A smart warehouse is a warehouse where various components of warehousing operations are automated for improved productivity, efficiency, and accuracy. Warehousing is undergoing a tech-driven revolution as more and more companies adopt smart technologies to cut costs, optimize operations, and improve the overall supply chain efficiency. This article explains the various steps involved in building a smart warehouse in 2021.
Table of Contents
What Is a Smart Warehouse?
A smart warehouse is defined as a warehouse where various components of the warehousing operations are automated to improve productivity, efficiency, and accuracy. This provides flexibility and additional capability to the warehouse processes as well as its employees.
In a manual warehouse, workers move around with lists, pick products, load them into carts, and then deliver them to the shipping docks. However, in a smart warehouse, every little task is automated — orders are received automatically, after which the system confirms if the products are in stock, following which the pick-up lists are sent to robot-carts that place the ordered products into containers, and finally these products are delivered to workers for the next step.
Key Features of Smart Warehouse Systems
Smart warehouse systems are a consequence of various interconnected warehousing technologies working together. They define a technological ecosystem where goods are received, identified, sorted, organized, and pulled for shipment automatically. While employing smart warehousing, one must bear in mind some of the common traits that mark a successful smart warehouse system. Some of these traits are:
1. Agile Warehouse Management Â
As warehousing operations continue to become more complex, smart warehouses need to quickly adapt to manage the rapidly changing variables in today’s world. The smart warehouse system should constantly strive to optimize the movement of products from storage to shipment. Besides, smart warehousing operations should also look out for temporary storage opportunities and third-party logistics (3PL) providers in case of temporary stock overflow.
Agility also plays a significant role in various software technologies used in a smart warehouse. This implies that all systems should be able to work with numerous platforms, sales systems, and other warehousing functionalities. One can consider using the software as a service (SaaS) solutions, as they are often considered standard in many industries.
2. Warehouse Scalability
Smart warehouses need to be scalable enough with an eye on the future. This way, they can be in a position to accept large product influxes and new product releases at any moment. This brings us to another impactful feature of SaaS solutions. Adding new features to the smart warehousing systems can be difficult if you have an on-premise cloud solution.Â
In some cases, the entire system may need to be taken down while updates are completed. This can lead to a major slowdown within the warehouse. A SaaS solution does not struggle with this limitation as updates can be completed on the fly, and new inclusions can be rolled out without taking a hit to efficiency.
3. Warehouse Visibility
As technology continues to progress, data visibility has become a must-have feature for most software tied to supply chain functions. This is very significant today. As supply chains and warehousing operations become more complex, software solutions should be ready to update and store data immediately. Customers and stakeholders want to tap into the real-time data provided by the smart warehousing system and see where their product is right now.
Thus, smart warehouses should allow interested parties to quickly find what they need. Not only is data visibility important when considering client retention, but it also provides a host of useful information to the operation itself. Real-time data gives operators a bird’s eye view of the entire warehouse and how its various divisions are performing. This can help identify inaccuracies in inventory or delivery timing and better understand where they are originating from. This way, smart warehouse operators can take action before things get out of hand.
Also read: How to Build Smart Businesses (and Not Just Smart Factories)
Building a Smart Warehouse in 2021
A smart warehouse comprises various interconnected components and technologies, all working towards a common goal. Every piece of this puzzle ensures that the warehouse runs optimally. Hence, to build a smart warehouse, one must ensure efficient communication between those components. Here is a list of the key components that should be a part of your smart warehouse.
1. Automated guided vehicles (AGVs)
Automated guided vehicles (AGVs) promote material handling and cargo transport, often replacing forklifts. Besides that, warehousing robots handle the picking and packing of goods. Essentially, they’re automated, more maneuverable pallet jacks.Â
They move faster than humans, move more goods at once, and even identify the optimal route for picking up the necessary products. It has been reportedOpens a new window that Amazon now has more than 200,000 mobile robots within its warehouse network. Working alongside human workers, this set of robots helps the company to fulfill its warehouse needs.
This technology is less time-consuming and reduces costs while eliminating the inherent risks of human effort in the movement of goods.
2. Artificial intelligence
The use of artificial intelligence (AI) is exploding in every industry, not just in warehousing. The main reason being the productivity-boosting capability of AI with minimal errors.
Consider an example where AI helps warehousing robots to find the most efficient route for picking products. It can also be used to determine the best box type for a shipment based on the type, number, size, and weight of the products. Some warehouses have even been able to implement machines that can pack products — they use AI to pack products in the most space-efficient manner. Companies can efficiently use computer vision and machine learning algorithms for inventory management and route optimization.
Capabilities such as these are helping warehouse operations drastically reduce their operating costs. In the aftermath of the COVID-19 pandemic, one can only expect AI to positively impact the supply chain management market. According to a 2019 reportOpens a new window by Meticulous Research, AI in the supply chain market is expected to grow at a CAGR of 45.3% from 2019 to 2027 to reach $21.8 billion by 2027.
3. Drones and cobots
Drones are being leveraged for safe and easy access to remote, hard-to-reach locations within a warehouse. Both faster and more accurate than manual practices, drones are equipped with cameras, sensors, RFID technology, or barcode scanners. They are used to locate items, conduct stock takes, and cycle counts, among other inventory tasks.
On the other hand, cobots (or robots) work collaboratively with humans, automating the work such as heavy or repetitive tasks that include machine feeding, material handling, or assembly tasks. Amazon’s patentOpens a new window ‘Aerial Fulfillment Centers’ for improved drone delivery received a grant in July 2018, which could not just promote drones in warehouses but also help in developing future floating warehouses.Â
4. The internet of things
IoT involves several internet-enabled devices that communicate with each other and share data. In smart warehouse systems, this means that robots can communicate with all the tech systems it needs to, including a warehouse management system (WMS).
For example, a warehouse receives a product. As the shipment is received, a radio-frequency identification (RFID) scanner scans the tags, telling a WMS which and how many goods were received. Here, RFIDÂ helps organize and control inventory. The WMS then communicates with robots, informing them of where those goods should be stored on the warehouse floor.
All of this happens automatically and seamlessly, without losing any crucial information along the way. Without IoT, a human worker would have to complete each step of the process manually. This is prone to error, especially with the massive amount of information about each product that flows through these systems. But thanks to IoT, humans are all but eliminated from the scene, thereby speeding up the process and reducing errors.
According to a 2019 reportOpens a new window , the Global IoT in Warehouse Market is expected to reach USD 17.93 Billion by 2025 growing at a CAGR of over 21.21% by the end of 2025.
5. Mobile devices-based warehouse mobility
With desktop computers becoming obsolete, automation now has ‘data’ on its radar. Mobile devices and apps increase efficiency by allowing employees to work on the go and access data simultaneously.
Smartphones are freeing employees from the confines of a desktop. They are bringing new functionalities and computational power to the warehouse systems for faster goods management. Video conferencing, picture and video imaging, cloud integration, voice and face recognition are all technologies that bring major advantages.
Images can help personal locate lost items. Quality inspections and approvals, for instance, can be performed through a video conference call. Cloud integration can help employees track a shipment while on the warehouse floor, and so on.
6. Warehouse management systems (WMS)
The use of a WMS hits the final nail in the coffin of a smart warehouse technology. A WMS solution allows you to keep track of how efficient your warehouse’s day-to-day operations are and if you can improve on anything specific.
Since most WMS solutions can collect real-time data and create visual reports, they help reveal any deficiencies in warehouse processes. After viewing a WMS report, one can take appropriate action to fix any issues and get their operations back on track.
Also read: Demand for Warehousing to Rise in 2021, Automation Holds Key
In conclusion
Smart warehousing brings a significant amount of optimization to any warehouse operation. The best smart warehouse solutions automate almost the entire operation, right from suppliers to customers, with minimal errors.
Automation is on the rise and will continue to be adopted by more and more warehousing companies. Today’s deep tech is creating an ecosystem of ‘smart’ warehouses that provide visibility and brings agility, flexibility, and responsiveness that supply chains need.Â
Do you think the above tips can prove handy to build a smart warehousing facility in 2021? Did we miss any? Comment below or let us know on LinkedInOpens a new window , TwitterOpens a new window , or FacebookOpens a new window . We’d love to hear from you!