Emerging technology is always a consideration when it comes to discussing the future of supply chains. Recently, there has been a lot of debate around the growth and testing of autonomous vehicles and how these vehicles will affect the supply chains of tomorrow.
Many of us find it hard to picture a world without humans driving vehicles but the concept of self-driving cars has actually been around for many years and it now seems that the technology that had once eluded us, is starting to be within our reach.
It is easy for both individuals and companies to get carried away with excitement on how autonomous vehicles can be employed in all facets of business life. But we should take a step back for a minute and consider whether the technology really makes complete business and financial sense.
Consumer-focused companies have given us the most press around driverless vehicles with Google, Uber and Mercedes all investing heavily in testing out the concept. However, reports have shown that implementation has not been easy with them all experiencing issues with the technology as well as there being many vehicle accidents in the process.
And even once the technology has been tried, tested and agreed, there are other stumbling blocks on the horizon including government regulations that will be imposed. If you think about it, what level of government approval will be required to allow driverless cars loose on public roads? There is bound to be an unease amongst the general public and they will want to know how driverless cars will be monitored, regulated and legally managed. Other challenges will include legal risk factors and questions over long-term maintenance of the technology.
It is unsurprising that many supply chain industry experts believe that the focus should move from consumer transportation to looking at how autonomous vehicles can drive down costs and improve efficiencies in the supply chain.
There is currently a shining example of a company using autonomous vehicles and that is Rio Tinto, the world’s largest metals and mining corporation. Rio Tinto already has around 80 autonomous mining lorries in operation in Australia. They have found that by employing these vehicles they are able to add an extra 1,000 hours to operations and reduce load and haul unit cost by 15% per year.
This example shows the financial gain to be made from employing such technologies and why other businesses should look to understand the benefits of using autonomous vehicles to move goods inside warehouses and between warehouses.
It also shows that autonomous vehicles appear to be able to have a greater impact on supply chain logistics and operations than being used for the transportation of people.
However, many companies are wary of becoming early adopters of this technology and are wondering whether they should just be a follower. A consideration here is whether there is a fundamental competitive advantage to leading the technology.
For an in-depth discussion on autonomous vehicles in logistics, and their future deployment in the UK, read our article Autonomous Trucks in the UK – This is No Revolution