but intelligent software agents programmed to make exquisitely nuanced logistics decisions will soon be at work in the commercial sector as well. Maybe.
Wouldn't you like end-to-end control of the entire logistics pipeline? Simultaneous planning and execution? A logistics control system that operated at all levels and during all phases of operations? A system that allowed multiple simultaneous communications and decision-making over a vastly complex, spread out theater of operations?
Well, of course you would, although it probably sounds as far-fetched as having psychic access to your customers' order planning, or complete control over the weather.
It's not. The U.S. military and the defense departments in other countries, including the UK and Australia, are shooting for these exact goals, and they're coming close to achieving them. It's all made possible by something called intelligent software agents (see box).
Ironically, intelligent agents were originally developed in the commercial sector, and advocates initially had high hopes for an early rollout there. Last year, we published a story about intelligent software, quoting several sources who promised significant pilot projects in the next year. That proved overly optimistic, and a year on, adoption in the commercial sector is still far from reality. In the interim, however, intelligent software agent technology has steadily found its way into mainstream military applications.
R & Defense
It may be that the military has pulled ahead simply because it needs this level of sophistication more than commercial shippers do. "People ask, why aren't you like Wal-Mart," says Mark Greaves, program manager at the U.S. Department of Defense's Defense Advanced Research Projects Agency (DARPA) in Arlington, Va. "I say, well we are like Wal-Mart except our stores are moving all the time and Christmas comes on a random date every year."
And so for now, the military's where the action is. "The military has been in the front of this agent stuff," confirms Dr. Noel Greis, director of the Center for Logistics and Digital Strategy at the University of North Carolina's Kenan-Flagler Business School. "In the commercial world, the interest in agents [really took off] during the e-commerce era, and most of the applications focused on the interface between the customer and the process." (Amazon.com, for example, uses intelligent agents to automatically recommend new titles based on the customer's previous purchases.) "The military is a bit different," says Greis. "They dug in immediately on how agents can help with internal processes, especially logistics—the deployment of people, ammunition, fuel, water. In the military, agents are part of this whole digitization of the battlefield and systemization of operations. They want information captured in real time so they can see how the environment is changing dynamically and make sense of the information coming in."
On that front, perhaps the most promising intelligent software system being developed in the United States is UltraLog. Project UltraLog was established by DARPA in 2001 to take over from the Advanced Logistics Project that ran there from 1996 to 2001.
The UltraLog project's stated goal is "to create a comprehensive capability [that] will enable a massive scale, trusted, distributed agent infrastructure for operational logistics to be survivable under the most extreme circumstances." In other words, researchers are seeking the best way to use smart technology for maximum operational efficiency in combat situations—with the ability to continue operating at 80-percent capacity with up to 45-percent information infrastructure loss, for example.
UltraLog's not the only project under way, however. Others include Control of Agent-Based Systems (CoABS, also under DARPA), and Log Net, a joint-venture between the University of North Carolina, software vendor Saffron Technology of Morrisville, N.C., and Boeing Inc., headquartered in Chicago, which is developing technology for the U.S. Marine Corps. The Office of Naval Research announced in August 2003 a $5.74 million contract with the University of Southern California and Vanderbilt University to use agent software developed by computer scientists at the two schools to handle Navy and Marine Corps pilots' schedules. There is also a more ambitious and long-term project called Future Combat Systems, fostered by the U.S. Army.
Ultra-quick response
There are two main advantages to using intelligent software agents to help out with dynamic logistics management— that is, logistics management that responds quickly to changing situations.
First, intelligent agents form a collaborative network and can act independently. They don't need to operate in lockstep with a "master" computer that's overseeing everything; they can make a request, say, from a transportation management system to a local shipper's office without going through the head office's computer banks. This is called a distributed system, and it mimics much more tightly the physical structure of a complex logistics network.
Second, intelligent software agents are able to make autonomous decisions that humans would likely make if only they had the time. This is where the technology intersects with artificial intelligence, although on a relatively small scale. Intelligent agents are programmed with parameters that cause them to make what humans would consider "good" decisions, and they interface with humans on overall plans that spring from those decisions.
"What we're trying to do is tackle something that is a critical need, which is to unload humans from a lot of the mundane tasks they need to do, and to get humans and computers to collaborate," says Dr. Andrew Lucas, managing director at Agent Oriented Software Pty Ltd., a Victoria, Australia-based technology firm. "If you could do that, you could get a lot done," adds Lucas, who's currently working for the U.S. Air Force Research Laboratory at the Wright-Patterson Air Force base in Ohio, applying intelligent agents to military simulation.
And you could get a lot done fast. Enlisting computers to collaborate and make decisions lets users create a top-level logistics plan for a major maneuver in under an hour instead of the weeks it would take using humans alone. The USC/Vanderbilt program researchers reckon intelligent software cuts down the time needed to produce a daily schedule for AV8-B Harrier jump jets from six hours to four minutes.
Furthermore, intelligent software gives users greater ability to predict and limit the loss of operability caused by damage to the logistics system. The DARPA UltraLog program stresses the capability to build clusters of intelligent software agents that adapt so they can function in damaged and stressed environments. The military needs these capabilities more than anyone else because, for them, a logistics hiccup might mean losing an entire port or fleet of aircraft.
Greis says that the Future Combat System will also concentrate on smart ways of figuring out when and how to restock supplies in the field. "What they'd like to do is to make a lot of the logistics processes—re-supply, moving materiel from boat to shore—as autonomous and automated as possible. Right now, someone gets on the horn and says: I need such and such, and they're just responding. What they'd like to do is to develop agent systems that are more anticipatory and also respond autonomously," says Greis.
Greis describes one test project conducted recently, where vehicles in the battlefield were fitted with sensors that relayed information about engine temperatures, water and oil levels and so on. The software agents made their own decisions about how much to re-supply, who would do it, when it would be done and how long it was going to take. "We've developed a system with mobile agents, learning agents, collaborative agents that work together to manage the logistics," says Greis. "We're moving away from the push model to more of a pull model of supply. It's the same concept as the commercial supply chain."
Other military forces are catching on, too. Dr. Lucas is doing simulation work for the Defence Science and Technology Laboratory (DSTL), part of the UK's Ministry of Defence. Lucas is also working with the Defence Science and Technology Organisation (DSTO) in Australia to apply his company's agent product to unmanned air vehicle mission management. The firm is also working with the military in Canada and France.
Beginning of a beautiful friendship
Lucas is confident this smart technology will end up in the commercial sector, but he doesn't expect to see widescale adoption for five years or so. "It's not being used in the commercial sector, but it's close," he says. "As a technologist, I recognize that risk management is a big element in introducing new technologies. It's about showing people you have a plan for proving the technology and reducing the risk to the customer, over a number of years, and we've chosen to do that with the military first."
Part of the problem is that the technology's not quite ready for prime time. "We don't want to minimize the extent to which we think this would be useful in the commercial world," says Tony Rozga, research fellow at LMI Government Consulting, a not-for-profit government consulting firm based in McLean, Va., that supports the UltraLog project. "It's just not there yet." LMI and DARPA have worked together to develop Cougaar, a computer architecture for distributed agents. Notably, it's been made "open source"—that is, non proprietary—to encourage commercial application.
Saffron Technology's co-founder, chairman and chief scientist, Manny Aparicio, says one obstacle to adoption in the commercial sector is the issue of trust, especially with learning agents—ones that gather information about habitual human preferences and responses over time. People are nervous about delegating responsibility to a piece of software, Aparicio says. But, once they learn to trust it, things change. "The user can have it set so it just makes recommendations, but then they might get bored seeing it's right all the time and let it build a whole re-supply strategy," Aparicio says. There's always a safety net, he adds. "Whenever an agent sees a situation it doesn't know, it can still send an exception back."
Meanwhile, Greis's Center for Logistics and Digital Strategy's new "Intelligent Enterprise Initiative" aims to help industry leverage advances in digital technology, especially intelligent agents, to redesign their business processes. Greis says the commercial logistics sector is still wrestling with collecting sufficiently fine-grain data to feed to intelligent agents—something the military is far ahead on. "As you get all this real-time information, the agents are going to become tools for interpreting that," Greis says. "So people are focused on the RFID part of the puzzle [for now], but ultimately the RFID and agents will be brought together."
What is intelligent software?
Intelligent software agents are a form of artificial intelligence —software packets that act as autonomous decision- making entities, capable of coming up with solutions to problems and acting on them automatically. Think of the job performed by a travel agent hired by a business manager who needs to schedule a meeting. The manager contacts the travel agent to deal with flight schedules and make rental car and hotel arrangements. The travel agent then works independently with the manager's assistant—who's planning other details of the meeting, such as time and the list of attendees— to coordinate efforts so that they fit in with personal schedules, location information, the other attendees and even the weather.
To the manager, the end result, ideally, is a simple set of outcomes—flights, hotel booking, a reserved conference room full of people he wants to meet with. But the travel agent and assistant have collaborated in choosing these outcomes from an almost infinite number of possibilities, many of them interrelated. Change one factor and you change others—flying direct rather than to the local airport means renting a car. A single hiccup can send the whole process back to square one—a crucial client becomes unavailable on those dates. And so on. People respond and make decisions as the situation changes.
Software agents do the same job. They are goal-oriented, autonomous, collaborative, adaptive, proactive and mobile. Further, they allow "systems of systems," meaning you can link any number of agents together to get on with highly complex and widely distributed series of tasks. In practical logistics operations, such as a theater of war, that means you can have data and business processes distributed throughout the operation, instead of centralized data warehouses with longreach data feeds. This makes the flow of information adaptable to fast-changing environments, according to DARPA. It's also more robust and more reliable.
A move by federal regulators to reinforce requirements for broker transparency in freight transactions is stirring debate among transportation groups, after the Federal Motor Carrier Safety Administration (FMCSA) published a “notice of proposed rulemaking” this week.
According to FMCSA, its draft rule would strive to make broker transparency more common, requiring greater sharing of the material information necessary for transportation industry parties to make informed business decisions and to support the efficient resolution of disputes.
The proposed rule titled “Transparency in Property Broker Transactions” would address what FMCSA calls the lack of access to information among shippers and motor carriers that can impact the fairness and efficiency of the transportation system, and would reframe broker transparency as a regulatory duty imposed on brokers, with the goal of deterring non-compliance. Specifically, the move would require brokers to keep electronic records, and require brokers to provide transaction records to motor carriers and shippers upon request and within 48 hours of that request.
Under federal regulatory processes, public comments on the move are due by January 21, 2025. However, transportation groups are not waiting on the sidelines to voice their opinions.
According to the Transportation Intermediaries Association (TIA), an industry group representing the third-party logistics (3PL) industry, the potential rule is “misguided overreach” that fails to address the more pressing issue of freight fraud. In TIA’s view, broker transparency regulation is “obsolete and un-American,” and has no place in today’s “highly transparent” marketplace. “This proposal represents a misguided focus on outdated and unnecessary regulations rather than tackling issues that genuinely threaten the safety and efficiency of our nation’s supply chains,” TIA said.
But trucker trade group the Owner-Operator Independent Drivers Association (OOIDA) welcomed the proposed rule, which it said would ensure that brokers finally play by the rules. “We appreciate that FMCSA incorporated input from our petition, including a requirement to make records available electronically and emphasizing that brokers have a duty to comply with regulations. As FMCSA noted, broker transparency is necessary for a fair, efficient transportation system, and is especially important to help carriers defend themselves against alleged claims on a shipment,” OOIDA President Todd Spencer said in a statement.
Additional pushback came from the Small Business in Transportation Coalition (SBTC), a network of transportation professionals in small business, which said the potential rule didn’t go far enough. “This is too little too late and is disappointing. It preserves the status quo, which caters to Big Broker & TIA. There is no question now that FMCSA has been captured by Big Broker. Truckers and carriers must now come out in droves and file comments in full force against this starting tomorrow,” SBTC executive director James Lamb said in a LinkedIn post.
Bloomington, Indiana-based FTR said its Trucking Conditions Index declined in September to -2.47 from -1.39 in August as weakness in the principal freight dynamics – freight rates, utilization, and volume – offset lower fuel costs and slightly less unfavorable financing costs.
Those negative numbers are nothing new—the TCI has been positive only twice – in May and June of this year – since April 2022, but the group’s current forecast still envisions consistently positive readings through at least a two-year forecast horizon.
“Aside from a near-term boost mostly related to falling diesel prices, we have not changed our Trucking Conditions Index forecast significantly in the wake of the election,” Avery Vise, FTR’s vice president of trucking, said in a release. “The outlook continues to be more favorable for carriers than what they have experienced for well over two years. Our analysis indicates gradual but steadily rising capacity utilization leading to stronger freight rates in 2025.”
But FTR said its forecast remains unchanged. “Just like everyone else, we’ll be watching closely to see exactly what trade and other economic policies are implemented and over what time frame. Some freight disruptions are likely due to tariffs and other factors, but it is not yet clear that those actions will do more than shift the timing of activity,” Vise said.
The TCI tracks the changes representing five major conditions in the U.S. truck market: freight volumes, freight rates, fleet capacity, fuel prices, and financing costs. Combined into a single index indicating the industry’s overall health, a positive score represents good, optimistic conditions while a negative score shows the inverse.
Specifically, the new global average robot density has reached a record 162 units per 10,000 employees in 2023, which is more than double the mark of 74 units measured seven years ago.
Broken into geographical regions, the European Union has a robot density of 219 units per 10,000 employees, an increase of 5.2%, with Germany, Sweden, Denmark and Slovenia in the global top ten. Next, North America’s robot density is 197 units per 10,000 employees – up 4.2%. And Asia has a robot density of 182 units per 10,000 persons employed in manufacturing - an increase of 7.6%. The economies of Korea, Singapore, mainland China and Japan are among the top ten most automated countries.
Broken into individual countries, the U.S. ranked in 10th place in 2023, with a robot density of 295 units. Higher up on the list, the top five are:
The Republic of Korea, with 1,012 robot units, showing a 5% increase on average each year since 2018 thanks to its strong electronics and automotive industries.
Singapore had 770 robot units, in part because it is a small country with a very low number of employees in the manufacturing industry, so it can reach a high robot density with a relatively small operational stock.
China took third place in 2023, surpassing Germany and Japan with a mark of 470 robot units as the nation has managed to double its robot density within four years.
Germany ranks fourth with 429 robot units for a 5% CAGR since 2018.
Japan is in fifth place with 419 robot units, showing growth of 7% on average each year from 2018 to 2023.
Progress in generative AI (GenAI) is poised to impact business procurement processes through advancements in three areas—agentic reasoning, multimodality, and AI agents—according to Gartner Inc.
Those functions will redefine how procurement operates and significantly impact the agendas of chief procurement officers (CPOs). And 72% of procurement leaders are already prioritizing the integration of GenAI into their strategies, thus highlighting the recognition of its potential to drive significant improvements in efficiency and effectiveness, Gartner found in a survey conducted in July, 2024, with 258 global respondents.
Gartner defined the new functions as follows:
Agentic reasoning in GenAI allows for advanced decision-making processes that mimic human-like cognition. This capability will enable procurement functions to leverage GenAI to analyze complex scenarios and make informed decisions with greater accuracy and speed.
Multimodality refers to the ability of GenAI to process and integrate multiple forms of data, such as text, images, and audio. This will make GenAI more intuitively consumable to users and enhance procurement's ability to gather and analyze diverse information sources, leading to more comprehensive insights and better-informed strategies.
AI agents are autonomous systems that can perform tasks and make decisions on behalf of human operators. In procurement, these agents will automate procurement tasks and activities, freeing up human resources to focus on strategic initiatives, complex problem-solving and edge cases.
As CPOs look to maximize the value of GenAI in procurement, the study recommended three starting points: double down on data governance, develop and incorporate privacy standards into contracts, and increase procurement thresholds.
“These advancements will usher procurement into an era where the distance between ideas, insights, and actions will shorten rapidly,” Ryan Polk, senior director analyst in Gartner’s Supply Chain practice, said in a release. "Procurement leaders who build their foundation now through a focus on data quality, privacy and risk management have the potential to reap new levels of productivity and strategic value from the technology."
Businesses are cautiously optimistic as peak holiday shipping season draws near, with many anticipating year-over-year sales increases as they continue to battle challenging supply chain conditions.
That’s according to the DHL 2024 Peak Season Shipping Survey, released today by express shipping service provider DHL Express U.S. The company surveyed small and medium-sized enterprises (SMEs) to gauge their holiday business outlook compared to last year and found that a mix of optimism and “strategic caution” prevail ahead of this year’s peak.
Nearly half (48%) of the SMEs surveyed said they expect higher holiday sales compared to 2023, while 44% said they expect sales to remain on par with last year, and just 8% said they foresee a decline. Respondents said the main challenges to hitting those goals are supply chain problems (35%), inflation and fluctuating consumer demand (34%), staffing (16%), and inventory challenges (14%).
But respondents said they have strategies in place to tackle those issues. Many said they began preparing for holiday season earlier this year—with 45% saying they started planning in Q2 or earlier, up from 39% last year. Other strategies include expanding into international markets (35%) and leveraging holiday discounts (32%).
Sixty percent of respondents said they will prioritize personalized customer service as a way to enhance customer interactions and loyalty this year. Still others said they will invest in enhanced web and mobile experiences (23%) and eco-friendly practices (13%) to draw customers this holiday season.