AI Technological Revolution's Impact on Logistics and Supply Chain

The Capital District of New York has undergone somewhat of a renaissance over the last 20 years, moving from a manufacturing hub started back by Thomas Edison at GE almost 140 years ago into the current moniker of Tech Valley, where GE has split into three technology-driven industries (aviation, healthcare, energy) with a world-renowned research facility, global foundries leading the way in the semiconductor industry, Regeneron in the pharmaceutical industry, SUNY’s state of the art Nanotechnology university, Rensselaer Polytechnic Institute in engineering and science advancements, and Plug Power’s leading global position in the Hydrogen industry. Truly state-of-the-art global organizations are changing our planet. On a recent visit to explore potential research collaborations between Plug Power and the University at Albany, the topic of artificial intelligence (AI) came up, as well as the relationship between logistics and our supply chain at Plug Power.

Before I discuss that meeting, I would like to tell you a little bit about my background. I have spent the last 39 years since my first job out of college at the Port Authority of NY & NJ in supply chain management and logistics-related roles. In that first position in their Treasury Department, I used to manually enter all the tolls, receipts, and expenses for the bridges, tunnels, airports, and parking facilities throughout the NYC area into a manual spreadsheet that was about three feet long and took excessive hours to maintain. I was given the task of learning Lotus and implementing that data into one of the earliest versions of spreadsheets, so commonplace now. 

Later at GE, I was involved with rolling our first TMS and ERP systems, replacing many manual processes. In both scenarios, after navigating difficult change management periods, the technology made life much easier and provided great efficiency and increased profitability. Technology itself has been the great catalyst for growth throughout the industrial era and our current technology-driven world.

I've had some outstanding mentors throughout my career, from Vin McLoughlin at Cardinal Logistics, who always credited the people who make up his organization for their success,  Erik Hallas at GE, who focused on the quality of the people you hire, and Rich Krolczyk from the GE Battery Plant who said your role as a manager is an inverted triangle, your job was the provide your worker's the tools they need to be successful at their job and be there to support their needs.

I went back to the meeting regarding state-of-the-art technology, world-class university collaboration with the leading hydrogen player, and my discussion with the esteemed faculty about what our logistics program lacked. We currently have zero use of AI and could use assistance from them to better understand and integrate the technology into our systems and processes. However, here is the challenge: logistics has always been about the people who drive the trucks, fork trucks, vessel operators, longshoremen, stevedores, dispatchers, manual and clerical workers, managers, and people who work in one of the most dynamic industries on this planet. Anyone in logistics knows it is an extremely complex, ever-changing, daily, if not by-the-minute, challenge to tackle and overcome a relentless barrage of issues that never end, consuming your very life. It is that dynamic, intense, fast-paced, round-the-clock (especially given today's global shipping environment, that attracts and eventually keeps us motivated and challenged as our careers and lives move from young, inexperienced, 20-year-olds to those of us like me in our 60’s nearing the ends of our careers with a lifetime of experiences.

What will AI do for the logistics industry? Will it replace the human element of what we do for a living? Will it be used as a supplement to replace the mountains of manual processes and transactional work in supply chain management? Can it handle the decisions that need to be made day in and day out, from COVID supply chain disruptions and planning to the Panama Canal running out of water, shipping issues related to the Red Sea crisis, and global conflicts disrupting our world? Right now, successful Logistics and supply chain programs have people who can think, put in place proactive strategies to deal with disruptions and contingency planning, and flat-out figure out how to get it done day in and day out. How much efficiency, cost out, and stock price improvements will AI provide? Will we be replacing ourselves? Given that the use of AI appears to be the next greatest trend coming to the industry, it will be interesting to see where this modern technology takes us. I bet that we are still going to need people. The question is, will they be in a supporting role in the technology or continue to drive the global supply chain in a leadership position?