Walmart will begin testing autonomous vehicles in Bentonville in the next six weeks. Jason Shaffer, director of digital operations at Walmart, discussed the plan at the Trends in Supply Chain Management Conference held at the University of Arkansas on Thursday (April 25).
Shaffer, one of the conference’s keynote speakers, said while Walmart has tested autonomous vehicles for online grocery orders in areas like Chandler, Ariz., the technology is coming to the streets of Bentonville in the next few weeks.
“We will be running a line haul from the pickup location on J Street to the Neighborhood Market on I Street. The J-Street location picks online grocery orders for pickup by customers at the I Street location. We make several runs daily with those orders. Soon we will be testing autonomous vehicles in that operation,” Shaffer told Talk Business & Politics.
He said Walmart worked to get Arkansas law changed to allow for the testing of autonomous Class 4 full-size pickup trucks and Class 5 passenger cars. Shaeffer said Walmart wanted to study the vehicles at home in a suburban setting. The goal is to get autonomous cars to make the runs without a human in the vehicle.
His personal views are vehicle subscriptions will become common. He foresees a time when a car will drop a person off to shop and that same car will pick up an order to be delivered to another person’s home. He said parking lots could be repurposed and used as lease space to cars for parking in between trips.
Walmart also is testing automation in the picking of orders in a store in New Hampshire. Shaffer said the busiest stores can have personal shoppers picking 300 orders a day. While the retailer is using optimized picking routes within the store behind autonomous cars, he said there is still wasted time walking. The large “Alphabot” does all the legwork being able to move in multiple directions within the large pod.
Shaffer said Alphabot was launched at the end of January and the team continues to work through challenges with the bot. He expects those will be ironed out by July. Walmart previously said Alphabot has a pick rate up to 1,700 picks per hour. Under the manual picking system, personal shoppers pick up to eight orders at one time, just a fraction of the efficiency achieved with Alphabot.
NO MORE ‘BIG CHIEF TABLET’
Scott Spradley, chief technology officer at Tyson Foods, said during his address that technology is radically changing the supply chain for the meat giant. The company sells to Walmart and McDonald’s and has to procure animals for slaughter and manage commercial poultry farms run by its contract growers.
He said for decades Tyson Foods was an analog company storing data on ledgers with loads of manual entries. He likened the data keeping to “Big Chief Tablet” days. But that is moving toward automation and cloud storage of data. He said Tyson Foods has made great strides in the past few years with the transformation.
In what he considers an 8-link chain, he said Tyson Foods has reached the sixth-link of using predictive analytics and machine learning in various applications within the company’s vast operations. He said the company uses computer visioning to examine the product as it moves down the line and has proper identification to ensure the product correctly stored or shipped.
Before this technology was used items were tagged wrong and end up in the wrong bin causing the line to have to run additional product. He said the perishable product was found and discarded. The camera vision sensors are part of the Internet of Things and it’s been able to reduce waste in plants where it’s used.
Spradley said vibration sensors have also been placed on machinery to signal when the need for maintenance. While Tyson is using technology in its manufacturing facilities, he said it also has to be deployed on the farm or the front-end of the supply chain. Tyson is using drone technology dispatched to farms where a break-in has been detected. For instance, if a person tries to break into a poultry house to capture fake video to post against Tyson Foods, the drone will know the geo-fence has been breached and dispatch the drone to the site where it captures images of the violators. It can also detect IP addresses that can identify the perpetrators.
Spradley said Tyson Foods is also dabbling in blockchain applications in terms of payment contracts as well as supply chain visibility. He said companies must transform to the digital age or they will cease to be relevant, and that requires a mindset change of in companies that were successful using analog systems.
SUPPLY CHAIN VISIBILITY
Tommy Barnes, president of Chicago-based Project 44, was also a speaker at the event. Project 44 is a technology company devoted to taking waste out of the supply chain. Barnes said Walmart has leapfrogged many competitors in the past few years behind the leadership of CEO Doug McMillon who embraces technology. He said the long view Walmart is taking with respect to investments in technology is counter-intuitive to the way a 50-plus-year-old retailer would view things.
Barnes said some of the biggest companies in the supply chain could be left behind if they don’t adopt technology and stay agile. He recalled three years ago being in the room with Toys R Us execs who told him they had great visibility into their supply chain, when in reality they had cobbled together a system that could not be unwound. In the meantime, those competitors who have great visibility into their supply chain were the winners at the expense of Toys R Us.
He said growing rapidly in silos is a recipe for disaster and companies that have employed that strategy with their technology transformation will be surpassed by companies who avoid silo thinking.
Barnes said there is excessive waste in the supply chain and addressing the problem can help companies save a lot of money. He credited Tyson Foods with its forward look in an industry that is woefully behind.
“We think there is a $4 trillion value to unlock through the next decade through the digital transformation of logistics. We started in LTL (less than truckload shipping) but today over 50% of our work is done on ports,” Barnes said.
The complexity of the supply chain has allowed for waste to creep in. Transitioning to digital systems that use high-quality data, incorporating the Internet of Things and machine learning will allow for a more efficient, transparent and indisputable supply chain, according to Barnes. He said Blockchain has will soon have a relevant place in supply chain in the form of contract payments and product tracking. He believes autonomous vehicles are likely to 5 to 10 years out, although he owns a Tesla that drives him to work each day.
OTHER CONFERENCE INFO
Roughly 200 people registered to attend the conference this year, according to UA staff. Michael Gashler, a research scientist at SupplyPike, held a breakout session on machine learning in retail. He presented a broad overview of machine learning and analytic predictability. Reuben Calow, senior director of global supply digitalization at The Kellogg Co., held a break-out session looking at the impact of digital technology in manufacturing, from Internet of Things, augmented reality and robotics.
Shelley Simpson, chief commercial officer and president of highway services at J.B. Hunt, closed out the conference in a panel discussion with Matt Waller, dean of the Sam M. Walton College of Business at the UA. Waller said the event has grown and matured over the years since the early days when the transportation major at the university was under the marketing department. The year was 1971. It was the smallest major at the UA, Waller said.
“In 2011 we started a new department called the Department of Supply Chain Management that incorporates transportation, logistics and supply chain. We have come from being the smallest major in the college to be the third-largest major in the entire state of Arkansas. Based on the number of students we graduate each year we are fifth in the country,” Waller said.
The speakers agreed Northwest Arkansas has become hallowed ground for supply chain logistics in part because of the entrepreneurial spirit of the largest companies who continue investing to effect change. He said manufacturers like Tyson Foods, logistics firms like J.B. Hunt, and retailers like Walmart and Sam’s Club continue to work with the UA to provide research and talent for the next generation.