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Harvard Business Review

How Physical Operations Organizations Are Using AI to Protect Workers and Increase Efficiency

The world of physical operations forms the bedrock of our global economy, contributing to more than 40% of the world's gross domestic product (GDP). Manufacturing, construction, energy utilities, transportation, essential public services—these and other industries are the ones that build our cities, power our homes, and deliver the goods we rely on daily. I spend a lot of time with customers in these industries, and over the past few years, I've noticed a fundamental shift in how they operate. By and large, these blue-collar industries were late to adopt technological waves like smartphones, cloud computing, and big data. But they're on the forefront of adopting AI. Why? Why Physical Operations Is Embracing AI The foundation, both technological and demographic, of these industries' adoption of AI was laid over the past decade, and the impact is profound. Several critical factors are creating a fertile ground for this rapid AI adoption in physical operations. First, changing demographics are playing a key role. While workers still join operations industries because they don't want to work behind a desk, a new generation of frontline workers grew up with smartphones for their personal lives, and they expect their workplace technology to similarly make their jobs easier, safer, and more efficient. Second, operations digitized over the past decade. While operations lagged behind industries like finance, retail, and healthcare, it's now largely brought its data and processes into the cloud—just in time for AI. Third and most important, the physics of operations make the potential for impact truly massive. These remain the most dangerous jobs, and AI measurably saves lives (and insurance premiums). And operations are cost-intensive. Between capital expenses, fuel and energy costs, intensive labor demands, and fierce competition, margins are notoriously thin—and even a few percentage points of efficiency gains translates to a significant bottom-line impact. AI on the Frontlines The most compelling AI transformation I'm witnessing falls into two categories: enhancing worker safety and boosting operational efficiency. Safety On the safety front, AI is proving to be a powerful ally in protecting workers. While we marvel at the robotaxis now driving passengers in a handful of cities, similar technology powers AI dash cams in millions of commercial vehicles, acting as copilots to drivers and keeping them safe on the road—reducing accident rates by as much as 50% across tens of thousands of organizations. The City of New Orleans recently deployed AI dash cams in its ambulance fleet to support the thousands of EMTs, paramedics, and other drivers who respond to nearly 70,000 emergency calls annually. The results over 12 months were remarkable: a 37% reduction in speeding and a 46% decrease in mobile phone usage. The newest generation of AI tech can also recognize defensive driving maneuvers, and AI-captured footage can help exonerate drivers in disputed incidents. That tends to turn drivers into enthusiastic adopters of—and even ambassadors for—the technology. Building on the success of driver safety, organizations are beginning to deploy AI to keep workers safe across more and more diverse environments. AI can now detect hazards from a smartphone photo and provide proactive training or tailored safety checklists. And a new generation of wearable technology, enabled by the network of millions of internet-connected operations assets, creates new lifelines for lone workers. Efficiency Safety remains the top priority in operations, and efficiency follows closely behind. AI in the form of applications like predictive maintenance, route optimization, and specialized chatbots for back-office teams is enabling efficient use of labor, fuel and energy savings, and higher utilization of capital assets. By implementing AI-powered route optimization, Mohawk Industries, the largest flooring manufacturer in the world, achieved state-of-the-art efficiency in shuttling raw materials between sites and delivering products to retail partners. Across its three North American fleets, Mohawk's AI-driven efficiency translated into more than $7 million in savings from route optimizations and an improved experience for drivers, who no longer face long waits for dispatch assignments and are paid promptly upon shift completion. Similarly, Sterling Crane, one of Canada's largest mobile crane rental companies, used AI for preventive maintenance, saving over $3 million. For Sterling, an in-shop repair is vastly more cost-effective than dealing with a crane breakdown in a remote location where temperatures can plummet to -81°F. The Start of the AI Era A key observation here: In none of these examples does AI substitute for human labor. Instead, it is acting as a partner on safety and efficiency, and it even helps with team engagement and retention. In a climate where the competition for skilled workers remains intense, forward-thinking organizations are now putting AI to work to attract and retain talent through programs like driver recognition and digital reward systems. Increasingly, the gap between technological leaders and those lagging behind is growing in this era of swift AI advancements. For those organizations that haven't fully embraced AI, the good news is: it's still early days. Operations leaders everywhere still have time to jump aboard this rocket ship. I can't wait to see all the amazing new worlds we're just beginning to explore.