No! You don’t need Google, Microsoft — or others’ — weird glasses. Just a plain ole smart phone or tablet will do.
Several years ago we visited plants where workers were using Google glasses as a method of hands-free scanning and to validate the insertion of a particular part in a custom manufacturing process. A good start. But Augmented Reality (AR) has gotten a lot more versatile and deeply functional across many tasks throughout the supply chain today. And these are still early days.
Large companies like Caterpillar, BAE, and Boeing1 are using AR in service applications to assist the field service technician in identifying a part that needs maintenance and to provide the proper repair instructions. Design and sales people are using AR to show customers custom configurations to see — and almost touch — the product. AR is not just for big companies, however. Plenty of mid-market manufacturers like Kamco or Fisher Industries are also using it.2
Think about it. Today’s install base, whether a washing machine or complex equipment like a 737, can have thousands of unique configurations. No one person — the factory line worker, the warehouse picker or the field service technician — can possibly understand the nuances, installation, or repair of each and every one of those variants. For this and many other reasons, AR is becoming a capability that companies are starting to explore, experiment with, and implement.
A Growing Market in Supply Chain
Estimates vary on market size due to the difficulty in segmenting AR for business/supply chain vs. other applications. However, we estimate about $1B in sales for software and implementation today. The tech providers we talked to are experiencing revenue doubling (and in some cases much more) every year.3 Though still small,4 AR is a rapidly growing segment with many startups as well as impressive, large companies such as PTC, Plex Systems, Siemens, Microsoft, and Autodesk, to name a few who are investing heavily to make AR practical.
Today’s trend is connected reality, whether in our personal lives or our home or work environment. Thus, the use of this type of technology has an easy acceptance. The challenge comes in understanding AR well enough to develop a roadmap for its uses within the enterprise. That takes a bit of imagination as well as an understanding of the technology and the various market offerings. We should note, though, that AR is still an early market, and the application ideas incalculable. So don’t expect much in the way of off-the-shelf applications. That will mean the obvious here — having a tech partner you can grow with.
Application areas
One of the key factors in enabling AR adoption is that companies have already automated manufacturing and warehouse and use design systems and have graphical renderings of products and/or parts. Those are foundational elements, since AR is really not a standalone application. Think of it as a new user interface that will leverage the foundation in important ways. Key areas in which we see companies beginning to apply AR in supply chain are:
- Build-/Configure-to-Order Manufacturing — from parts pick list, installation instructions, scanning, and validation to ensuring that workers understand what is to be done and then validating that the right parts were installed
- Inbound receiving/quality — validate that the part received is actually the part ordered and that it meets spec
- Warehouse picking — accurate picking
- Facilities design — warehouse or manufacturing lines, the ability to visualize and optimize layouts
- Field service product installation — validating the order and parts as well as correct installation and test
- Field service repair — recognizing unique configuration and providing the correcting repair steps
- Knowledge Management (KM) — this is probably the underpinning of it all. Each of the above examples is really about ensuring that workers understand what they are working with and can correctly perform the task. KM, today, does not just apply to the day-to-day work of experienced workers, but functions as a training aid for new workers, especially in high-turnover environments like warehouses.
These areas in manufacturing, warehouse, and service chain applications have already demonstrated real business value with strong productivity gains, increased customer service, and on-time/full/accurate product delivery.
Closing the Talent Gap
Probably the most profound benefit is knowledge management. In fact, even in manufacturing, not all jobs are going to be automated. And with an aging workforce, the challenges in hiring young workers (and keeping them) in sectors like logistics or manufacturing are getting tougher. Recent estimates show more than 488,000 openings in manufacturing and that number is expected to rise. In logistics there are approximately 280,000 openings with over 7 million already employed and expected job growth rates of 6% to 8% — not including turnover for retirement. Hence, getting workers up to skill and making them productive more quickly is crucial. No matter the employee issues, the customer must never be at risk. So having a guide to refer to across the supply chain seems to be an exceptionally critical capability that any business — large or small — would want to have.
Reducing errors, increasing productivity, and ensuring safety are ongoing metrics in supply chain, where more gains have been getting harder to achieve. Thus, we see Augmented Reality becoming one of those corporate-wide initiatives with applications from design through manufacturing, sales, delivery, and on to service. Society is getting more comfortable being connected, so AR will become part of our societal and business experience. And we won’t have to wear those funny glasses to get there.
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1 PTC customers — Return to article text above
2 Plex Systems customers — Return to article text above
3 Of course, with small markets that might be easy to achieve. But the fact is that AR’s entre is attempting to break into already mature markets of manufacturing and services, so it’s still a tough road forward. — Return to article text above
4 Some other research firms have larger and more aggressive predictions on AR today and tomorrow. Deloitte, for example, has an astronomical trillion-dollar prediction for AR. Some other research firms see a $100B to $200B market by 2020 or 2025ish. However, if you add up the actual revenue reported by the software firms who sell and implement AR, their numbers start from a more conservative base. That is the reality of augmented reality. That is not to say that AR is not important. It is one of the most important enablers to come along in a really long time. And, that’s the reality of augmented reality, too. — Return to article text above
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