What is the role of technology in warehousing?

According to a study by the Material Handling Institute, the adoption of technology in warehousing leads to a 50% increase in productivity and a 25% reduction in operating costs. With the increasing demand for fast and efficient supply chain operations, the role of technology in warehousing is only expected to continue growing in importance.

As a software development company specializing in building custom warehouse solutions, we’d like to share more light on top trending warehouse technologies and how businesses can benefit from smart warehouse automation.

Top 5 smart warehouse technologies

1. Internet of Things

The Internet of Things is probably one of the most commonly used smart warehouse technologies, especially after Covid brought new labor and automation challenges into this industry. IoT in warehousing is used to perform multiple tasks. It goes beyond controlling individual processes and allows the creation of a unified system with synchronized data. The technology comes in various forms and prices. It can be as simple as sensors or tags installed on movable parts of the warehouse to collect performance data. They provide valuable information on vulnerabilities of operations and prevent mistakes and theft.

2. Warehouse management systems (WMS)

A platform with consolidated data on warehouse operations is called a warehouse management system. In a more tech-driven world, we can also hear the term “digital twin for warehouse management”. WMS is a convenient tool or web application that allows multiuser access. WMS is convenient because it stores analytics, and real-time stats, provides reporting and labor planning capabilities, allows remote control and management. Used with other automated elements, WMS enables inventory and supply chain visibility, building management, equipment maintenance, and smart resource planning.

3. Automated inventory control platforms

Automated inventory control panels allow tracking and reordering of the stock, generating documentation instantly, and presenting real-time data. By freeing workers from the time-consuming, mundane tasks of manually conducting inventory checks, businesses can scale faster. Such a platform can be easily integrated into WMS or exist separately.

4. Automated guided vehicles (AGVs) and autonomous mobile robots (AMRs)

AVGs are used to move things around the storage facility. Such equipment requires a marked path but can be applied without changing the warehouse layout. They are particularly handy for moving heavy containers. Unlike AGVs, autonomous mobile robots do not require an operator. Instead, they have special sensors that help them navigate through the warehouse environment. Autonomous vehicles and robots are considered to be an improvement in safety since they not only minimize the chances of mistakes but do not put employees at risk.

5. Collaborative robots

Collaborative robots are designed to assist people and are safe to interact with. They turned out to be a great response to the shortage of qualified personnel and rising labor costs. The research shows that 33% of the material handling market applies cobots in 2022. Performing routine, repetitive tasks, cobots work along with the human operator and complement their activities. Hence, employees can handle more complex and less hazardous assignments.

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Warehouse automation

Warehouse automation is a complex process that takes many forms. Depending on how large the facility is, it can perform thousands of routine activities daily. Manual control of a warehouse eventually becomes ineffective and leaves a lot of room for the implementation of new alternatives. Every stakeholder use warehouse technology to minimize operational expenses, ensure the safety of the workplace, remain competitive, and deliver the highest quality customer service.

Smart warehouse automation improves business operations significantly. Yet, it is an undiscovered phenomenon for many entrepreneurs. It is high time to get to the bottom of how it changes warehouse maintenance and management, when it is appropriate to use it and how to benefit from it.

What is warehouse management?

Businesses dealing with tangible products inevitably need warehouses, owned or rented. The goods that go for sale need to be sorted, stored, counted, inspected, and transported via convenient routes. The goal of every business is to deliver the product timely and with minimum costs and maximum ROI. Smart warehouse automation and management just like most operations businesses conduct, aim at customer satisfaction while generating dissent income.

Warehouse management consists of a chain of processes. Each process is valuable and needs constant improvement for the business to stay competitive. It is worth mentioning that warehousing has multiple stakeholders. These are warehouse owners, suppliers, and users. The users are the most diverse category since they are represented by multiple industries. Retail and wholesale distribution, healthcare, agriculture, and more industries require storage facilities. These industries push the evolution of warehouse management. Specific requirements for storing and transporting leave management teams of the facilities with a lot of tasks to handle.

Any complex process handled manually moves slowly and down the hill. To operate efficiently, automation is a must. Although the first warehousing practices date back to the 14th century, the process has not been completely discovered till now. It is quite dynamic and acquires new aspects regularly. New centuries come with new challenges for businesses. Use of resources, climate changes, social and economic crises, and more factors shape the approach used for warehouse management.

Essentials of the warehouse management process

The overall success of the warehouse depends on the smooth running of vital processes. The layout of the facility and labor costs are often seen as the main factors influencing expenses. However, the detailed analysis of operations shows that paying salaries and maintaining the building is not the largest expense that a company faces. Besides, automation is the answer to both, costly labor and possible drawbacks in the layout of the facility. To understand the changes and their tangible results, let’s look into the processes that every warehouse regardless of the size, deals with.

Warehouse management process

  • Receiving. Upon the receipt of goods, the warehouse has a lot of tasks to do. The products have to be counted, inspected for damages, unloaded, and stored. All these activities require data collection.
  • Put-away. From the dock where products were unloaded, they travel to their storage location. The packages usually have storing requirements and need to be transported in a certain way. The put-away process done incorrectly leads to a longer travel time of the goods within the facility, and correspondingly more resources are spent.
  • Storing. Every warehouse has to have a system according to which the storing places are allocated. It increases, or in case of chaotic storage decreases the capacity of the facility.
  • Pickup. The picking up is one of the most labor-intensive processes. It is done manually or with the help of equipment. This task can benefit a lot from technology and automation and it directly influences customer satisfaction levels.
  • Packing. Packaging aims at preparing the goods for shipment. It ensures that the order is ready to be transported and protected from damages. It is essential that packaging does not add much weight to the order.
  • Shipping. Shipping is the final process of warehouse management. It relies heavily on the proper picking and packaging of the order. As soon as items are collected, sorted, and packed, they are ready to be delivered to the customer.

Where is automation suitable?

Automation primarily aims at reducing human error and influence on processes. It streamlines the processes and leaves operators with a monitoring function. The benefits of automation are time and cost efficiency. Warehouse management systems were designed to optimize all processes that happen in the warehouse. Ideally, the system is supposed to fulfill the needs of the user. Hence, its functions can be customized. The greatest advantage that automation gives is the possibility to simplify any activity that happens in business. Automation in warehousing is suitable at every stage of the process from inventory management to shipment.

Types of warehouse automation

  • Digital automation. The focus of digital automation is on replacing manual operations in warehouse management. It implies the introduction of software that deals with inventory tracking, reporting, and collecting data. With customized solutions, automation can take place at any stage of the warehouse management process.
  • Physical automation. This type envisages equipment automation. The traditional hard labor of workers can be replaced with controlled vehicles like robots, drones, automated conveyors, cranes, etc. Another option is adding wearables that speed up and simplify the work of warehouse employees. It reduces the number of repetitive tasks and minimizes human labor.

Robots, guided vehicles, and carts are gaining more popularity among the owners of large facilities. They come in handy for businesses that struggle with finding workers to fulfill a large influx of orders.

How is automation used in warehouses?

Automation happens at all levels of warehouse management, from receiving the goods to shipping them.

  • Automated receiving. Whenever a warehouse receives goods for storage it needs to assess, inspect, and mark them. The details like quantity, weight, expiration dates, and other types of information are collected. The challenges that typically arise are misinformation, lack of information, loss of data on the quantity, etc. A possible solution is a mobile scanner for the items and database of all the inventory. The introduction of barcodes and scanners lifted the weight off the worker’s shoulders. It does not end with that, more options can be explored on how to store and manage such data. As an example, cloud software development allows you to store data on receiving orders and use it for more effective capacity management of the facility.
  • Put-away and pickup. While the put-away and pickup processes can get a lot from equipment automation, software solutions have an equally beneficial role. Both require the use of resources either machines or manual labor. One of the common trends in warehousing is asset tracking. With the use of sensors, tags, and connected devices the process of putting away the product can be optimized.
  • Automated storing. Storing seems to be a static process that does not require many optimizations. Yet, there is a lot of room for improvement there. As a result of this process, the warehouse receives a lot of data. It can be the location of goods, monitoring the conditions of storage, and availability. Such data is valuable for operational analytics, meaning adds to planning business strategy.
  • Shipping. Shipping is the main factor in maintaining good relationships with customers. The ultimate goal of any warehouse is to achieve a perfect shipping schedule and optimize the product travel time. Hence, data on shipment and delivery time becomes a valuable part of operational analytics.

Advantages of smart warehouse automation

The environment for warehouse operation is dynamic. It changes and leads to a more demanding and responsive approach. With that in mind, businesses have to be equipped with the right tools to adjust to the situation. All means of automation have proved to be working. They are easily adjustable, quick, and relatively cheap in maintenance. The main advantage that automation brings is flexibility. A gigantic warehouse can be reorganized and repurposed in a matter of days assuming it has the right tools. Besides the long-term perspective, automation gives visible daily results:

1. Reduces operational costs

Late shipment, returns, and documenting damaged items are top reasons for delayed payments, extra expenses, and additional working hours for managers. Regardless of the data amount that circulates within the facility, the loss of details builds up into a great obstacle on the way to increasing profitability. Automation is a step toward creating streamlined and flawless operations allowing to set of ambitious goals for expansion and growth.

2. Reduces manual labor and human error

No process is perfect and there will always be room for improvement. Start with freeing up the time for employees to think of their work and perform the tasks more efficiently. Repetitive tasks are at an even greater risk of error appearance since the attention span of a worker naturally decreases with time. Instead, technology never lets down and provides a constantly stable supply of accurate information.

3. Increases warehouse capacity

Warehouse layout is vital but it is not always easy to assess the capabilities just by taking a look at it. With the help of software, the managers can collect crucial data on the functionality of the warehouse and use it according to the incoming workload.

4. Improves inventory management

It is not always the best decision to place similar goods into one section of the facility, looking at demand works better. Special attention should be paid to unsold items to relocate, count, and inspect them timely. Manual management of inventory is a highly ineffective way for middle and large-sized companies. Automation is a way to stay on top of things and take the right measures to avoid losses.

What do warehouse tech and automation change?

Consider automation not only if you want to expand your business. A detailed analysis of the operations of any facility will show vulnerable spots. In most cases, they are related to inventory management, scheduling, and warehouse maintenance. Automation has a solution for most of the issues that a warehouse of any size faces.

1. Customer experience

If you own a warehouse it means you deal with various categories of clients. Without automation, there is a risk of drowning in operations and not focusing enough on customer experience. Dealing with employee schedules, task assignments, payrolls, and safety is a time-consuming process. Automation of internal operations drastically reduces unprofitable activities within the company.

2. Safety and cost of labor

Warehouse work is often associated with hard physical tasks. The cost of human labor rises, and the tasks are at times, dangerous. Automation changes the way a person performs the job, and shifts the function from performing hard labor to more intellectual monitoring jobs. Besides, it cuts the cost in case a sudden influx of shipments happens.
Automation allows for the minimization of risks in the workplace. It is applied to standard safety hazards, like moving heavy parts that can be performed by machines. In addition, it adds to transparency. When the worker does not need to perform manual labor and write down the number because these tasks are done by machines, the quality of work becomes better. It reduces stress, expenses, and time.

3. Security and transparency

Human error is unpredictable. It is often untraceable when the automatic system is not in place. The results of mistakes might become a ticking bomb and come up at the most inconvenient time. Hence, automation offers to provide traceability. Whether it is invoicing, shipment slips, or inventory lists, the system minimizes the risks of human error. For example, SKU barcodes serve as a great replacement for manual entry journals. For sure they require a human operator, yet the chances of error are reduced to zero when they only need to scan the code, not write it down on multiple sheets. In addition, it guarantees transparency.

Do you need warehouse management software?

Answer the following questions to understand if you need to implement software:

  • Are you struggling with fulfilling the incoming orders?
  • Are your workers complaining about labor-intensive shifts?
  • Are you handling your inventory manually?
  • Is your customer satisfaction rate decreasing?
  • Do you have constant delays with order fulfillment?

If you have at least one positive answer, here are the ways to find your solution to the problems.

4 steps to designing your warehouse management software

  • Collect data on business performance and vital indexes. Basic indexes that show a turnover of goods, inventory stats, manual labor use (schedule of personnel), and maintenance expenses, comprise a big picture of the business. Identifying the profitability of every process in the company allows you to find weaknesses and introduce reinforcements.
  • Specify desired areas of improvement. If you plan to expand your business or introduce any changes, the software designed according to your vision will become an irreplaceable tool.
  • Assess existing software (if any is present). In case you have some tools you want to update or integrate without a break of operations, you can opt for legacy application modernization.
  • Find your software development team. The right software development team can help you discover more potential for your business. With Euristiq, you can develop your concept, get a professional consultation, and realistic timeframe. Contact us for more ideas to streamline your operations.
  • Author Ivan Muts
  • Published January 10, 2023
  • Category IoT
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Case study: Smart warehouse management system
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