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Smart Warehouses: Transforming the Global Supply Chain

Smart Warehouses: Transforming the Global Supply Chain

Meeting ever-transforming consumer expectations, streamlining goods delivery and achieving supply chain transparency have become major focus areas in supply chain management. In the era of fast delivery, warehousing mechanisms are becoming critical to customer experience. With changing times and technological innovations, warehousing is becoming much more than just storing goods. Now, it encompasses inbound functions for storing products and outbound errands of shipping and packing.

52% of warehouse executives plan to push investments in technology advancements in the coming years and major expenditures will be diverted towards the migration to smart warehouse management systems, real- time inventory tracking solutions, barcode scanners and internet of things (IoT) which will include devices such as wearables, drones and robotic packaging equipment.

Welcoming Warehouse 4.0

Over the last decade, the number of warehouse facilities that make use of warehouse management systems (WMS) has grown from approximately 30% to almost 70%. The IoT, a network of devices that converse with one another, collects data using sensors and passes it to cloud and on-premise servers for further analysis. This is widely viewed as the foundation of the Warehouse 4.0 concept.

Warehouse 4.0 is all about the amalgamation of digital and physical systems, which is paving the way for enhanced connected experiences that in turn will impact everything from product design and planning to supply chain and production. To reduce the training hours of new employees, warehouses are migrating to voice- and screen-directed inventory picking and replenishment. Businesses are utilizing multi-modal picking, which is a combination of picking and screen-directed picking through mobile devices.

Another trend under smart warehousing that multiple companies are adopting is task interleaving. It uses employees’ location and data related to the usage of devices to save time so that more tasks can be performed within a given time frame. Cross-docking is also seen to minimize the manual handling of material so it can be expected to have high adoption rates in the future.

Automating Warehousing: The Next Step?

Currently, 30% of warehouses are using voice and light- directed software systems, which navigate operators across storage locations and augment the picking process. But this technology lacks application integration, which is a major barrier to effective warehouse management and cost optimization. Despite this, the companies with fully integrated supply chains that are using these software solutions have witnessed a 20% performance improvement.

A perfect example to highlight the proficiency of smart warehouses is Amazon. It employs 10,000 robots across the world to move and group-stock specific orders. It is also experimenting with delivery drones and has two patents for connected wristbands to capture the position of a worker’s hand to incorporate a haptic feedback system that monitors the location of inventory bins.

The Internet of Things and the Future

IoT implementations in warehousing include DHL’s smart warehouse system. It was created in partnership with Cisco Systems and Conduce. It was based on Cisco’s Wi-Fi infrastructure and Conduce’s data visualization platform, which enables DHL managers to view the collected data from the WMS, scanners and material handling equipment in real time, and match it against order records to upsurge operational efficiency and workplace safety.

Smart warehouses have implementation barriers too. Companies in developing countries still rely on spreadsheets or standalone software solutions and since IoT forms a large part of smart warehouses, it comes with a heavy implementation cost which is difficult for small companies to bear. The development of apps for smart warehouses also requires integration with third- party services and devices. Both retail and logistics companies currently are struggling to create an IoT perspective and well-connected warehouse experiences to create seamless supply chains even for the smallest of orders.

What’s Your Plan for Procurement and Supply Chain?

As 2020 turns into the year of disruption, GEP’s unparalleled software and strategy solutions  featuring end-to-end digital transformation  ensure your procurement and supply chain organization stays resilient and effective. Find out how GEP can help  talk to us today.

Barnali Mukherjee

Senior Director, Supply Chain

Barnali has over 20 years of experience in consulting, product management and leading teams in the development of market driven software solutions.

At GEP, Barnali is responsible for ensuring customer needs are met in an impactful way with our supply chain and procurement technology using the latest advances in next generation technology and new user experience.

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