While extended reality (XR) technology — augmented reality (AR) or virtual reality (VR) — has been a longtime staple in gaming, it has recently gained popularity in supply chains after organizations began using AR and VR to train their employees and optimize their manufacturing. Though the adoption of AR and VR in supply chains will only continue to grow, it may take several years before we see the mass adoption of this equipment across various sectors. 

Augmented reality is an interactive experience in which a real-world environment is enhanced with computer-generated visuals and sounds. Virtual reality is an entirely computer-generated simulation of a 3D image or environment that can be interacted with in an almost-real way, using special pieces of equipment. 

VR and AR video games have been around for almost 40 years, but the use of this technology in supply chains dates back to only 2011, explains Dijam Panigrahi, the co-founder and COO of GridRaster, an extended reality platform provider that aims to solve manufacturers’ training and product building challenges. 

“We’re applying how XR and robotic competency can come together and facilitate automation at maintenance depots, warehouses and other places,” Panigrahi says. 

He describes how GridRaster is applying video game-based VR and AR experiences to real life, making this technology useful in supply chain training competency. 

“We are looking at translating those fantasy experiences into real-world skills,” he says. 

Panigrahi explains that GridRaster’s XR equipment is currently being used in the manufacturing of airplane wings, spacecraft parts and automobile components, adding that AR and VR have emerged as a crucial part of repair maintenance for these sectors. 

“Having a headset that can give you instructions, workflows overlayed on top of the asset you are fixing, and working through each and every instruction has been not only a time-saver but a life-saver as well because you’re ensuring those human errors can be completely eliminated,” Panigrahi says. 

Third-party logistics companies, like Kenco Group, have been interested in this type of technology for almost a decade, says Kristi Montgomery, Kenco’s vice president of innovation, research and development. She claims that Kenco has been using augmented reality equipment for picking in small warehouses since 2018. 

“I think the technology has come a long way, in the last three or four years particularly,” Montgomery says. “Certainly, we’re seeing a lot more functionality capabilities in the hardware devices that are being delivered over the last three years.” 

Jay Strother, president of the International Warehouse Logistics Association (IWLA), a trade association for 3PL providers, says Kenco is ahead of the curve because it has already invested significant time and energy into this technology. He thinks the COVID-19 pandemic caused more IWLA members to become involved in picking and packaging because shipment sizes shrank from pallets to straight-to-consumer deliveries. That in turn led to more companies embracing AR and VR technologies as their operations expanded. Strother adds that some of the IWLA’s partner companies have spent years using this equipment to train employees. 

“Our members have been using this technology, even before COVID,” Strother says. “I think our picking systems have really matured, and that’s what we’re seeing more and more amongst our members that provide those types of services for their customers.” 

Panigrahi notes that GridRaster’s VR and AR technologies drastically reduce the amount of time needed for training and manufacturing in the defense and aerospace industries, with some employees able to complete eight-week training programs in just one week. He also claims that a person using XR technology with one year of experience is able to outperform a person who has five years of experience in the same field. Montgomery adds that warehouse workers can now be fully trained in as little as 15 minutes with the help of AR and VR programs, which has led to Kenco seeing a 3% increase in warehouse worker effectiveness. 

Still, adoption of this equipment in supply chains remains a problem, says Alex Vasquez, the vice president of EmployBridge — one of the largest industrial staffing firms in the U.S. —and the head of the organization’s manufacturing unit. Vasquez estimates less than 10% of companies use this technology for training and manufacturing. He believes that older, more senior employees don’t know enough about the technology to support its adoption. 

“They may think it’s a half-baked technology,” Vasquez says. “The reason why I don’t believe there’s a double-digit rate of adoption for the technology is because it’s still fairly expensive to buy unless you’re working a volume deal. To purchase it, in some cases, doesn’t necessarily give you the return on investment (ROI) as quickly as you wanted it.” 

Strother and Montgomery both agree that managers of manufacturing and training operations will need to see a faster ROI if this technology hopes to become a staple of supply chains. Furthermore, making the equipment available to rent will make it more appealing for businesses of all sizes. 

Vasquez believes that one day, a majority of employee training and manufacturing may be done with extended reality technology, but we are still a far way off from this type of equipment being widely accepted and used. 

“We haven’t begun to scratch the surface with this technology in this use case,” Vasquez says. “I think it could be a decade or longer before we see mass adoption.”