5/15/2022 - Technology and Innovation

Reality Increased: DHL Case

By Lucas Revale

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What is the augmented reality?

The augmented reality is defined as a technological resource that offers interactive user experiences from the combination between the virtual dimension and physics, with the use of digital devices. That is, the way in which you can match the reality in which we live with virtual experiences through a device.

Examples of real augmented reality applications.

People who are not of the stick tend to confuse augmented reality with virtual reality... (and rightly!) but these two experiences are completely distinct: virtual reality plunges us into a whole new world, while the augmented reality adds components to the reality we all live in.

The main association that makes ordinary people when they hear about the augmented reality is leisure, i.e. a mobile game or hobbies. The association has name and last name: Pokémon Go. This was the most known augmented reality application, with 250 million downloads worldwide and billions of dollars raised. Basically, it is a mobile game in which through the camera one can capture characters from Pokémon.

But the great reality is that this technology has several applications that have little to do with leisure. Better yet, is used to solve problems of everyday life. Among the most notable application cases, one can find: training for physicians at universities (from routine issues to complex surgeries), improvement in customer experience when entering a store, for interior design (IKEA case) and architecture, more called marketing campaigns, among others. But the application that personally most seduces me is that of Effective Supply Chain of one of the leading companies in international logistics. Best known as the DHL case.

DHL is a company that offers messaging services, package delivery and urgent mail. Today it delivers about 1,600 million packages a year and has a portion of 22% of the total shipping market, approximately. His success is due to, as his motto says, "Excellence. Simply delivered." This operational excellence has been achieved, among other things, making its processes more and more efficient.

What is the application of augmented reality in DHL?

To understand how DHL could take advantage of this technology, first you need to understand how the company operates. In great strokes, DHL has distribution centers worldwide. These packages are stored and then sent to destination. It should be noted that the company makes international shipments. Due to the large volume of packages with which the company works, it is vitally important to get the distribution center to work effectively. One of the ways for this was the application of augmented reality.

It is estimated that 20% of the costs involving the company make a shipment are explained by the reception, storage and office activities in the distribution centers. In turn, the preparation of these packages represents 60% of the activities within the distribution center. Therefore, DHL understood where to put focus and efforts to reduce their costs and increase their productivity dramatically.

DHL Distribution Center, Netherlands.

DHL implemented the system known as Vision Picking. This consisted of giving all operators of the distribution center smart glasses. Through these, operators can view a digital list of packages that must be introduced, with the ideal location to collect them and the location of the packages in question.

The results of this implementation were contundant. DHL published a report showing that the productivity of distribution centers in which the augmented reality system was used increased by 25%. As if this were little, the company reported that they also managed to reduce their costs and times related to the training and training of operators by 50%. It also dramatically reduced the error rate in the cabinets.

Following the distribution logistics chain line. . In what other chain operations could be applied augmented reality?

One of the opportunities for improvement appears in last mile logistics, i.e. between the distribution center (or intermediate warehouse) and the final recipient. In cases where high volumes are carried, very loaded vans are used which will be discharged as deliveries are carried out in each household. There is a study by DHL that explains that 50% of the time the driver is in your vehicle, is not dealing. Without that you are looking for the package for the household in question. Here the augmented reality could play a crucial role. If by a device the driver could locate the package inside your truck with the delivery address, this would not waste time. Which would generate an increase in delivery productivity and a reduction in delivery times.

The logistics market is highly competitive and, as such, the winner The market will be the most productive agent. In the past, the successful company was the one that could move a package from one country to another, able to reach the destination satisfactorily. We are no longer in the past: today the market not only demands that it reaches destination, but also that it arrives fast. We may think that the task of looking for an operator's packages in a distribution center is intra-cendant in the logistic process in its entirety, but the success case of DHL shows us that it is an important process; and As a whole process, one can improve, one can reduce costs, it can be more efficient and also more productive.

In my view, this type of technologies such as augmented reality, today are an opportunity to improve the search for operational excellence and a way to differentiate itself against competition. However, in a future not so far away It will be a necessary condition to be able to continue competing As, in the light of the results, the advantages they provide are determining.

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lucas revale

Lucas Revale

Hello! I'm Lucas Revale, an industrial engineering student at ITBA. Currently completing the last year of the race.
In addition, I find myself in a professional training process in MasterCard in the area of business development in the Argentine and Uruguayan market.
From professional and personal experiences I have developed a great interest in the world of data analysis and business intelligence.

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