Warehousing operations is big business. It is a $141B business in the US alone and accounts for 10% of all logistics costs .
Estimates suggest picking items from shelves represents 65% of those costs, or $92B (Figure 1) . The process is still heavily manual. Pickers carry a hand-held scanner with them, searching for the right item, scan it and place it in a cart. It is slow and error prone. Errors must be prevented as they typically result in high follow-up costs including re-stocking and administrative costs.
Augmented Reality: an Opportunity to Increase Productivity in Warehouse Operations
AR is a not-so-new, yet underutilized technology that allows the superimposition of information in the user’s line of sight . It can help warehouse operations in three major ways: optimized picking, warehouse planning and quicker training of resources .
Augmented Reality and head-mounted displays free up the pickers’ hands, allow the display of the picking list in the picker’s eye-sight, automatically scan barcodes, optimize indoor routing and help locate items on the warehouse shelves. Through a reduction in error-rate and search time, optimized picking is the most obvious advantage of AR in warehouses .
As warehouses become more complex and house new value-added services, AR can help experiment, in “real-life”, proposed changes to the warehouse layout and processes. It converts 2D plans to a 3D and life-sized environment, which speeds up the process of planning and reduces the occurrence of “run-time errors” .
The distribution industry is one of the largest occupational segment of the temporary staffing market . Between 11% and 18% of workers are temporary . They each need to learn the layout of the plant and must go down the learning curve before being fully operational. AR can accelerate the ramp-up period of these workers by walking them through their first shift step-by-step, with much lesser need for training.
Intel’s results with AR suggests an opportunity of at least ~$25B for the logistics sector
“In its distribution center in Arizona, Intel successfully deployed the Pick-by-Vision solution xPick, developed by Ubimax.” Ubimax is a market leader for industrial wearable computing solutions.
According to the latest results, Intel improved its KPI of “pick-time-per-box” by 29%, with minimal ramp-up time. 
“On the very first use without any training, order pickers were already 15 percent faster using Vision Picking compared to the picking process with hand-held scanners.” 
These early results not only encouraged Intel in its endeavor to stay relevant through implementing AR in its daily activities, but also suggest a tremendous opportunity for cost takeout in the US logistics sector. A reduction of 29% in warehousing operation costs could amount to ~$25B . Error-rate is also down to almost 0%. 
This promises to attract players to implement this technology. DHL, a global supply chain company already started rolling-out AR in its warehouses and noticed a similar 25% increase in productivity , further confirming the optimization potential.
Intel’s management seems to be aware of the threat of non-sustainability of this cost advantage, and is moving quickly to implement AR in its warehouses across the globe .
Warehouse Operations: Only the Tip of the Iceberg
Although a tremendous opportunity for AR in supply chain lies within warehouse operations, managers must consider the transportation cost bucket ($889B). As a starting point, two applications should be explored: transportation optimization and last-mile delivery. 
AR can achieve more effective pick-ups through reduction in transportation time, detection of potentially damaged items and facilitated completeness checks. AR devices could detect the number of pallets or parcels that have been picked-up, assess their status and confirm that the order is complete.  It can also assist truck drivers in heavy traffic through heads-up displays and optimize the cargo loading process through the projection of loading instructions on a head-mounted display.
“Estimates suggest that drivers spend between 40 % and 60% of their time away from the distribution center not driving.” They are instead searching for boxes or where to deliver them.  AR could assist drivers in their day-to-day job by decreasing the reliance on memory from the loading process, displaying exactly where in the truck is the next package to be delivered. The so-called “last-meter” delivery could also be improved through enhanced close-quarter navigation and crowd-sourcing of delivery data (i.e., Where exactly is Soldiers Field Park Building 3?).
What does the future hold: enhanced humans or humanized computers?
As Intel and other firms keep “enhancing” its human employees with technology, and other hardware firms keep “humanizing” their computers through machine learning and AI, one could question what the real future of logistics is.
- Human pickers with “enhanced” vision or robots with judgment capabilities?
- Human truck drivers with robot-like capabilities or driver-less trucks?
 Schulz, John, “2016 State of Logistics Report: Pursue mutual benefit”, Logistics Management, 55, 7, pp. 22-25, Business Source Complete, EBSCOhost, viewed 3 November 2017.
 Porter, Michael and James Heppelman. “Why every organization needs an augmented reality strategy” Harvard Business Review (November-December 2017): 46-57.
 Kückelhaus, Markus (Dr.) “Eleven reasons to consider augmented reality in logistics”, Operations Management (1755-1501), 41, 2, pp. 16-18, Business Source Complete, EBSCOhost, viewed 3 November 2017
 “Trends in the warehousing and distribution industry” Staffing Industry Analysis (December 13, 2016), https://www2.staffingindustry.com/Editorial/Industrial-Staffing-Report/Dec.-15-2016/Trends-in-the-warehousing-and-distribution-industry, accessed 4 November 2017
 “Intel Achieves 29% Efficiency Increase with Ubimax Solution xPick,” press release, April 6, 2017, on Intel website, https://www.reconinstruments.com/2017/04/intel-jet-pro-efficiency-increase-ubimax-xpick/, accessed 4 November 2017.
Featured image: Intel, “Intel ADC Pilot – Recon Jet Pro,” YouTube, published March 16, 2017, https://www.youtube.com/watch?v=zgqySidLHzI&t=2s, accessed 15 November 2017.
Figure 1: Schulz, John, “2016 State of Logistics Report: Pursue mutual benefit”, Logistics Management, 55, 7, pp. 22-25, Business Source Complete, EBSCOhost, viewed 3 November 2017.
Image 1: “DHL Successfully Tests Augmented Reality Application in Warehouse” Supply and Demand Chain Executive, http://www.sdcexec.com/news/12040626/the-wearables-and-augmented-reality-software-can-improve-the-picking-process-by-25-percent, accessed 3 November 2017