While Augmented Reality (AR) is gaining significant attention as one of the Industry 4.0 technologies that will revolutionize supply chain, we believe it is important to look beyond the hype and qualify the true potential and challenges.
The value of AR is directly tied to its ability to impact human workforce experience and performance. Consider two often touted AR use cases – (1) AR powered goggles for guiding warehouse pickers and (2) Presenting visual build instructions to improve factory worker assembly Q&A and productivity.
Before jumping into piloting AR use-cases, consider 3 critical questions:
Are there complementary technology requirements? Tiffany could deploy AR stations to improve jewelry assembly by presenting visual instructions, but may quickly find that quality and assurance of the various artisanal steps in polishing, clipping and clasping requires advanced machine learning vision to capture and real time analyze work to truly drive impact.
Is AI-powered robot automation a better alternative? Amazon may find leveraging artificial intelligence (AI) to make its Kiva robots replace human pickers may be a more effective return on investment than AR goggles for employees.
Is the cost of deployment worth the benefit? Foxconn could improve its iPhone defect rate, but is the payback worth it to invest in tens of thousands of AR stations for each of its army of factory workers?
In fact, when considering two AR use cases — AR-powered goggles for guiding warehouse pickers and visual build instructions for improved factory productivity — across three industry sectors, we find potential attractive ROI for only a handful of these scenarios.
AR may be a powerful enhancer of the future supply chain, but its impact will be limited to complex human specific tasks involving high labor cost and/or high cost of mistakes. Moreover, these use cases often require advanced complementary prerequisite capabilities (AI, IoT and analytics) to be already mature and in-place to truly unlock the promised value.
Originally appeared in SupplyChainDive Influencer Roundtable
Michael Hu | BCG 