Smart warehousing is here, and it’s slated to change the way we store, pick and pack goods in the years to come. A recent report from Research and Market estimates that the global smart warehousing market will total upwards of $3.94 billion by 2027.
But what exactly is smart warehousing — and what do you need to know right now?
We’ve covered innovations in new smart warehousing technologies in the past. In recent years, the adoption of IoT devices has been understood as a smart warehousing technology, one that by now has been adopted with reasonably high saturation in American logistics. The trend toward more technology has largely been piecemeal, with new hardware and software systems integrated into a more traditional warehouse pick and pack workflow. The transition to a smart warehouse, which puts automation and data-centricity at the forefront of its operations, is only now just beginning.
For many companies — ones not named Amazon — a smart warehouse sounds like a big investment. Still, more and more warehouses are taking the plunge and implementing highly sophisticated automation technologies. Is it worth it?
What is smart warehousing?
A smart warehouse is a logistics hub that is holistically centered around automation, tech enablement and data processing to streamline workflows and maximize efficiency. Cool, but what does that mean for you and your company?
Let’s quickly go over some of the key components in a smart warehouse system, and describe why they are so important to the future of moving goods.
- IoT technology – Handheld, network-enabled devices that are used to document goods in motion. They’re essential for moving cargo from the loading dock to shelves and into a delivery workflow. IoT technology is often housed in a smartphone device, and uses GPS to collect valuable efficiency data.
- RFID – A chip, QR code, or sensor that is used to give an identifying name and number to a package. RFID can be used for a number of different operations in the smart warehouse, from inventory management to tracking through last-mile delivery systems. It can also serve as an important IRL interface point for blockchain technologies. RFID technology has been used to track and document conditions of temperature-sensitive perishable cargo throughout the supply chain.
- AI – Big data analytics are the key driver in the smart warehousing revolution. IoT and RFID technologies generate tons of actionable information that can be used to refine and maximize output from logistics workflows. Small changes in storage and sorting strategy, personnel placement, even conditions in the yard can result in faster turnaround times (and improved customer satisfaction). Artificial intelligence makes it all possible.
- Robotics - No vision of the future would be complete without automated robots running the show. Automation helps to reduce the likelihood of serious accidents on the warehouse floor, and can help to speed along picking and packing with fewer workers (an important consideration in these pandemic times, when finding laborers to handle picking and packing can be difficult in many areas).
Challenges of implementing smart warehousing
While smart warehousing is absolutely on the rise, there are some mixed sentiments around it:
- Many workers fear that their jobs will be replaced by robots. In one Harvard Business review survey, 42% of negative responses from workers and supervisors stemmed from fears that automation in warehouses would lead to lost jobs.
- Learning curves. While some workers are optimistic about the labor-saving prospect of working alongside automated robots, some worry that training will be the downfall of the safe and effective deployment of the new technology. They may be onto something: Facing a number of challenges integrating automated systems with human warehouse teams, Amazon spent around $700 million in 2019 retraining 100,000 workers to work better with automation.
- Data security and privacy. With increasing reliance on technology to manage a warehouse cybersecurity becomes more of a forefront issue than it already is. If a cyber attack can shut down tech-side operations — and people are no longer trained to meet those demands without their devices — a cyber attack could be crippling for the company (and the supply chain in whole, depending on where it targets).
Benefits of smart warehousing
While there are challenges to implementing new smart warehouse technology, there are many benefits that come out of this opportunity as well:
- Improved safety – Despite safety measures employed in warehouses, human error still leads to a number of serious injuries and fatalities on the job site every year. Automating the most dangerous aspects of working in a warehouse takes people out of harm’s way — something that 42% of HBR survey respondents cited as a positive for automation.
- Better use of talent - A lot of everyday warehouse tasks are physically strenuous, repetitive, time consuming, or some combination of the three. Smart warehouse automation allows workers to put their time and energy into work that is more engaging and fulfilling.
- Fewer errors – Simple mistakes made by workers can lead to damaged goods, missed deadlines, and profit loss for the company. Smart warehousing automation also helps to overcome errors that are related to the current labor shortage.
Historically, there has been a ceiling to how productive a human-powered warehouse could be. People can only move so quickly, their movements can only become so efficient. Smart warehouse automation breaks through that barrier by making small technical adjustments, taking tedious tasks out of the hands of workers, and allowing for full-time 24/7 operations without full-time 24/7 staffing.
The result? Better turnaround times and more transparency about operations and conditions.
The smart warehouse of tomorrow is no longer a work of science fiction — it’s here. Companies like Amazon and Walmart are already using advanced robotic automation in concert with big data analytics to leverage their size advantage over upstart ecommerce retailers, established shippers and carriers, and pretty much everyone else on the supply chain.
To keep up, you need a partner with the tech savvy to help manage your products from the port to their final destination.