What Is The Business Case For AR?

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What Is The Business Case For AR?
November 15, 2018

In Influencers Roundtable, we bring together voices from four consulting firms to share how they perceive various emerging technologies. The answers below have been edited for clarity and length.

 

I had never operated a forklift before April 2018

 

If you've done it, you can imagine my shock when, upon starting up the machine, I hit the accelerator and almost ran into a rack. I was terrified. It was high. It was fast. And though I love roller coasters, I think I can say I'm afraid of heights.

 

You may be wondering, who would ever let an untrained journalist do that with a forklift? Truth is, that experience was at a trade show — and through an augmented reality device.

 

After learning, virtually but vividly, how difficult it would be for me to operate such a machine, I left the show wondering: How else can this tech be applied? Read what four influencers had to say.

 

What is the business case for augmented reality (AR) in the supply chain?

Robert SchmidManaging Director and Chief IoT Technologist, Deloitte Consulting

Augmented reality changes the way we do work on the floor and in inventory rooms in a few critical areas.

 

Today, training and certification thru AR allows us to not just do more interactive training but simulate emergency scenarios that are hard to train on otherwise. With more and more machines sensorized, we can point our phone and tablet cameras at any machine and see the Industrial Pokemon-Go, real-time data overlayed with actions to take.

 

Just these two use cases not only pay for the creation of content in a new way but delivers savings straight to the bottom line.

Tuong NguyenSenior Principal Analyst, Personal Technologies, Gartner

You should look at augmented reality as a user interface — as in, this is the way that your employees will interact with the physical and digital world around them.

 

Therefore, in supply chain, AR is a tool to augment worker capabilities by providing them relevant, interesting and actionable information to help them with the task at hand. AR in the enterprise is currently best suited for heavy industry and deskless workers with hands-busy tasks.

 

There are a broad number of use cases here, but it boils down to saving money, saving time and improving safety. Some examples include:

 

- Knowledge transfer — The aging workforce is an issue for many organizations, as retiring workers may leave with a vast body of knowledge. AR can be used for training and supervision.

- Empowering new workers —  This can help with the speed and effectiveness of onboarding as a complement, or substitute for traditional learning and training tools.

- Save on travel costs — As an alternative to experts driving, flying, traveling out to remote areas, they can assist remotely via see-what-I-see video and telestration.

- Mitigate risk — Ideally, using a head-mounted display. This is for situations where the worker needs to use one, or both their hands to do their task as well as their full visual attention.

Michael HuPartner, Operations Practice, A.T. Kearney

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. Before jumping into piloting AR use-cases, consider 3 critical questions:

 

1.Are there complementary technology requirements? Tiffany could deploy AR stations to improve 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.

 

2.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.

 

3.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.

Credit: Courtesy of Michael Hu / A.T. Kearney

 

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.

Mehdi MiremadiPartner, McKinsey & Company

Think of augmented reality as the more practical version of its cousin, virtual reality – it may not always be as cool, but you’re likely to use it in the real word a great deal more.

 

We see this play out in the wide range of ways that AR is creating business value in supply chains, including:

 

- "See what I see" capability, in which a live point-of-view video enables support between experts and supply chain operators and technicians.

- Superimposing AR images on a supply chain technician’s view to provide task checklists, performance tracking, real-time data, and alerts.

- Sharing live data and enabling group access to improve workflow management and explore optimization opportunities.

 

Empowering AR with artificial intelligence capabilities in any of these settings enable real-time anomaly detection and predictive capability that further enhances the business case for AR adoption.

 

A good example of a real-world recent application of AR in supply chain is in warehouse picking and packing. A number of major companies have seen significant improvement in order fulfillment by as much 30% to 40%, providing warehouse workers with optimized vision picking directions and locations in line of sight.

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