When it comes to production and delivery of goods, “made to order” products and priority shipping are no longer exceptions to the rule—they’re becoming the norm. That puts greater demand on warehousing operations, whether you’re a third-party logistics (3PL) provider or managing your own inventory, parts, and finished goods. To keep up with those demands, smart warehouses (also known as “IoT warehouses”) are gradually overtaking manual ones.
For some warehouses, that means automating back-end decisions and tasks. For example, the question of where to place an incoming pallet is made by a computer rather than a person. The computer makes the decision based on an algorithm, taking into consideration anything from how soon the material will be needed to how much of it will be needed. Once a decision is made (i.e., “put it close to the loading dock”), the computer might also provide directions on the fastest way to get there.
Other warehouses, including many of Amazon’s warehouses, have turned over the bulk of manual work from employees to robots. While most warehouses aren’t even close to that point, many are likely feeling some financial pressure to make progress. There are several good reasons to employ the IoT in warehousing; take a look at some of them below.
The more you can automate manual tasks, the fewer employees you’ll need doing those jobs. And with labor costs on the rise, reducing that number alone can be valuable. But an even bigger benefit to smart warehousing is adding more value to the work your employees are currently doing. If things are moving more efficiently, people are able to do more work in the time they have. And with more of the manual tasks being automated, your employees will also able to shift their focus to more high-value tasks, optimizing your current workforce.
Warehouses that utilize the IoT in warehouse management can respond quickly to orders, giving them a competitive advantage over companies with manual warehouses. For example, if you can efficiently automate tasks to ensure you give the most critical customer demands priority instead of using a traditional first in/first out system, you can improve the customer experience significantly. Warehousing could then become a value-add to the organization’s overall offering.
The more your customer (or you) knows about warehouse inventory levels, handling procedures, temperature conditions, and more, the better and more valuable that warehouse is. But your employees can’t be everywhere all the time. Smart warehouse systems can overcome that challenge, with technology providing full, 24-hour visibility into operations, inventory, and warehouse conditions. That not only keeps you and your customers well-informed, but it also gives you more time to act when problems arise.
The more your operations are automated the easier it is to expand operations to accommodate growth. Making adjustments to your technology is relatively quick compared to modifying your human capital, and less costly as well—for instance, you wouldn’t need to hire additional employees to meet an increase in operational requirements. Hand-in-hand with that is benefit #5.
The more forward-thinking warehouses are in terms of technology and space utilization the faster they can adapt to demand shifts and process changes. Customers will increasingly be less willing to work with warehouses that are entrenched in their ways. Having a smart warehouse demonstrates your ability—and willingness—to adjust operations in response to changing demands.