The Automated Warehouse is Here to Stay

The world’s warehouses will look radically different five or ten years from now

From storing grains in granaries as far back as 9500 BCE to storing Amazon items for one-day delivery, warehouses have indeed come a long way.

Today’s warehouse needs are driven by the need for on-demand fulfillment, business continuity, and cost effectiveness, especially in terms of labor and process optimization, driven by the ecommerce sector.

This means that warehouses today need to be efficient as ever in responding to an accelerated supply chain that is racing to meet demand, especially at the enterprise level. The global B2B ecommerce market, over which Asia has a dominant 80% stake, is worth six times that of its B2C equivalent.

As the demands from warehouses evolve, so do core emerging technologies that can help warehouse operators meet those demands. Warehouse tech startups raised $381 million in Q1 2020, 57% more than what they attracted in Q1 2019. Here are four such technologies that can possibly transform the way the world uses warehouses.

Picking Technologies

Picking refers to a process by which workers navigate rows of inventory to pick specific items for order fulfillment. This essential operation contributes anywhere between half and 63% of warehouse operating costs, in addition to impacting profitability due to erroneous picks.

Further, walking and manual picking alone can swallow up to 50% of the time spent in the picking process. Fortunately, innovations such as pick-to-light and voice-directed warehousing (VDW) have come to the rescue.

Pick-to-light refers to a simple mechanism that organizations can modify for their needs, whereby LED lights on storage units indicate the item that needs picking, and its location.

VDW, also called pick-by-voice or voice picking, is the use of voice software to guide warehouse workers in order picking. Workers, equipped with a headset, are directed by voice software to the item to be picked in a hands- and eyes- free process.

These picking technologies have significant merits. Pick-to-light systems can result in up to 50% increases in productivity with an error rate of less than 0.1%. VDW, on the other hand, can provide productivity improvements of 30% above that of pick-to-light systems.

Moreover, while robots can automate the picking process entirely, pick-to-light and VDW are friendlier on the pocket and take comparatively less time to integrate into warehouse operations.

Warehouse-as-a-Service (WaaS)

Today, the Software-as-a-Service model (SaaS) has permeated business by allowing the servitization of almost anything, including warehouses.

WaaS is an upgraded version of the earlier practice of renting out warehouse space and services. Advances in digitization, Internet of Things technology, and network tech (such as 5G) combined with the spread of the SaaS model, are helping third-party logistics providers extend on-demand warehousing more efficiently and in flexible subscription packages.

The benefits of agility, flexibility, and preferred locations augment the ability for vendors to meet the high expectations of order fulfillment today. This is especially useful for startups and small and medium enterprises (SMEs) that can free up capital from what would otherwise be a fixed asset.

It’s probably not the kind of big disruption that warehouse operators are expecting from emerging deep tech trends. However, WaaS does make warehousing much more accessible and cost-flexible for companies.

Automated Warehouses

Ecommerce and online shopping have not killed brick-and-mortar stores in the way that they were expected to. In fact, many brands not only have thriving offline stores, but even digital native brands are now opening concept stores to reap the rewards of a different demographic of shoppers.

Subsequently, one of the pain points of ecommerce is that vendors need to equip their warehouses for omnichannel fulfillment, with orders streaming in from offline stores, websites, and third-party retailers.

Rather than using a specific technology to address this, warehouses need technology integrations that can lend them the agility they need.

These can come in the forms of cloud computing or machine learning applications, to warehouse management systems, to big data analytics capabilities to help managers make quicker decisions, to automating inventory management to reduce errors.

In fact, even basic conveyor belt technology can help companies increase their pick rate (the rate at which items to be fulfilled are picked) from 60 to 300.

Robotics is another fascinating application of automation. A reasonable present-day application is cobotics, or the employment of both machines and humans in the workforce, such as at Alibaba’s smart warehouse, where battery-powered robots shoulder 70% of the work.

This not only provides cost benefits in the long term, but also helps free up human labor for more intelligent tasks, thereby optimizing productivity.

Blockchain

This revolutionary technology is taking its time to catch up. But even as cryptocurrency aficionados, such as Bitcoin supporters, ardently vocalize their support for the decentralizing tech, the possibility of applying it in warehouses has become apparent.

Blockchain works on the basis of blocks of data that are linked together. These virtual blocks, once formed, are extremely difficult to tamper with, providing a heightened degree of security and transparency in the movement of data.

In the warehouse, this can be particularly useful to track anything from the temperature of items in storage, to contractual obligations between warehouse owners and their enterprise clients.

Even in a general sense, however, blockchain is an extremely young technology. In the wider supply chain, it has seen an adoption rate of only 10% so far, but this figure is expected to reach 62% by 2025.

The thing about technology is that it always offers something new and exciting to look forward to, even for tedious processes such as inventory management. This list is not exhaustive; warehousing businesses can anticipate developments in predictive analysis, wearable technologies, or even 3D printing.

This indicates the dynamic nature of the technology era, and the evolving nature of its impact on long-standing business processes. What it tells us for sure, however, is emerging technologies, and novel applications of existing technologies, are giving warehouses a permanent upgrade.

Header image by WinSon 5293 from Pexels

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Sharon Lewis
Sharon is a Staff Writer at Jumpstart

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