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. Among the most impactful events that had both positive and negative influences on implementing smart warehouse technologies were:
- Global warming gave rise to extreme weather conditions causing floods which in turn disrupt shipments or heatwaves that lead to equipment failure. Just when the companies deal with optimizing the logistics routes, nature threw another challenge to their plate. Yet, it is not the last one. Global warming also led to an increase in energy prices. Hence, businesses across all industries had to implement sustainable, energy-efficient plans of operations.
- The COVID-19 pandemic forced businesses to minimize human labor temporarily due to the need for social distancing. For a moment, the world stopped, but the rising demand for goods and services promoted the implementation of contactless delivery methods and reduced human involvement. For example, giants like Amazon, UPS, and Walmart were quick to respond to the pandemic by introducing automated storage and retrieval systems that helped them minimize human contact and ensure the safety of their employees.
- Globalization of the market prospered. Mainly because of the e-commerce platforms, the borders stopped their existence. The goods could be sold in any part of the world, and it led to the need for as much automation as possible to be able to satisfy the global demand.
While these factors can be looked at as challenges, they are also the drivers of progress. Warehouse automation became a number one priority for most companies not only to maintain a competitive advantage but to be able to satisfy the demand. 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.
What is warehouse automation and how it can help your business?
Warehouse automation means improving the accuracy and efficiency of each warehouse flow component from receiving goods to them reaching the destination. Another aspect crucial for businesses is energy efficiency. The costs of energy consumption are getting higher, and every organization looks for ways to lower expenses with custom energy management software.
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.
Warehouse management process and automation needs
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, implementing smart warehouse automation technologies 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.
Looking at warehouse flow is crucial to understand the automation needs of your company. If one of the processes lacks accuracy it causes lags in the flow which in turn negatively influences order fulfillment.
How are automated warehousing systems used?
The point of implementing smart warehouse technologies and automation is in optimizing every element of the flow to minimize waste, reduce time-consuming routines, and improve the overall performance of the facility, making it resilient and sustainable in the face of global challenges. Automation happens at all levels of a warehouse management process, 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.
Top 5 smart warehouse technologies
There is no doubt that automated warehousing systems are here to stay and they are still evolving and acquiring new functionalities. Here are some of the leading smart warehouse technologies that are taking over the industries.
1. Internet of Things
The Internet of Things is probably the most commonly used smart warehouse technology, especially after COVID brought new labor and automation challenges into this industry. IoT in warehouse automation 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. RFID technology
RDIF asset tracking technology came as a more advanced alternative to barcode scanners. Its main advantage is that the tags can be read remotely. In practice, it allows personnel to decrease the need for moving around the facility wasting time to find objects. Walmart has been working on the implementation of RDIF since 2011 and plans on going beyond the warehouse facilities, in particular, to improve in-store inventory accuracy. Another benefit of this warehouse technology that makes it so desirable and wanted by businesses is speeding up the inventory management process. Companies who prefer old-fashioned approaches to conducting business will struggle considering the so-called “Amazon effect” which gains more and more power. Amazon has changed the perception of delivery for the customer and created a fast shipping concept. By digitalizing their processes, they managed to be fast and efficient, so their competitors have to keep up.
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.
Real-world examples of using warehouse technologies
Giant companies with multimillion budgets need to have as much flexibility as small organizations. Implementing smart warehouse technology is a tool that can give that advantage to a business of any size. Here are some real-world examples of technology used in warehouse automation:
1. Revolutionizing efficiency: The impact of automation in Amazon’s warehouses
One of the impressive examples of a successful practical application of technology in warehousing is Amazon. The company operates fulfillment centers around the globe, with multiple distribution centers, logistics infrastructure, etc. The fulfillment centers of Amazon process millions of orders daily. Hence, the company had to make sure that global challenges won’t hit the operations.
Amazon leveraged its warehouse technology, in particular, AWS Cloud and IoT, and managed to optimize routine tasks. Besides, they introduced a robotic picking system, and machine learning algorithms improved data management and got hold of real-time insights into their operations. All in all, the warehouse automation with AWS Cloud allowed them to achieve the following:
- Increased efficiency: Automation has allowed Amazon to process orders faster. Robots covered up to 30% of warehouse tasks, such as retrieving items from storage, packing boxes, and moving packages to shipping areas.
- Reduced errors: Data analytics and reporting have allowed Amazon to reduce its error rate from 1 in 3,000 orders to 1 in 20 million orders.
- Faster fulfillment: Amazon’s use of automated warehousing systems has resulted in faster order fulfillment. According to a report by IDC, Amazon’s order fulfillment time has decreased from 30 minutes to 15 minutes.
- Reduced labor costs: Automation has allowed Amazon to reduce its labor costs as it can handle many tasks without the need for human intervention. Barclays reported that automation has allowed Amazon to save over $22,000 per robot per year in labor costs.
- Increased productivity: Amazon’s use of automation has resulted in increased productivity. As Accenture states, automation has allowed Amazon to increase its productivity by 25%.
Moreover, the automated system acquired by Amazon ensures their resilience and enables them to react quickly to new challenges. There will be no need to invent a new business model whenever the next crisis comes. Their system is flexible, adjustable, and easily managed regardless of geographical location.
2. Streamlining for success: How Walmart transformed its warehouse operations with digital transformation
Walmart owns 210 distribution centers and 2700 stores. Management of such an enterprise would not be cost-effective unless automatization were in place. Among the technologies Walmart implemented are:
- Automated material handling systems were installed to move goods out and around the facility. It led to reduced time of processing order fulfillment and minimized manual labor.
- RFID technology to track the inventory and prevent overstocking, and waste, and improve the accuracy of inventory management.
- Pick-to-light systems helped workers conduct order picking faster and more accurately. With the LED indicators of the location of the good, the person does not need paperwork and lists. As a result, a warehouse worker does less walking and minimizes the time spent on finding the goods in the facility.
Automating routine tasks that come from a warehouse workflow helped Walmart improve its business performance. The surging need for online shopping creates a competitive environment for companies that conduct deliveries. Customers have high expectations and same-day deliveries are not an element of a wow service but a must. Hence, automation is a tool used by Walmart to keep up with the expectations their customers have.
Benefits of warehouse automation implementation
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, when it comes to custom IoT development services for warehouse automation, 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.