What is a smart warehouse and why should you consider it? Take Amazon for instance: the online retailer processes hundreds of orders in a second. The company used Internet-connected robots to gather and move merchandise items around the warehouse. Thus, it could achieve this level of efficiency and cut the need for the human workforce.
However, this is just one of the applications of smart warehouse systems. So if you’re wondering: “How can I make my warehouse more efficient?” Continue reading to find out.
What is a smart warehouse?
A smart warehouse uses IoT, warehouse management software and another tech to automate workflows and drive efficiency. This way, machines, computing devices, and objects are linked into a single network. Via this network, you can transmit the instantly-collected data, analyze it and use it to your benefit.
However, most retail, manufacturing, and transportation agencies still use traditional methods to manage sales, storing, picking and supplying goods. Could and should they be enhanced with smart warehouse management systems?
Smart warehousing: major benefits for your business
1.Automated decisions & processes grow productivity
Without further explanation, this might sound a bit scary. What kind of decisions could smart warehousing automate? What if there is a system mistake? The outcomes could be severe.
Well, thankfully, all the decisions are based on a detailed data analysis. Here is an example: using smart algorithms and data collected during the previous months, a smart warehouse management system can calculate how often and how much of each product will be ordered. Based on this, it could distribute the incoming items between warehouse shelves to ensure easy & fast access to the most in-demand ones. Once someone orders an item, WMS system could send an alert for a robot to pick the item in the necessary quantity and bring it to the packaging stage.
That’s exactly what the largest dedicated online grocery retailer Ocado does. It uses AI to predict the upcoming demand for each specific item. Then, it uses warehouse management software and connected robots to place the most ordered items on the top of the pack and those with a low demand – at the bottom. This kind of automated decisions allowed Ocado to create and process 65 000 orders a week.
2. How can I make my warehouse more efficient?
Traditional warehouses are labor-intensive. They involve a huge amount of human workforce and manual operations that increase an error risk. Smart warehousing reduces the need for human work. Entrusting repetitive tasks to the smart Internet-connected machines prevents the loss or damage caused by personnel.
The key point is not to replace your employees but to add value to their work by doing more in less time. 93% of US respondents believe that automation is changing their work life for the better. Instead of walking between the shelves in search of the item and then transporting it manually, they can simply find its location by the Internet-connected sensor and let a robot do the work. This way, you can speed up order processing and make your employees focus on other business-specific tasks.
The fact is, a machine can process 93 000 trillion operations per second. By properly integrating AI and IoT into your business operations, you can get the never-seen-before outcomes.
Alibaba e-commerce company launched an IoT-powered robotic warehouse to handle the growing demand for its products. A smart warehouse system distributed the parcels, connected staff outside and inside the building and controlled the vehicle movement. As a result, Alibaba’s smart warehouses could handle 812 million orders during the shopping festival. The company’s tech director states that a smart warehouse could process 50% more orders than a standard one.
3. Track your goods & activities in real-time throughout the supply chain
In traditional warehouses, employees have to wait for days or even weeks for reports to come. With IoT, you can get real-time insights into the traffic flows and optimize them right away. For example, you might notice that large amounts of items are moved the same trajectory simultaneously and distribute these flows between multiple branches for faster & safer goods arrival.
Via an Internet-connected screen you can instantly view the heatmaps of personnel and other data all gathered in one place. So instead of looking at multiple paper reports and reacting afterward, engineers can view and adjust instantly. This offers a whole new approach to warehouse management.
IoT sensors installed inside the tracks help to monitor temperature and humidity conditions. This prevents any damage or food spoiled due to wrong transportation conditions. All the data is sent from IoT sensors to warehouse management software via the Internet.
The real-time tracking opens up immense opportunities in terms of sales and customer service. IoT sensors attached to products could send notifications to the central database once a particular item is back in stock. Through your WMS system, you could see the exact time and amount of delivered products and update your users on the new arrivals. It is revealed that back-in-stock emails generate a 22,45% conversion rate among customers. Likewise, you could monitor the status of each particular product through the WMS software.
To use warehouse automation to the fullest, transportation tracks, shelves, and goods as well as warehouse management software should be all connected into a single IoT ecosystem. However, this requires a great deal of planning and transformation.
Alternatively, you can start small and scale up later. The primary element of a smart warehouse is a warehouse management system. So you might implement it first and extend to AI and IoT later.
4. Save money
A smart warehouse system can also save you money. Thanks to smart equipment monitoring, you can get timely alerts about a high downtime risk and save on equipment repair. Likewise, smart lighting and temperature sensors let you omit the wastage of the resources and ensure the optimal conditions. For instance, once personnel leaves your warehouse department, the IoT system could recognize this instantly through the movement sensors and turn off the lights.
Key components of smart warehouses
RFID, IoT sensors and AI algorithms are all components of smart warehousing. Let’s explore each of them shorty.
Artificial Intelligence Software
AI analyzes the collected data to optimize your decisions. For instance, it might use previous-month ordering statistics, analyze reports, make calculations and forecasts about the product demand for the next month. Thus, you can optimize your placement of goods and order amounts.
Another application is AI-powered robots. These might take into account weight, size and type of each item to find the optimal spot for storing it and transport it there quickly.
RFID (Radio-frequency identification) tags
These are tags attached to individual goods or packages to transmit information to a central database. All the data is sent via electromagnetic signals. The products with RFIDs can be scanned on a distance as well for easier storing, finding and managing of items.
You can scan up to 200 tags at once, track their location, number of days before expiration and more. Based on this, you can make accurate and instant decisions.
IoT and Wearables
Connected shelves might inform you of the low stock of items, theft or damage every time it happens. Since IoT sensors have gained a longer battery life and their costs have decreased, it makes sense to start with these handy tools in your warehouse management.
We have also seen connected AR glasses that show directions, scan barcodes and provide instant data needed for inventory checks. They enable hands-free experience for personnel and simplify their everyday duties.
The fact is, entire work processes can be optimized with IoT systems. If you need to speed up your packaging and shipping of the inventory, deliver goods to customers fast and with few flows, IoT might be just what you need.
Warehouse management software
Basically, warehouse management software puts all your daily operations and processes into a single place for tracking and management.
There are 3 types of WMS software you can use:
- WMS system as a standalone solution
Since this type of software works in isolation from other enterprise systems, it takes extra effort to customize and integrate it with other processes.
- Cloud-based WMS system
This type of software is flexible, scalable and relatively easy to recover in case of malfunctions.
- WMS system integrated into ERP as a module
Via an ERP-based system, you can handle accounting, shipment, and parts that are still to be manufactured before the order is ready for delivery.
To choose the proper type of warehouse management system, first of all figure out your requirements and business needs. What type of data will it handle? What processes would you like to monitor?
Smart warehouse management systems offer clear advantages over traditional working methods. We can already see new IoT use cases in logistics and smart warehouses appear. You too can grow your efficiency with moderate investments. Ask us how smart warehouse solutions can help your business and make it advance now.