What is a Smart Warehouse?

What is a Smart Warehouse?

The smart warehouse is the future, today.

A smart warehouse is clean, efficient and, at least in part, thinks for itself. It frees your warehouse team from the tedious tasks of moving items around, printing off picking and stock lists, and double checking that items are where they’re meant to be.

The smart warehouse puts computers and robots to work doing what they do best – tracking and managing data, and transporting stock. That leaves your human team to focus on planning and monitoring, and making important decisions that are beyond the scope of the machines.

The result is a clean, efficient and productive environment that serves customers well, is a great place to work and delivers a cost-effective warehouse solution to your business.

Smart warehouses have been developing for decades. They’re now within the reach of every business, whatever its size, thanks to the internet, advances in robotics and the increasing use of artificial intelligence (AI) and machine learning.

What are the benefits of a smart warehouse?

Upgrading to a smart (or smarter) warehouse offers you a host of benefits. These include:

Improved efficiency and productivity

Many warehouse processes involving manual labour are relatively easy to automate. Machines can do the same tasks as people, faster, more consistently, and with less risk of human error.

Automation goes hand-in-hand with streamlining, where workflows such as picking, packing and shipping are made more efficient.

Improved accuracy

Accurate data is vital to the successful operation of a warehouse. Keeping track of stock numbers, stock age and stock location, plus making predictions for deliveries and demand, quickly gets complex in a busy operation.

A smart warehouse uses real-time inventory tracking, along with accurate picking and packing systems. These help to minimise discrepancies between actual and recorded items.

Safety and compliance is improved

The working environment is monitored to reduce the risk of injury to staff, inventory and premises. Digital tools help prevent problems occurring and are also used to track and document compliance with industry regulations.

Sustainability

A smart warehouse uses energy more efficiently, by controlling where and when lighting and heating are required. Automation helps reduce both the carbon footprint of the operation, and the level of waste due to damaged or obsolete stock.

Cost savings

A more motivated workforce with higher productivity, less wastage and a more efficient use of energy should lead to lower operating costs. Or at least, lower costs in relation to the volume of activity being carried out.

What makes a smart warehouse smart?

Digital technology has been used in warehouse operations for decades, ever since inventory data began to be recorded in computers. The transformation to a smart warehouse comes when computers, and other digital systems and devices, are integrated to work together. It’s this integration that unlocks the productivity and efficiency benefits.

There are many components to a smart warehouse. These include:

Warehouse Management Systems

A warehouse management system (WMS), or systems, tracks and controls key functions in the warehouse. It can be one or more different software applications with specific functions. These include:

• Inventory tracking
• Order management
• Labour management

 
Where different applications are used, they can be integrated to share information between them.

Robotics and automation

Essential jobs in the warehouse can be handed over to machines, which work more efficiently and reliably than people. These machines include:

• Robotic picking systems
• Conveyors
• Automated guided vehicles

 
These devices don’t need to take a break as often as people, and are less likely to make mistakes. The tasks they perform are manual and repetitive.

The Internet of Things

Operating a warehouse involves making a lot of small decisions that depend on access to information from other sources. The Internet of Things (IoT) allows devices to share information which helps them make a decision.

Examples of IoT technology in a warehouse include:

• Sensors and RFID tags
• Environmental monitoring and control
• Predictive maintenance

 
These devices receive information from elsewhere and then act on it. It could be as simple as controlling the lighting and temperature in a certain storage area, through to monitoring how a robot is performing to decide whether it needs a maintenance visit.

Artificial intelligence and data analytics

Today’s AI systems are increasingly able to make decisions based on complex data. Areas where these systems are helping businesses include:

• Demand forecasting
• Route optimisation
• Performance analytics

These systems find the optimal solution to the problem, such as choosing the best route around a warehouse or suggesting areas where the operation could be improved.

Mobile technology

Tools that can be worn or carried by staff to help them work more productively, such as:

• Tablets and smartphones
• Headsets
• Mobile apps

 
Up-to-date information can be relayed to the user whatever their location, and they can update the WMS on the spot.

Augmented reality

Creating a digital version of reality, or overlaying a digital layer over reality, makes it easier to:

• Increase the speed and accuracy of picking, by guiding staff along the optimal route
• Train staff by creating realistic settings
• Create new versions of the warehouse, to test alternative designs

 
Augmented and virtual reality literally add a new dimension to warehouse design and operation.

What are the challenges to implementing a smart warehouse?

As you plan to upgrade your warehouse to one that’s smarter than it is today, you also need a plan for some of the bigger hurdles along the way.

High upfront costs

Investment in hardware and applications can be substantial. It’s important to be aware of the return-on-investment, and to consider your choices for financing.

Integration with existing systems

The systems you use now must either be replaced or integrated with the new systems coming in. Both of those options take time and require thorough planning and testing.

Data security and privacy

Cybercrime and hacking are genuine concerns for any business connecting its systems to the internet. You’ll need a robust set of security measures, along with a disaster recovery plan.

Managing change

Introducing new systems and processes is likely to cause some discomfort for your team, who’ve learned to work in a certain way. Be prepared to educate them about the benefits of changing, both for the business and for themselves.

How to implement a smart warehouse successfully

As with all technology projects, setting up a smart warehouse involves coordinating a large number of resources. If this isn’t done well, the project can become a drain on resources and have a negative impact on your relationships with your customers.

In outline, the steps you should take are:

• Be sure to have a team in place with the skills needed to design and deliver the smart warehouse.
• Be clear about what your business needs from the new warehouse system.
• Select the most appropriate tools that are to be used.
• Ensure integration is possible between the various tools and any existing systems you plan to keep.
• Training is essential, partly to get buy-in from your operations team, and in part to ensure maximum productivity.
• Be prepared for continuous improvement.

 
We’ve helped a wide range of organisations with the design and installation of their smart warehouse solutions. If you need help, get in touch to speak with one of our experts.

What is the future of smart warehousing?

Innovation in logistics and warehousing continues to deliver new strategies, processes and tools. Challenges and opportunities on the horizon include:

Management of Big Data

The Internet of Things devices scattered across the warehouse will capture huge quantities of information. Recording, storing and making sense of this data is an IT challenge, with an assessment needed of what must be kept in order to inform future decision-making.

Digital twin technology

A digital twin is a virtual copy of the physical warehouse and its systems. This digital twin tracks the health of the operation, predicting potential issues ahead of time. It can alert the team to these challenges and provide suggested solutions, allowing your staff to act in order to avoid a problem occurring.

More comprehensive integration

In the same way that your warehouse systems talk to one another, they can also communicate with other systems in your wider logistics operation and supply chain. This takes you towards unprecedented levels of efficiency and data-driven decision-making.

Increased use of Blockchain

Blockchain creates a secure, unchangeable and publicly available record of digital transactions. It can make the entire supply chain for products entirely transparent. This has implications for tracking the source of products, identifying the precise location of stock, and resolving claims between businesses.

Learn more about how the smart warehouse can help your business

Talk to an expert in contemporary warehouse design and warehouse management systems. We help a huge variety of organisations implement smart warehouse technology and our team are happy to talk with you. Get in touch today.