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  • Smart warehousing: A reality check for the big vision of the Internet of Things

    By Jamies Watts, Head of Sales, Mysoft

    Following last week’s Total Supply Chain Summit, I have reflected on some of the conversations I had with people and a key topic that came up was Smart Warehousing and where SME’s are on their journey to optimizing towards this. I have done some further  reading and wanted to share my thoughts with you…

    At the turn of a new decade, we are on the brink of exceptional growth in the Internet of Things (IoT). The number of IoT devices is forecast to grow to almost 31 billion worldwide in 2020 , and onwards to 75 billion by 2025, making IoT truly one of the trends of the decade. 

    As 5G also becomes the norm, those devices will be connected across continents rather than just warehouses, and the logistics business is therefore ideally placed to benefit.

    The need to refactor logistics for social distancing in the post-coronavirus (COVID-19) world makes the business case for smart warehousing more compelling. 

    The RFID Journal reports: “At a time when social distancing is sweeping the world and changing the face of retail, the companies that survive will be those that take the leap into digitising their supply chain processes with IoT and RFID.”

    But those headline statistics are only meaningful if we put the datapoints created by IoT devices to work. Enterprise resource planning (ERP) is certainly part of the solution – it  connects disparate systems to allow management to identify trends and patterns and so make better commercial decisions. 

    This is already going to be challenging. Analyst IDC estimates that IoT devices will create a whopping 40,000 exabytes of data by 2020 (that’s 40,000 billion gigabytes) and sifting value from the chaff of this data pool demands rigour and data visualisation skills which are currently both cutting edge and expensive to recruit.

    Real world processes are resistant to automation

    However, that’s still only the start. IoT is a rapidly expanding set of tools and standards to create information flows; it’s not a business solution in its own right. 

    The smart warehouse, in which human effort is slowly transplanted by automations, requires a blend of hardware and software. Yes, that will be underpinned by IoT, but a range of systems must work in harmony.

    Take, for example, one of the most basic functions that is naggingly resistant to automation: picking. The value of automation is clear. In the words of consultant Digiteum: “Tasks like picking and packing are monotonous and tiresome — thus, the odds of human error are higher than in more demanding tasks. IoT and smart warehouse technologies help automate repetitive assignments and allocate the workforce more efficiently. By introducing IoT to the warehouse, store managers will be able to reduce order inaccuracies and inventory damage.” 

    But automated picking requires:

    • Standards for packaging – which generally has an associated size/handling cost
    • In-house and external coding/asset-tagging and code display (barcodes, etc) requirements
    • Best-in-class robotics, either capable of identifying and gently lifting a product, or at the least capable of picking units from a pre-defined pallet location
    • Management software to run the show and exception handling for when things go wrong

    And picking is only one component of the workflow in which digital is expected to interface with the human world in the logistics environment. An end-to-end system will include guided vehicles and/or transit sorting, inventory control, and the ubiquitous Warehouse Management System.

    Reviewing the business case

    The smart warehouse business case therefore needs a two-pronged approach:

    • holistic view to appreciate all the possible benefits of a data-empowered warehouse:
      • Customer service with better communication and transparency, leading to loyalty
      • More efficient logistics from real-time understanding
      • Problem-solving, whether order-based (mistakes with individual items) or line-based (predictive maintenance and hot-swapping of facilities)
      • Productivity, whereby employees can be focused on higher-value activities
    • But a tactical, stepped approach so the pain of overhaul can be softened by quick wins and low-hanging opportunities.

    Warehousing is going digital. That’s non-negotiable. 

    In the smart warehouse, accelerated by the need for social distancing, there will also be fewer people on the shop floor. That’s also a business necessity. 

    But what the shape of digital enablement will look like in each instance will never be set in stone. 

    Further emerging trends (such as drones and autonomous vehicles) have yet to make their mark. Today’s state of flux is the new normal, and perhaps the most open-minded approach is to realise that data is an asset in its own right. 

    It’s up to us to put it to relevant and meaningful use, knowing the solution will likely be different for each business.

    If this is something that you would like to discuss is more detail and how Sage and Mysoft can help your business, specifically around smart warehousing and ERP. Contact me on jamie.watts@mysoftx3.com 07826 527 821

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