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How AR and VR Can Cut Waste in the Supply Chain

Nov. 23, 2022
In a post-pandemic world, companies have finally started harnessing the potential of augmented and virtual reality.

Consumers and companies alike have faced challenges acquiring affordable supplies since the onset of the COVID-19 pandemic. As a result, the global market is increasingly experiencing supply chain deficiencies.

New technologies such as augmented and virtual reality have shown promising results in transforming the management of supply chains. These redefine warehouse operations and improve efficiency while reducing waste and maximizing profits and customer satisfaction.

The Global AR/VR Market Size

With the increasing investment in the potential of these technologies, many companies are already implementing such tools in their businesses to improve operations. Virtual and augmented reality are becoming an integral part of a wide range of industries beyond just tech.

According to Verified Market Research, a company specializing in market research studies, AR and VR’s market value was at $8.94 billion in 2020, with projections to reach $80.80 billion by 2028.

Such staggering statistics can be linked to the rise of electronic and smart devices. The increasing number of businesses and industries currently employing these technologies is expected to drive the demand for AR and VR. In addition, the growing number of vendors seeking to reduce the prices of these products is also expected to boost the global AR and VR market rapidly.

Supply Chain Waste Challenges

Businesses are faced with several challenges as they attempt to reduce waste considering the significant amount of produced waste which can result in an adverse decline in efficiency and effectiveness. A few of these challenges include:

Inventory and Materials

Some waste (such as materials, gases or excess inventory items) results from expired stocked items. For example, according to Balloon, a supply chain solutions provider, an estimated 4.8 million tons of food is wasted across the UK’s supply chain every year despite  overwhelming food demand—not only in the UK but all over the world.

Being primarily focused on protecting profits, many companies purchase bulk to obtain inexpensive rates. Others opt for overstocking goods subject to expiration as they over-estimate the quantities of needed products, failing to predict demand, which only incurs waste and loss of profits.

Packaging

Safe packaging ensures the product is delivered in good condition from the manufacturer to the consumer. However, it is difficult to achieve sustainability with the rampant prevalence of disposable packaging.

According to a report conducted by Plastic Waste Partnership, a platform dedicated to promoting the sound management of plastic waste, 46% of plastic waste is due to one-way packaging. Often, products are delivered in boxes twice their size or wrapped with endless layers of stretch or bubble wrap, which will eventually end up in a landfill.

Returned Items or Products

Companies that promote return policies gain credibility and customer satisfaction, but returns produce significant waste as products are sold in quantities while returns are processed individually. In fact, 25% of returned items eventually end up in landfills, according to a study conducted by Penn Today, a one-stop portal for news from the University of Pennsylvania.

The pandemic also contributed to a surge in e-commerce and online shopping, resulting in high return rates. Returns do not bode well for the environment, and working toward reducing the number of returned items will contribute to minimizing the carbon footprint resulting from back-and-forth product transportation and wasted return products.

Key Advantages of Using AR/VR Technologies

Many forward-thinking logistics or shipping companies are implementing AR and VR technologies. These technologies improve warehouse management by boosting accuracy, optimal execution and limiting errors. Here are the key advantages of AR and VR technologies in the supply chain:

Inventory Control Management

AR in business can offer a time-effective and accurate modality to manage total stock items. For example, AR glasses overlay detailed all-around 3D information about the product without needing to go through stock manually, which optimizes workflow and improves accuracy.

Improve Production Lines

AR can contribute to the production aspect by providing 3D modeling of prototypes before moving to the actual production phase. By using an AR tool for architects, companies can transform their product prototypes into live interactive 3D models, allowing designers to test final products more realistically.  

Employees’ Training

VR can transform traditional employee training, making the process much less time-consuming, more immersive and even enjoyable. For example, a study conducted by Deloitte, a global business solutions provider, showed how a logistics organization utilized VR, which allowed the management to track the trainees’ progress as they successfully underwent the VR-based training program.

Impact of AR/VR on Logistics and Supply Chain

VR and AR are increasingly utilized in the logistics and supply chain industries as a report by Markets and Markets, a company specializing in consulting and program management, expected the VR and AR market size to reach $37 billion in 2022 and $114.5 billion by 2027. These figures shed light on the positive impacts of AR and VR in the industry, most notably: 

Assembly Line Evaluation

AR glasses can help workers assess and evaluate the items’ condition right off the assembly line, thus cutting down on returns rate and limiting products’ waste.

Accessibility and Collaboration

AR and VR technologies can support remote work since employees can communicate via AR or VR video meetings. This can reduce gas emissions resulting from frequent transportation and increase staff productivity. 

Efficient Shipping and Fast Orders

As mentioned before, AR can largely contribute to seamless and error-free inventory control. By tracking the number of both shipped and pending orders, AR guarantees a hassle free shipping process for the customer and reduces the number of returns for the manufacturer.

Improved Delivery

Instead of standard navigation systems, truck drivers delivering products or packages can receive real-time information about the best routes, traffic conditions and any changes in the delivery process using AR.

Final Thoughts

With the help of augmented and virtual reality, businesses can mitigate their environmental footprint by limiting supply chain waste and enhancing inventory control management, production lines and shipping processing, ultimately resulting in increased costs and customer satisfaction. 

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