Keep an eye on micro-fulfillment and the development of AI

On New Year’s Day, I posted a blog on the technologies I’ll be watching in 2020. The other day, I realized there are two more of note that I inadvertently omitted. This is what happens when you do things on a day when you’re thinking about football and your head may still be a little fuzzy from the celebrations from the night before.

Micro-fulfillment: In October, I published my first piece on micro-fulfillment solutions. These are scaled down versions of e-commerce fulfillment engines, designed to fit in 8,000 to 12,000 square feet – the size of a typical back room in a grocery store or big box retailer. This is in the early stages of development, and there are probably more pilots than go-lives at this point, but it holds the promise to level the playing field between Amazon and retailers with a network of brick and mortar stores that can be utilized for e-comm fulfillment. If you think about the average cost of one of these systems – say $3 to $5 million – and just the number of grocery stores out there, this could become a $1 billion segment of the materials handling industry in short order if it takes off. It’s also attracting new players that we have not seen in the industry in the past.

AI becomes a feature rather than a product: If your inbox resembles mine, you’re inundated with emails from startups in the fields of artificial intelligence and machine learning. A lot of venture capital money is being invested in this space, and the startups are offering AI and ML products. Maybe I’m getting old, but it reminds me of the early 2000’s, when supply chain visibility and event management became a thing. It’s easy to forget now that back then, VC money was flowing into that space and there were dozens of firms offering visibility and event management as best of breed, point solutions. What happened? Within a few years of the gold rush, the big established ERP,  WMS and TMS firms incorporated those capabilities into their software suites. Visibility and event management went from a best of breed product that you paid for to a feature that you got for free as part of the package. I’m already hearing established supply chain management software providers talk about AI and ML as part of their solution.

That’s it. You can let me know what you’re watching at