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In this installment of the AI in Supply Chain series (#AIinSupplyChain), we explore how Pathmind, an early-stage startup based in San Francisco, is helping companies apply simulation and reinforcement learning to industrial operations.
Bringing simulation and reinforcement learning to industrial operations
I asked Chris Nicholson, CEO and founder of Pathmind, “What is the problem that Pathmind solves for its customers? Who is the typical customer?”
Nicholson said: “The typical Pathmind customer is an industrial engineer working at a simulation consulting firm or on the simulation team of a large corporation with industrial operations to optimize. This ranges from manufacturing companies to the natural resources sector, such as mining and oil and gas. Our clients build simulations of physical systems for routing, job scheduling or price forecasting, and then search for strategies to get more efficient.”
Pathmind’s software is suited for manufacturing resource management, energy usage management optimization and logistics optimization.
Pathmind’s secret sauce
As with every other startup that I have highlighted as a case in this #AIinSupplyChain series, I asked, “What is the secret sauce that makes Pathmind successful? What is unique about your approach? Deep learning seems to be all the rage these days. Does Pathmind use a form of deep learning? Reinforcement learning?”
Nicholson responded: “We automate tasks that our users find tedious or frustrating so that they can focus on what’s interesting. For example, we set up and maintain a distributed computing cluster for training algorithms. We automatically select and tune the right reinforcement learning algorithms, so that our users can focus on building the right simulations and coaching their AI agents.”
Echoing topics that we have discussed in earlier articles in this series, he continued: “Pathmind uses some of the latest deep reinforcement learning algorithms from OpenAI and DeepMind to find new optimization strategies for our users. Deep reinforcement learning has achieved breakthroughs in gaming, and it is beginning to show the same performance for industrial operations and supply chain.”
On its website, Pathmind describes saving a large metals processor 10% of its expenditures on power. It also describes the use of its software to increase ore preparation by 19% at an open-pit mining site.
Given how difficult it is to obtain good quality data for AI and machine learning systems for industrial settings, I asked how Pathmind handles that problem.
“Simulations generate synthetic data, and lots of it,” said Slin Lee, Pathmind’s head of engineering. “The challenge is to build a simulation that reflects your underlying operations, but there are many tools to validate results.
“Once you pass the simulation stage, you can integrate your reinforcement learning policy into an ERP. Most companies have a lot of the data they need in those systems. And yes, there’s always data cleansing to do,” he added.
AI and machine learning in mining
As the customer success examples Pathmind provides on its website suggest, mining companies are increasingly looking to adopt and implement new software to increase efficiencies in their internal operations. This is happening because the industry as a whole runs on very old technology, and deposits of ore are becoming increasingly difficult to access as existing mines reach maturity. Moreover, the growing trend toward the decarbonization of supply chains, and the regulations that will eventually follow to make decarbonization a requirement, provide an incentive for mining companies to seize the initiative in figuring out how to achieve that goal by implementing new technology
The areas in which AI and machine learning are making the greatest inroads are mineral exploration — using geological data to make the process of seeking new mineral deposits less prone to error and waste; predictive maintenance and safety — using data to preemptively repair expensive machinery before breakdowns occur; cyberphysical systems — creating digital models of the mining operation in order to quickly simulate various scenarios; and autonomous vehicles — using autonomous trucks and other autonomous vehicles and machinery to move resources within the area in which mining operations are taking place.
According to Statista, “The revenue of the top 40 global mining companies, which represent a vast majority of the whole industry, amounted to some 692 billion U.S. dollars in 2019. The net profit margin of the mining industry decreased from 25 percent in 2010 to nine percent in 2019.”
The trend toward mining companies and other natural-resource-intensive industries adopting new technology is going to continue. So this is a topic we will continue to pay attention to in this column.
If you are a team working on innovations that you believe have the potential to significantly refashion global supply chains, we’d love to tell your story at FreightWaves. I am easy to reach on LinkedIn and Twitter. Alternatively, you can reach out to any member of the editorial team at FreightWaves at [email protected].
Dig deeper into the #AIinSupplyChain Series with FreightWaves:
● Commentary: Optimal Dynamics — the decision layer of logistics? (July 7)
● Commentary: Combine optimization, machine learning and simulation to move freight (July 17)
● Commentary: SmartHop brings AI to owner-operators and brokers (July 22)
● Commentary: Optimizing a truck fleet using artificial intelligence (July 28)
● Commentary: FleetOps tries to solve data fragmentation issues in trucking (Aug. 5)
● Commentary: Bulgaria’s Transmetrics uses augmented intelligence to help customers (Aug. 11)
● Commentary: Applying AI to decision-making in shipping and commodities markets (Aug. 27)
● Commentary: The enabling technologies for the factories of the future (Sept. 3)
● Commentary: The enabling technologies for the networks of the future (Sept. 10)
● Commentary: Understanding the data issues that slow adoption of industrial AI (Sept. 16)
● Commentary: How AI and machine learning improve supply chain visibility, shipping insurance (Sept. 24)
● Commentary: How AI, machine learning are streamlining workflows in freight forwarding, customs brokerage (Oct. 1)
● Commentary: Can AI and machine learning improve the economy? (Oct. 8)
● Commentary: Savitude and StyleSage leverage AI, machine learning in fashion retail (Oct. 15)
● Commentary: How Japan’s ABEJA helps large companies operationalize AI, machine learning (Oct. 26)
Author’s disclosure: I am not an investor in any early-stage startups mentioned in this article, either personally or through REFASHIOND Ventures. I have no other financial relationship with any entities mentioned in this article.