able to guide employees anytime, anywhere. Many supply chain management activities happen in outdoor environments or while on the go. AR devices that are equipped with 4G or 5G connectivity offer extreme throughput, ultra-low latency and a uniform experience and are ideal for supply chain management experiences. Continuous connectivity in offsite locations also helps keep remote or traveling workers productive and prepared to handle the challenges of their jobs.

Supply chain vendors should consider working with mobile network operators or private network vendors to ensure service-level agreements that connect the factory floor, products, supply chain workers and end users. Ubiquitous connectivity is necessary for supply chain workers to interact with the surrounding environment and receive on-demand information anytime and anywhere. ABI Research believes new business models that can leverage connectivity capabilities and bring value to AR users wherever they are also can be developed once these cellular wireless AR infrastructures are in place.