June | 2020
Industry players are tapping into and harnessing Augmented Reality and Virtual Reality to transform customer experience and supply chain operations. From the front end to the back office, Augmented Reality (AR) and Virtual Reality (VR) are making significant impacts on speed and efficiency, human workforce experience, learning, and performance.
AR/VR can mitigate stresses in today’s supply chain by making it easier to collaborate across suppliers, manufacturers, distributers, and wholesalers. Enterprise users collaborating remotely with suppliers and customers, especially during COVID-19, could benefit tremendously from AR/VR implementation.
We believe it is important for enterprises undergoing digital transformation to capitalize on the opportunities AR/VR presents, and quickly qualify the true potential and challenges of these technologies.
The future of supply chains with Virtual Reality
VR in supply chain has the potential to be valuable in product design, process engineering and reengineering, data and process visualization, employee collaboration, and employee and customer training. Immersive VR applications can facilitate design workshops through global collaboration, regardless of the physical locations of engineers and designers.
Supplier relationship management can be enabled through VR by maintaining a visual relationship through the technology to ensure product reliability. For example, any stakeholder in the supply chain value can “visit” its supplier’s warehouses; which in turn will allow for easier negotiations, bidding in auctions, and signing of contracts.
VR can improve training and learning by helping operators understand how machinery works through first-hand experiences rather than traditional classroom education. 3D models of machines or of an operational site can provide ways to better understand how to prevent delays in operations. Virtual environments accelerate operator’s learning curve by gaining valuable insights into their interactions with robots and other workers, minimizing accidental mistakes and failures.
Moreover, VR can assist in designing an assembly line. Engineers can collaborate on designing, prototyping and testing assembly lines without the need for expensive physical prototypes. The iterative nature of VR can provide for fast learning and quick turnaround times. Through analyzing workstations’ interactions, designers gain a better perspective on how to optimize an assembly line. Thus, VR designs allow engineers and designers to continuously integrate and develop, reaping the benefits of quick feedback loops.
In addition, engineers get hands-on experience with early-stage product designs by visualizing how changes to one part of a design could affect the overall layout of the final product. Rotating the image and seeing it from all angles in 3D allows for quick, real time improvement. The more refined the virtual prototype, the lower the experimentation costs for the physical prototype and the faster the time to market. The VR technology, in turn, produces tons of data. The data can then be deconstructed to manageable pieces to be fully utilized for future planning.
Effective supply chains with Augmented Reality
A high number of enterprises today are adopting AR, both internal to the organization and external to customers and partners. Internal use cases include employing the technology to boost operational efficiencies, drive cost optimization, and shorten the development lifecycle. External activities are characterized by delivery and customer service.
Industrial AR adoption for internal uses focus on:
There are several use cases for AR deployment. Multiple companies have adopted the smart glasses technology and leverage line of sight to assist workers in scanning barcodes through the glasses, leaving them hands free to perform picking tasks. Pick-by-vision technology enables the user to view, for example, highlighted boxes or shelf locations to pick from in a warehouse, or to optimize packing instructions to reduce waste, size and shipping cost.
Smart glasses can also be used to train manufacturing workers by communicating and verifying manufacturing steps and recommending improvements to manufacturing instruction.
In delivery services, a “last mile” AR solution can aid navigation by giving information about alternate routes, blocked roads and traffic hitches to a driver. The goods kept on the back of a truck can be supervised by checking the virtual images on the windshield. At the time of delivery, customers can be verified by the delivery agent using facial recognition technology.
Nokia is at the forefront of AR technology through its “Factory in a Box”. The concept demonstrates that a factory can be packed and transported and be fully operational combining AR/VR, robotics and enabled by 5G connectivity. In the container-sized factory, technicians wear AR glasses or eyepieces that permit them to view and assist in various steps in a manufacturing process. The manufacturing process, alongside the AR capabilities are assisted via the Digital Automation Cloud.
In the automotive industry, BMW has seen significant time-savings and error reduction through AR adoption. A worker in an assembly line can use glasses or goggles to overlay heads up display onto the physical world, assisting in production, maintenance and interacting with the warehouse management system. Essentially, AR can help “digitize” Kanban system by improving on a lean manufacturing system to assist in material picking, pre-assembling and delivering parts to a production line with zero errors.
AR will become an industry standard add-on to physical products. Superimposing holographic images and instructions on physical products can enrich operator experience. In turn, this would drive higher employee engagement, lower attrition rates, and less workload for supply chain operators.
Challenges hindering AR/VR adoption
The successful adoption of VR/ AR in the supply chain must align with a company’s use case, operations, and organizational needs. The question is not when VR/ AR will be a mainstream tech enabler for the supply chain industry, but when will the technology forces of 5G and cloud computing flourish to allow maximum benefits of VR/ AR.
For VR/ AR to become a mainstream solution for the supply chain market, other factors need to be synchronized:
Cloud technology & 5G
A problem with current all-in-one VR headsets is a shortage of local processing capabilities. Given the adoption of 5G, cloud can compensate for insufficient local GPU capabilities with better rendered images which will lower device costs. Generally, 5G-supported cloud VR services will cost less and be more efficient. To integrate those technologies, industry players need to work more collaboratively to tackle issues such as latency, cloudification, and software-managed synergy. For VR/ AR to reach a mature state, not only for supply chain cases, 5G phones need to be available to the general consumer. This will lead to a lower threshold of entry for VR technology and therefore an increase in adoption.
Industry Standards
Industry standards will need to provide consistency. So far, very few whitepapers have been published regarding the integration of cloud, 5G, and VR/AR. Whitepapers must lead to the development of industry standards, those standards need to be discussed, refined and created to gain investors’ confidence and execution compliance.
User interface
The user interface is critical for adoption. Any technology that needs to interface with the user needs to be comfortable, easy to navigate and be conducive to a repeatable, pleasant experience. Hardware-related discomfort can be an issue, followed by an efficient all-day battery life. Solutions need to be consumer-centric, so that user adoption is effortless.
According to Digi-capital, companies such as Apple and Facebook are currently working on eyewear solutions, and Facebook is partnering with company Ray-Ban to better understand the customer perspective. Both companies are developing hardware with voice assistant capabilities, so that wearers have a way to interact with the device in real-time. In Apple’s case, a connection to the iPhone can drive new use cases in digitally mapping out spaces and objects.
The future of AR/VR and the impact of COVID-19
Companies have recognized cloud, 5G, and VR/AR as an important business model for the future. VR/AR is expected to be among the earliest commercial 5G applications. For the 5G VR/AR industry to grow at a faster pace, it needs continued joint effort by tech players manufacturing chips, devices, equipment, content, and cloud services.
Currently, AR/VR companies and users of the technology are dealing with impacts, both positive and negative of the lockdowns and economic implications of COVID-19. From ecommerce delivery limitations to supply chain disruptions, AR/VR can create opportunities across industries. Enterprise users across the supply chain, remotely collaborating with suppliers and customers during COVID-19 could benefit tremendously from AR/VR implementation. Physical lockdowns, therefore, could become a critical demand driver for AR/VR in the short and medium term.
Even if the synthesis is not yet fully operational, undoubtedly when the inner nuances are answered, supply chains in the “phygital” world need to be ready for a massive shift in the way services and experiences will be delivered.
Neil Gomes is a Consulting Partner with the Technology Business Unit at Wipro. He has over 18 years of experience driving consulting and digital transformation initiatives, focused primarily on clients in the Hi-Tech Industry. Neil has a Master’s degree in Technology Management from Carnegie Mellon University and is also an APICS Certified Supply Chain Professional.
Themis Vagiakos is an AWS Business Development Lead, working for Wipro since July 2019, after completing his MBA in INSEAD. Prior to Wipro, Themis engaged himself to business strategy, corporate finance and business development.
Michael Quarato is part of the consulting, implementation & product management team at Wipro. Prior to Wipro, Michael was a product design engineer in the Aerospace and Defense industry, where he designed complex systems in the radar and microwave field. Michael earned a MBA from The New York University Stern School of Business in 2019 and a Bachelor of Science in Electrical Engineering from the New Jersey Institute of Technology in 2007.
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