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Warehouse Digitalization: The Future of Warehousing

Warehouse Digitalization: The Future of Warehousing
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With the advent of always-on e-commerce, the demand for faster responses, and the need to manage a larger number of SKUs with fewer errors, warehouses need to scale up and meet the standards of an intelligent, efficient, and automated warehouse. Looking ahead to the next 2 to 10 years, a predicted surge in the preference for digital transformation will bring fundamental changes to the way warehouses operate. Accordingly, the adoption of disruptive warehouse digitalization will reach its apex. 

According to a survey presented by the MHI Annual Industry Report, as many as 80% of respondents believe that digitalization has the power to disrupt the industry. For 16%, it is already creating either disruption or competitive advantage.

There are 7 aspects of the digital warehouse, in particular, that look towards the future. These very aspects are now on their way to making warehouse digitalization a reality. 

Here is how promising the future of warehousing may be. Six years from now, this is what the adoption rates of the 7 aspects of warehouse technology will look like:

 

Warehouse Digitalization - Adoption Rate

 

1. Real-Time Data Gathering and Increased Interconnectivity

The warehouse and supply chain systems of the future will be anything but opaque. Blockchain has the potential to play a pivotal role in achieving transparency at every level. This technology offers the power to distribute information fast and securely, thus making real-time data exchange for warehouses efficient and transparent.

Blockchain is incomplete without a key technology: the Internet of Things (IoT). IoT is an ecosystem of sensory devices (e.g. for location, humidity, temperature) that are interconnected across digital networks. These can collect and transmit data in real time without human intervention. To understand how to deploy IoT successfully, you can read this article.


“The DHL Logistics Trend Radar 2016 predicts that by the year 2020, more than 50 billion objects will be connected to the Internet.”

 

Warehouse digitalization with Internet of Things

Image Source: Internet of Things in Logistics by DHL & Cisco

Together, these technologies are bringing real-time visibility and seamless collaboration among processes and chain partners, resulting in highly evolved, efficient, and effective operating models.

 

2. Warehouse Mobility Solutions

The transition from fixed desktop workstations to smartphones and mobile devices is a major step forward in gaining warehouse efficiency. Today, devices and apps substantially reduce walking time and allow warehouse employees to work and access data on the go within as well as outside of the warehouse.

Smartphones are not only liberating warehouse clerks from deskbound activities but also adding new dimensions of capability to standard workstations. Today’s warehouse mobile solutions can deliver excellent operational efficiency and computational power that warehouse operators need.

 

Warehouse-Mobility-Solutions - Warehouse Digitalization

 

The advantages of functions such as imaging (pictures & video), tracking, cloud integration, video-conferencing, voice/face recognition, and even personal assistants open new frontiers for transformations that these technologies can bring to warehousing operations.

The more we look towards the future, the more that mobility proves to be of the essence. Warehouse mobility is one of the most secure areas to invest in so long as it is well planned and strategically aligned with operational needs.

 

3. Autonomous Guided Vehicles

Although not yet widely adopted, AGVs (Autonomous Guided Vehicles), as potential substitutes for the forklift, promise to revolutionize the way cargo is transported inside and outside the warehouse.

Giants such as Amazon are making the most of this technology and substantially reducing costs, time, and human effort by adding 15000 Kiva robots every year

 

Amazon Robotics - the perfect example of warehouse digitalization

Kiva Robots transporting inventory in an Amazon warehouse.

Image Source: Robotics Business Review

 

Drones are set to disrupt the warehousing industry, too. They are safe and economical when it comes down to locating cargo, conducting inventory, cycle counting, and performing stock-taking operations.

A drone equipped with sensors, cameras, barcode scanners, or RFID technology can reach even the innermost spaces within a warehouse. These can complete checks and manage inventory in less than one third of the time needed to do it manually.

 

warehouse digitalization via UGVs

Image Source: Fuse Crunch

 

AGVs are also capable of moving goods in the warehouse, speeding up the picking process, and contributing to inventory management operations. The good news is that if you are looking for warehouse management for small businesses, AGVs can be as handy for those as they can be for large enterprises. This is one reason why AGVs are certainly a part of the future. 

 

According to Gartner, more than 110,000 drones/UAVs were sold in 2016 for commercial use in the U.S.

 

4. Smart Analytics and Machine Learning

Warehouses are expected to play a key role in increasing customer satisfaction, effectively predicting product demand, and making better use of the resources at hand. As a result, the demand for forecasting and accurate decision making is on the rise.

An increasing number of warehouse managers are now keen to interpret data trends to not only anticipate stocks but also to optimize warehouse capacity and asset utilization.

This is where predictive analytics come in. Predictive analytics make use of statistical techniques such as predictive modeling, big data, and data mining to analyze historical trends and make predictions about the future.

Predictive analytics, together with artificial intelligence (AI), can be very effective for recommending optimized inventory levels, replenishing inventory, and increasing operational efficiency as well as warehouse optimization as a whole. 


The global market for predictive analytics is expected to reach US$3.6 billion by the year 2020.

 

This is proof enough that not only warehousing but also all sorts of industries find smart analytics and machine learning worth investing in.

 

5. The People-Technology Connection

One of the striking features of a digitized modern warehouse is the interconnection between people and warehouse technology. This is enabled by wearables. Such technology provides warehouse clerks and managers access to a wide spectrum of information in real time, irrespective of their location, environment, and physical constraints.

Wearables are small computers that can be strapped to the wrist, head, or any part of the body. Devices such as smart glasses, augmented reality, and voice-enabled devices are becoming more popular by the day as means of achieving effective interaction with systems.

 

Warehouse Smart Glasses.jpg

Image Source

 

The result will be better flow of information, greater visibility, decrease in error rates, superior safety, and increased service levels at lower operating costs.

Wearables can help optimize efficiency in processes such as order picking, receiving, handling, high-value asset handling, cycle counting, safety, and workforce training, to name only a few.

 

6. Automation and Robotics

Warehouse automation is a present reality and one that is certainly a part of the future digital transformation. Automation and robotics can simplify performance of manual tasks, with much less time and cost (cumulative) and increased efficiency.

 

Automation for warehouse digitalization

 

Robotics are expected to become more human-like in the aspects of memory, sensing, skill, and affinity for learning without being programmed for particular skills (AI). 

A survey conducted in 2015 by Zebra to study advancement in warehousing in the next 5 years concluded that as many as 70% of respondents were looking to automate their warehouses/warehouse processes.

Automation is one indispensable aspect without which warehouses are unlikely to survive in the future.

 

7. Real-Time Inventory Management

The highly successful state of commerce is exerting heavy pressure on warehouse managers for more efficient inventory management. They need more visibility and control over inventory. Automatic identification systems such as smart sensors, RFID (Radio Frequency Identification), GPS, etc., not only provide end-to-end visibility of inventory but also operational intelligence through the data that these sensors collect in the process.

This helps in optimizing inventory management as well as in making the warehouse safer while increasing visibility.

As many as 75% of the respondents of the MHI report are likely to adopt these systems in less than two years from now. With the increasing number of smaller orders and the omnichannel trade, real-time inventory management systems will become a staple of the future warehouse.

 

For a visual explanation of the warehouse technologies above, watch this video:

 

 

 

 

Warehouse digitalization is a reality that the warehousing industry must come to terms with in order to sustain and thrive amongst increasing competition and market pressures. The smart warehouse, which appears only as a disruptive force as of now, is likely to become the norm within the next ten years. 

 

If you want to learn more about warehouse digitalization and optimizing warehouse processes, you can follow us on LinkedIn, YouTube, Twitter or Facebook. If you have other inquiries or suggestions, don’t hesitate to contact us here. We’ll be happy to hear from you.

 

 

Hector

Hector has 15 years of experience leading IT operations for large and small businesses. He holds an MBA in Management and Bachelor's degree in Information Technology. Hector has a passion for books and creating opportunities for others to grow.

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