XR in Supply Chain Management

Last Updated: January 22 2020

developmentmanagementsupply chain

There are many moving parts to consider for supply chain management. Markets are competitive and always changing. Keeping up to date with the latest technology will help companies match the fast-paced conditions. New technology can shorten how long it takes to develop a product, lower the cost of managing a factory, and organize how orders are fulfilled. All these benefits increase the company’s productivity.

One technology that is changing how supply chains work is “extended reality” (XR). XR is an umbrella term that includes virtual reality (VR), augmented reality (AR), and mixed reality (MR). XR technologies are no longer just gimmicks for generating buzz. They’re widely used in both entertainment and business solutions.

This article outlines how XR can improve supply chain processes, decrease costs, and drive profits.

How XR is Innovating Supply Chain Management

XR has the potential to solve major challenges in supply chain management. Mixed reality simulations can help train employees and get everyone on the same page. With unified, well-trained staff, the companies can meet market demands.

Shorten Product Development Cycle

Keeping up with fast-changing market demands while staying competitive can be difficult. Products must be released when the market has an interest in them. To do so, manufacturers have to shorten the time it takes to develop a product.

Unfortunately, it’s not always easy to train and organize teams from many locations. For example: one team makes a physical prototype of the product. Other teams based in different cities can’t view or experience the prototype. Engineering flaws or quality issues might be missed early on in the design process.

XR enables a hands-on, visual way for teams to communicate. With this technology, teammates can see each other’s designs from anywhere in the world.

NVIDIA uses a 3D simulation to see full-scale models of their designs. In the XR environment, their engineers can view the layers of the model from the core to the outside. By seeing and sharing their full-scale models, engineers can agree on a design. The product then gets released to market in less time than it would have without XR.

NIVIDIA uses XR in their supply chain management.

Today’s technology can help developers and engineers communicate during the design process. With XR, teams at different locations can see a 3D visual representation of the product. Using 3D visuals helps teams stay on the same page, reducing errors that could cost the company. Plus, staying on top of problems as they happen will get the product on the market as soon as possible.

Lower Manufacturing and Operating Costs

It takes time and money to update and maintain a factory. If a plant needs to be shut down for maintenance, the company has to account for the

  1. cost of machine downtime
  2. cost of shutting down and starting
  3. safety concerns

Before upgrading equipment in the plant, an engineer might want to have a look at the equipment. The factory will shut down for as long as the engineer needs to assess the facility. Also, sending personnel in for upgrades or maintenance has safety risks.

By using XR, workers can see the factory before entering the space. In the XR environment, engineers can test an upgrade without shutting down production. Additionally, workers can learn the space before entering it, reducing safety risks.

Worker in Warehouse

Photo by Kateryna Babaieva from Pexels

XR can also be used to improve on-site maintenance and safety. For example, construction equipment manufacturer Caterpillar uses smart glasses and XR technologies. With smart glasses, employees can take step-by-step pictures of their operations. The images can then be worked into an XR simulation, which will be used to train other employees. Once the employees are trained in a safe, simulated reality, they’ll be better prepared for their job.

For a detailed case-study on how XR training can improve training, check out the video below:

Streamline Warehousing and Fulfillment

Today’s consumers expect fast shipping. To keep up with customer demand, companies might have warehouses in many locations. Knowing the warehouse is often key to making it run smoothly.

With XR visuals, managers can monitor the distribution centers and warehouses at different locations. When using virtual reality, managers are able to see the space. This visual helps them coordinate the warehouse’s stock without being on-site.

Additionally, XR can help warehouse employees manage their jobs. For example, DHL gives their employees smart glasses to help them organize packages. The glasses can recognize products, identify barcodes, show the factory layout, and more. By using smart glasses, even a temporary, untrained worker can efficiently navigate the warehouse.

HDL Picking Process

Increase Employee Productivity

Employee training, especially in manufacturing, can be a time-consuming and costly process. Too often, companies have to buy new equipment or close down the plant to train the employees. Having inexperienced workers operate complicated, costly, and sometimes dangerous equipment can impact productivity.

Using XR to train employees is highly effective and teaches them how to be safe on the job. With XR, more employees can be trained at the same time. New hires can finish their training and start their positions in less time than usual.

Companies who hire temporary or seasonal employees profit from XR training simulations. Temporary employees spend a large part of their employment in training. By cutting down on training time with XR, companies can see a return on their investment much sooner.


XR technology is driving supply chain innovation. Companies are using simulations to help their engineers communicate and to train their employees. XR technology is helping companies get products from design to production in a timely way.

Using XR in supply chain management helps refine product development. With less time developing, the company can release the product into the market in time. The sooner the company releases the product, the less the project costs them. Additionally, XR improves communication within the company. Better communication leaves less room for error, hazards, and other misunderstandings.

To find out if XR can help in your own workplace, consider where XR can help the most. Do you train many employees? Do you need to train them all at once? Could your engineers benefit from seeing VR models of their designs? Would 3D models of your warehouses or other properties help your managers? If the answer to any of these questions is yes, perhaps XR is the tool for you.

You can learn more about XR technologies by trying one of our workshops or requesting a demo from our website.


Melanie Leon

Content Marketer

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