How smart tech can transform warehousing

The use of smart technologies in a warehouse can bring about several operational benefits to businesses by Dr. Shereen Nassar, Global director of Logistics Studies and the Director of the M.Sc. Logistics and Supply Chain Management programmes at Heriot-Watt University Dubai
 Dr. Shereen Nassar, Global director of Logistics Studies and the Director of the M.Sc. Logistics and Supply Chain Management programmes at Heriot-Watt University Dubai.
Dr. Shereen Nassar, Global director of Logistics Studies and the Director of the M.Sc. Logistics and Supply Chain Management programmes at Heriot-Watt University Dubai.


A quick look into the history of warehouse management tells us that it was once a very paper-intensive process, heavily reliant on human beings to co-ordinate the multitude of activities that take place within the warehouse. However, ever-rising customer expectations, e-tailing/omni-channel and the pressure of quicker delivery times, increasing operational complexity along with the unprecedented advancement in smart technologies call for smart warehousing management systems, empowered by the Internet of Things or IoT. According to a warehousing study undertaken by Zebra Technologies, IoT devices are considered one of the most advanced tech investment priorities in warehousing. Along with Smart technologies such as robots, smart glasses, artificial intelligence, machine learning, cloud technology, augmented and virtual reality, drones and autonomous vehicles, IoT has transformed traditional warehousing systems into smart ones. In fact, a study by Zion Market Research states that the rapidly growing global warehouse automation market was valued at approximately $45.70 billion in 2017, and is expected to reach approximately $101.66 Billion by 2024, at a CAGR of around 12.1 per cent.

Smart tech brings with it a host of benefits for businesses, and Dr. Shereen Nassar, Global Director of Logistics Studies and the Director of the M.Sc. Logistics and Supply Chain Management programmes at Heriot-Watt University Dubai provides an overview of how it can transform warehousing as we know it.

Cost effective
Despite the fact that warehouses are crucial to business operations, they represent approximately 20 per cent of total logistics costs. Automation can help reduce these costs and improve efficiency. While there may be a large initial investment that is required, the use of smart technologies can prove cost-effective in the long run. For example, the use of warehouse management system (WMS) to replace paperwork can help reduce labour costs while boosting productivity, as well as offer critical insight into operations which can then be used to make quantifiable improvements. Similarly, the use of smart technologies such as sensors technology and Radio Frequency Identification (RFID) along with IoT allow networked devices to use information to optimise tasks – for example, lighting management that can diminish energy costs. In addition, the use of sensors and RFID technologies allow real time visibility of the location and progress of inventory that ensures streamline operations and enhance accuracy and efficiency.

Improvements in productivity
Smart tech can boost productivity in a warehouse in several ways. It can mean that goods are moved much faster, more accurately and cover larger spaces as compared to manual labour. Artificial intelligence solutions enhance pick efficiency and accuracy. Smart tech such as robotic automation helps businesses achieve greater productivity, as robots can work continuously without needing to take a break unlike human workers. We are already seeing a shift in this direction – in fact, a recent report by market intelligence firm Interact Analysis states that more than 580,000 fulfilment robots will be deployed in warehouses by 2023. Similarly, accurate order fulfilment is one of the most crucial steps towards establishing customer loyalty and growing a business. Smart technologies used for picking, transport and delivery ensure higher levels of accuracy and drive productivity. Two drones, for example, can do the work of 100 humans over the same time period, according to supply chain specialists. Another smart technology – smart glasses or vision picking – can boost order picking productivity by 15 per cent on an average. For example, smart glasses allow warehouse labor to see visual displays of the instructions of order picking along with item location information on visual displays on the smart glasses.  Finally, smart tech enables better inventory accuracy, something that has a direct impact on productivity and permits businesses to focus on other more critical aspects of the business.

Improving space utilisation
Warehouses cost money to operate. The costs of land, building, equipment, labor and storage can be high. Therefore, in the warehousing business, big does not always mean better. The use of smart tech can help businesses make the most of smaller spaces, which keeps inventory visible and easy to find. By deploying the right technologies for space utilisation, businesses may even find they do not need as large a warehouse as they had been using. Research suggests that smart tech can ensure warehouses use up about 40 per cent less floor space than traditional warehouses.

Create a safe working environment
Apart from productivity benefits, smart tech can also keep warehouse workers safe. Some examples are as follows: RFID tags and sensors are capable of issuing proximity warnings if a worker strays close to unsafe areas such as the path of a forklift, robots can perform tasks deemed dangerous for humans including those which can cause repetitive strain injuries and drones can be used to complete tasks which require workers to scale ladders, increasing their chances of a fall. Reports indicate that nearly 1.8 million warehouse workers every year suffer from ergonomic injuries caused by improper lifting practices and smart tech can significantly reduce this.

Environmentally friendly
Apart from the above obvious benefits, smart tech can also bring about several environmental benefits with regard to land use, energy consumption and waste production, including hazardous waste. It can enable smart storage, which means smaller physical footprint, thereby requiring less in the way of land. It can also bring about energy savings – for example, intelligent WMS platforms which optimise workflows to reduce energy use. And finally, the use of smart tech can bring about waste reduction, a common sustainability goal for automated warehouses. Some ways by which this happens are as follows: lesser usage of plastic shrink wrap for automated pallets as opposed those handled manually and reduction in picking errors which means less returns, less wasted energy use, transportation, associated emissions, and fossil fuel consumption.

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