Virtual reality


Utilizing virtual reality to drive supply chain innovation

Considerations to improve operations

Given the significant technological improvements of the last five years, virtual reality is being leveraged for supply chain operations, driving innovation across industries. Trends show that the adoption of virtual reality devices can help organizations with product and process design, virtual collaboration, and experienced-based learning.

Virtual reality: The past, present, and future of artificial environments

Virtual reality (VR) is an artificial, computer-generated, three-dimensional environment that a user can experience through sensory stimuli.1 The user is able to interact with the environment in a seemingly real or physical way through specialized electronic equipment, including goggles, simple head-mounted displays, and 3-D images.

Virtual reality technology has evolved tremendously since its inception in the late 1950s.2 The last five years, in particular, have seen an incredible uptick in both capabilities and use of VR devices; they have shifted from niche devices primarily for hard-core gamers to devices with more widespread adoption and applications for both consumers and enterprises. Forrester predicts that the adoption of mid- to high-end VR headsets will be 52.3 million by 2020, increasing substantially from today's market of approximately 11 million.3

Barriers to mainstream adoption remain in the areas of computational power, pricing, security, and user perception. Many large companies are pouring money into both hardware and software development, and it is only a matter of time before more barriers continue to fall and the full enterprise capabilities are realized. Traditional PCs and smartphones will continue to provide competition as they take on increased capabilities around reality. However, as VR applications continue to expand and prices continuously decrease, the VR market alone could reach up to $48.5 billion by 2025.4

Benefits of VR in the supply chain–The value drivers

Through our research, we believe that the successful adoption of VR applications in the supply chain depends on the alignment of technology value drivers with a company's use cases, operational needs, and organizational readiness, not just a broad-based approach built on the current popularity of the technology.

  • Interactive visualization capability. Companies are starting to leverage the technology within their design organizations to enhance CAD functionality and engineer employee engagement. The VR-enhanced designs allow for visualization capabilities previously unavailable; this allows product engineers, architects, and designers to rapidly shift through multiple designs and evaluate them on the spot.
  • Ability to separate presence from a physical location. Utilizing VR's audio and video capabilities with different field of viewpoints, employees can collaborate with other colleagues around a shared visualization or interact through virtual avatars. Access to a platform is achieved in various parts of the world instantly, leading to enhanced virtual collaboration through real-time simulations and immersive "games." These interactions not only drive down costs but also give manufacturers and suppliers further insight earlier in product and process development, especially important across distributed supply networks. The efficiency gains across supply chain operations are evident.
  • Data capture and visualization capabilities. These are transforming the supply chain from product development all the way to the end customer. Leveraging interactive 3D data visualization not possible on 2D screens will assist with complex decision making and help companies see the interdependencies and impact of certain decisions on operations. Using VR applications and devices to facilitate analysis and rapid decision making will address serious pain points within and across organizations.
  • Ability to create high-fidelity virtual environments. This will have a great impact on human resources within supply chain organizations. Many industries, including industrial products and services, energy, and manufacturing, have difficulty preparing employees for high-risk environments. VR can help employees quickly make the best decisions possible in safety-critical environments: developing the ability, for example, to identify, prioritize, and analyze situational variables indicating an oil well is about to enter a dangerous condition or that a machine is about to fail.

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Tune into this episode of our User Friendly podcast series to hear, Allan CookTony Demarinis, and Kaitlyn Kuczer dive into the industry implications of AR/digital reality.

The commitment of virtual reality and operational considerations

To adopt augmented and mixed reality in supply chain operations, start by understanding where you will use the technology and how it will connect to your existing systems. Each organization has a unique operating model and the adoption of VR applications should match strategic objectives. The following five attributes can help shape your decisions and determine the potential overall return on your investment.

  1. Functional deployment
  2. Technology infrastructure
  3. Security
  4. Regulations
  5. Operating environments and perception

Leveraging industry-leading practices can help you define an implementation strategy for virtual reality in your organization. As with any new strategy, your goals for incorporating virtual reality into your supply chain should match your organization's overall vision, goals, culture, and strategy. And as for the case with other technological shifts in the supply chain, simply placing it in the organization is not transformative; the real value comes from the process to select, design, apply, and integrate the technology.

For further analysis of VR innovation and optimization in your supply chain, and an in-depth information of our research, download a PDF of this report.

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Explore more
Interested in learning more about supply chain trends? View our other reports on supply chain innovation.
Visit our Supply Chain & Network Operations page for more articles, videos, and insights on world-class supply network capabilities.

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