smart warehouse

A smart warehouse is a large building in which raw materials and manufactured goods are stored that uses machines and computers to complete common warehouse operations previously performed by humans. These operations include identifying and receiving orders, counting products, storing products and remembering where they are later and sending orders to the correct place. The most successful smart warehouses automate nearly the entire operation and journey of goods from supplier to customer, with negligible errors.

Smart warehouses are inspired by smart factories and adopt a similar data-driven environment. They incorporate various automated and interconnected technologies to create a technological environment in which goods and requests can be received, sorted, organized, recognized and prepped for shipment automatically. This collaboration of technologies allows warehouse workers to increase the productivity, quality and efficiency of their facility while decreasing the number of errors that occur and minimizing the amount of human workers needed.

How does a smart warehouse work?

Smart warehouses rely heavily on robotics, the Internet of Things (IoT) and artificial intelligence (AI) to allow technology to perform tasks -- like managing inventory and locating products around the warehouse -- rather than having the job performed by humans.

Other important components of a smart warehouse include:

The robots used in smart warehouses frequently resemble Roombas, or robotic vacuums, and automate the product retrieval process by physically delivering requested items to the human employees packaging the orders. The IoT is what allows the robots in the smart warehouse system to communicate with all the other necessary technology and complete their tasks.

Artificial intelligence is used primarily to increase productivity and minimize errors. Robots can use AI to find the most efficient way to find and pick products. Other machines can use AI to pack products in the most space-efficient way. AI can also determine the best box type for a specific shipment, using the type, size, weight and product number of the item.

RFID allows warehouses to switch from paper tracking methods to tracking with digital tags. RFID also takes the place of barcode readers. While barcodes had to be precisely aligned with the reader to be registered, RFID scanners can identify packages when simply pointed in the appropriate direction. Furthermore, the collaboration of RFID, wearables and sensors provides warehouse managers with real-time monitoring of the progress and location of all inventory.

Wearables also enable workers to move all over the facility and continuously access information instead of relying on an unmoving workstation. Additionally, the network of sensors in a smart warehouse is responsible for monitoring the entire operation and ensuring that everything progresses appropriately.

Warehouse management systems track a warehouse's everyday operations and reveals the efficiency of the processes as well as areas that can be improved upon. WMS gathers important data and helps warehouse managers control operations and processes. Since most WMS collects real-time data and provides visual reports, it can be used to reveal vulnerabilities or problems in the operation, therefore allowing workers to identify where issues are and fix them.

Orders are automatically received by smart warehouses. At this point, the system checks and confirms that the requested products are available. A list of items to pick up is then sent to one of the system's robots, triggering the retrieval of products and the delivery to workers for packaging. To work efficiently, smart warehouses must be agile, flexible and scalable and provide data visibility.

Benefits of a smart warehouse

The goal of smart warehouse systems is to provide companies with real-time visibility, enabling the optimization of processes and the ability to make instantaneous changes to improve operation speed. Smart warehouses can also remove the majority of human error and increase safety and security within the facility. Overall, the primary benefits of a smart warehouse are its ability to save the company time and money, increase profits and raise the satisfaction level of clients and customers.

Smart warehouses have also become increasingly important and beneficial as the need for inventory management accuracy grows due to the increase in online shopping. It is essential that online retailers provide accurate, real-time information to consumers about the availability of products. The data visibility afforded by smart warehouse systems allows for this while also helping to decrease out-of-stock conditions, improving customer service and increasing customer satisfaction, thus growing customer and Brand loyalty.

The future of the smart warehouse

Smart warehouses signify the switch from slow, unchanging, reactive supply chains to faster, smarter, automated systems, and this change is expected to continue. Outsourcing and China's dominance in manufacturing due to cost-effectiveness will disappear as companies implement smart warehouse systems and are able to more efficiently perform at similar, if not lower, costs.

The distinction between a warehouse and a factory may also disappear as smart systems increasingly allow companies to produce items on demand and immediately send the product to the customer. Cobots, or robots that work with humans, will make this possible as well a growth in 3D printing.

standards are expected to be developed defining how IoT devices communicate as well as store and process data.

This was last updated in August 2019

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