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What’s Next for the Smart Warehouse?

July 23, 2019

Warehouse managers need to invest in intelligent systems capable of keeping up with e-commerce and a changing consumer landscape.

For retailers, supply chain professionals, and warehouse managers, the e-commerce boom has presented both new opportunities and new challenges. With 2.14 billion digital buyers expected to tap into the e-commerce economy by 2021, supply chain companies have a chance to expand into promising markets, revamp their business strategies, and stake their claim in a field otherwise dominated by giants like Amazon.

To capitalize on this market shift, stakeholders need a strong foundation from which to operate. Between delivering the fast and free shipping consumers have come to expect and giving them visibility into the status of their shipments, businesses looking to compete in the digital marketplace need facilities specifically designed to handle the evolving nature of modern fulfillment.

That’s where smart warehouses come in. These facilities leverage emerging capabilities like IoT networks, artificial intelligence, and situational awareness software to streamline traditional fulfillment processes, improve accuracy across the logistics landscape, and support end-to-end supply chain visibility. Whether they invest in smart warehousing for their own gain, for the benefit of their clients, or some combination of the two, companies in the logistics space have a lot to gain from leverage smart warehouse technology.

So what makes a warehouse “smart”? While technology is part of the puzzle, making warehouses more intelligent relies on input from multiple stakeholders, including warehouse managers, floor personnel, and clients. By strategically deploying cutting-edge technology, warehouses will be better equipped to handle their specific needs and support their clients’ goals at a price point that makes sense for their budget.

 

What's Next for the Smart Warehouse

 

The Smart Warehouse of the Present

While the smart warehouses of the future will be revolutionary by today’s standards, compelling new technologies are already making waves in present-day logistics facilities. These capabilities may seem modest, but they’re forming the bedrock of tomorrow’s smart warehouse.

For instance, radio-frequency identification (RFID) offers improved functionality over traditional barcode scanning. Whereas barcodes need to be perfectly aligned with scanners to function properly (and often must be scanned one at a time), RFID tags use radio waves to track and log assets. Machines can, therefore, automatically monitor incoming packages and inventory levels with relatively little effort.

Beyond RFID, today’s smart warehouses are already tapping into AI capabilities, predictive analytics, and IoT networks. AI can help picking, packing, and shipping personnel to determine which boxes are the best fit for specific products. Predictive analytics can be used to anticipate surges in demand and help warehouse managers staff up accordingly. IoT networks can provide a wealth of data from across warehouses, contributing toward end-to-end supply chain visibility.

As interest spikes in smart warehouse technology, more facilities will adopt these capabilities. Indeed, research shows that spending on IoT platforms in the warehouse management space will top $19 billion by 2025.

 

Smart Warehouse Technology

With the development of smart warehouse systems already underway, it’s important for stakeholders to plan for the technologies coming down the pipeline. RFID, AI, and IoT all have a vital role to play in these facilities today, but they’re just part of a more comprehensive transformation that promises to improve critical fulfillment processes.

For example, robotics such as automated guided vehicles (AGVs) will have a significant impact on warehouse floors. AGVs will be able to support human personnel when preparing items for shipment, and emergent robotic technology may one day automate the picking, packing, and shipping process entirely. While some robotic platforms are already in use, even Amazon has acknowledged that it will take time before they have the full run of smart warehouse floors.

Additionally, technology such as blockchain and aerial drones have strategic appeal for warehouse managers. Blockchain offers an instantly updated, immutable ledger of transactions visible to all relevant stakeholders, which enables businesses, warehouse professionals, and customers to record transactions with confidence. Drones can also play a key role in scanning pallets, pinpointing inventory location, and reaching shelving that would be inconvenient and time-consuming for human personnel.

 

Smart warehouse technology

 

The Smart Warehouse of the Future

As new technologies come to scale, and existing smart warehouse improvements are further integrated into logistics infrastructure, the smart warehouse of the future will become a reality. These facilities will — if appropriately-designed — be greater than the sum of their parts. In other words, while discrete technologies such as RFID tags have an essential role to play in the fulfillment process, they will only represent one part of a far more extensive ecosystem.

Indeed, this ecosystem will rely on the cooperation of advanced hardware and cutting-edge software. In addition to warehouse management systems (WMS software) capable of supporting logistics roles such as monitoring inventory levels, automating billing, and managing mission-critical documentation like proof of deliveries and package labeling, software designed to enable situational awareness will prove essential.

This kind of warehouse software can integrate disparate data streams from multiple assets installed across smart warehouses (and the supply chain at large) and organize that information into actionable insights — an essential step toward attaining end-to-end supply chain visibility. Even for warehouse managers who believe they can manage logistics operations without this kind of visibility, investing in a common operational picture can help industry partners get the information they need to optimize toward their own objectives.

 

Investing in Smart Technology

Developing smart warehouse infrastructure is a challenge. Warehouse managers will need to work with key decision-makers to identify inefficiencies, prioritize areas of development, and effectively leverage advanced technology. In all of this, situational awareness platforms have the potential to mediate interactions between hardware, software, and stakeholders to ensure that everyone has the information they need — right when they need it.

By tapping into existing infrastructure and easily integrating actionable data, warehouses can give their partners real-time information from across their facilities, helping them proactively manage inventory, staffing, and fulfillment processes for everyone’s gain.