Augmented Reality in Supply Chain Management: What it Means for You

You may know about augmented reality (AR) and virtual reality (VR) from the video gaming world. Augmented reality has a place in manufacturing and distribution, as well, and in fact has become an important part of the supply chain.

It’s all about making the movement of goods and services more efficient, cost effective and potentially error-free.

And now, with both the physical and financial restrictions of COVID-19, more potential uses for AR have arisen and expansions on current uses are in the works.

Though these same restrictions are expected to cause a slowdown in AR/VR spend at first, experts expect the category to strengthen as companies recover and put new technologies in place to adapt. In fact, IDC lists industrial maintenance and logistics and package delivery management among the fastest growing worldwide AR/VR use cases.

What is Augmented Reality?

Augmented reality is the space between physical reality and virtual reality. AR provides an interactive view of the real world enhanced with computer-generated elements. These elements may include audio, video, graphics and other digital content that change in response to a user’s actions.

Augmented reality is finding its way into multiple industries and channels, from tourism and navigation to healthcare and construction. A well-known example of AR includes Nintendo’s Pokemon Go app, which overlays animated graphics in real-world situations that users encounter using their smartphones. Retailers like IKEA and Wayfair use AR to help customers envision products in their own homes.

When it comes to distribution and manufacturing, as with any of these applications, AR can enrich a realistic scene with additional, valuable information.

How is Augmented Reality Used in Manufacturing and Distribution?

Augmented reality is among the newest waves of digital transformation, and it’s changing the face of many supply chains. From the plant floor to the field, augmented reality is making an impact when it comes to how factory personnel, service technicians and engineers interact.

In the manufacturing sector, AR is often applied in two areas: overlaying digital information over physical objects on the plant floor and enabling remote collaboration. Distributors are also seeing benefits of using AR, especially when it comes to inventory management, by providing better ways to monitor and track inventory movement and consumer demand. Here are a few other ways that we’re seeing augmented reality in manufacturing and distribution:

• Enhanced training opportunities. There’s something brilliant about using digital tools to mimic real-world situations. Digital overlays and interactive simulations representing realistic scenarios and situations can give trainees and new hires more effective learning opportunities. As companies continue to practice social distancing, employers can do more than provide a handbook or video for training. And organizations won’t be as hard-pressed to deliver hands-on training when AR can deliver an interactive experience to lesser-experienced staff.
• Improved inventory visibility. AR can provide deeper insights and greater control over what’s on the shelves, what’s moving and what’s not, and what customers are purchasing. Adding a virtual experience on top of inventory data can deepen one’s inventory awareness with nothing more than an AR-enabled smartphone or tablet. Developing such control and visibility over inventory is top of mind for many in the industry, as they’ve seen drastic demand shifts through the pandemic and could’ve been more responsive and efficient with such capabilities.
• Improving warehouse efficiencies. Smart glasses are also helping to improve the order-picking process, showing warehouse workers what to grab and where to place, whether on a shelf or a cart.
• Remote collaboration. Remote work is nothing new, but in the traditionally hands-on world of supply chain management, remote collaboration hasn’t always been possible. AR offers new opportunities for digital collaboration and expert assistance for troubleshooting and maintenance, saving both time and money by replacing the need to physically transport people. Remote capabilities gained a heightened sense of urgency as organizations worked to meet new health and safety guidelines. AR and remote collaboration provide relief and support to employers as they accommodate safety guidelines, keep high-risk employees safe and maintain the appropriate capacity. If on-site and off-site employees can collaborate as needed, employers can be more flexible and creative in scheduling.
• Improved delivery. Getting product into the end-user’s hands can be a huge time-waster. Rather than rifling through parcels in a truck or searching a building for the right delivery address, delivery personnel can rely on augmented reality for improved identification and location services within their vehicle, and improved navigation data when it comes time to deliver.

Augmented reality is becoming the new normal within supply chain management, offering ways to combine real situations and digital innovation to do traditional tasks faster and more efficiently. As the industry adapts to new realities imposed by the COVID-19 pandemic, and as companies strategize to build in greater defenses in case of future disruption, AR enables key capabilities for reducing risk in their supply chains.

Are you thinking about implementing an AR solution at your company? Get a free assessment from one of Enavate’s experts about ways an AR solution can improve your supply chain.