Smart warehouses and the ‘Amazon Effect’

Industries: Logistics

More and more often, companies are starting to see how applying the Internet of Things to their supply chain operations can be the smartest move yet, revolutionising many stages of the chain; from suppliers through to the end user. One of these supply chain links that will greatly benefit from the integration with the Internet of Things is warehouse operations, resulting in improved productivity and many other improvements. As customers expect more and more speedy delivery of their products, the quest for the ‘Amazon Effect’ has all links in the supply chain on their toes.

With the dawn of the Internet of Things, everything is gaining intelligence and everything is fitted with sensors. This is no different in manufacturing and materials handling industries. Existing warehouse control systems have not been engineered to optimally function in this new age. In order to optimise performance and increase efficiency, warehouse management and control systems also need to be re-imagined and re-conceptualised to integrate with the Internet of Things by incorporating sensors, intelligence and connectivity. There is no doubt that the Internet of Things will take the efficiency of your warehouse to a new level; it is a game changer that will transform your supply chain in many ways.

Blackboard with drawings and Internet of Things text

Intelligent picking, moving and shipping – the connected warehouse

Warehouses were traditionally operated either manually, or in a semi-automated way. Manual warehousing saw workers walking around with lists, looking for products, loading them onto carts or forklifts and then delivering the products to the shipping dock. Warehousing has come a long way since then; management systems are becoming increasingly intelligent and warehousing steps automated. In the warehouse of the future, customer orders are received electronically after which the system confirms whether the item is in stock. Picking lists are then sent to ‘robot-carts’ which place the items in containers to deliver them to workers after which the items are loaded onto a truck. The system also checks the various transportation options and schedules the delivery. A network of sensors detects every movement in the warehouse such as the location of the robot-carts and whether the items are on their way to the shipping dock. All the data gathered from the sensors is sent to a monitoring team that keeps an eye on the operations on a 24-hour basis.

See also: Factory of the future – coming at us like a cyclone

No sensors → no Internet of Things → no Amazon Effect

The Internet of Things can’t operate without sensors and the connected warehouse is one of the best places to illustrate all the practical applications of this technology. It is clear that the supply chain will be revolutionised by the Internet of Things and this will happen through connecting manufacturers, suppliers and distributors, retail and end-users and the same principles have already proven fruitful in warehouse operations. To illustrate the importance of getting your warehouse connected to the Internet of Things and on par with the Amazon effect, here’s a few compelling reasons:

Manual collection of data can spell disaster – the elimination of human error

Accurately locating, tracking and measuring the movement of inventory, gaining user insight and limiting situations where you run out of stock are just some of the things that can be achieved by embedding sensors and connecting with the Internet of Things. Many warehouse managers or operators find themselves wasting precious time trying to locate misplaced stock or lost pallets due to data entry mistakes. These issues are a thing of the past in connected warehouses as each and every pallet is monitored. With the help of sensors and the Internet of Things, human error can be virtually eliminated, leading to complete inventory accuracy – impacting your bottom line.

Real-time visibility and endless capturing and transmission of data

If you don’t have real-time visibility of your warehouse, how can you keep track of what goes on? You won’t be able to determine if your forklift drivers take the best routes or how your pallets move throughout your warehouse. Your best guess won’t be good enough when it comes to actual information and optimising performance. Real-time visibility of movements, whether it’s your forklifts, pallets or workers, can only be achieved with sensors constantly gathering and sending data from your warehouse floor. The more information you have about what’s going on in your warehouse, the better equipped you are to optimise your operations and make improvements. Drivers make up a large part of your operational costs so productivity improvement is a key factor when it comes to your bottom line.

Safety and security – from dumb to smart

The forklift is a very clear example of how sensors can facilitate the evolution from a ‘dumb’ piece of equipment to a smart, sensor-enabled vehicle which has all the tools it needs to operate efficiently and transmit data in case of an accident. Your entire fleet’s performance can be closely tracked with the help of a sensor-based, connected system. Not only will this improve efficiency, it will also decrease the number of accidents in the warehouse and reduce worker injuries, equipment damage and downtime – again, all impacting your bottom line.

Where is my pallet? In-transit visibility

Another key area that plays an important role in the supply chain is in-transit visibility. The ecosystem that is logistics has many moving parts; products are transferred between many points – manufacturers, suppliers, distribution warehouses, retailers and end-users. Getting a grip on the whereabouts of your products can be done by installing an RFID chip in your pallets which can transmit data into the cloud, and provide location, identity and other information, using GPS and technologies such as Radio Frequency Identification

End result – a smarter warehouse and an intelligent supply chain

Embracing the Internet of Things enables you to run a super efficient warehouse, resulting in inventory optimisation, accuracy and a decrease in asset losses. With enhanced Internet of Things connectivity, the impact of intelligence will be felt in every area of your business and throughout the chain – enabling you to focus on the important tasks, resulting in significant time and cost savings.

Video credits: IBM BA&S Europe

The Internet of Things creates deeper intelligence and richer data for all stages in the supply chain – from manufacturing to the end user. By enabling devices to communicate with each other, your organisation can enjoy a transparent, responsive and highly intelligent supply chain that keeps on improving itself – and your bottom line.

Industries: Logistics
We’re in the midst of a technological revolution and the trends, technologies, and innovations to look out for are all game-changers. They bring competitive advantages, increase the effectiveness of operations, make our daily lives more efficient, improve healthcare, and significantly change the landscape and beyond.

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